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Do You Need to Trademark Your Business Name?

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This post is part of a series called Naming Your Business.
How to Choose the Right Name for Your Business
How to Change Your Business Name Successfully

In part 1 of our three-part series on naming your business, you learned a step-by-step process for choosing the best name for your company.

After all that hard work, it would be a shame to have someone else come along and use the same name. And if you’ve already been in business for a long time, your name is worth even more.

So in this tutorial, you’ll learn how to protect your company’s name with a trademark. We’ll go through all the benefits of getting a trademark, when you need to get one, what kinds of names are eligible, and what the process involves. By the end, you’ll have a clear idea of whether you need to trademark your business name, and how to do it.

Note: In this tutorial, we refer to US rules and regulations. The way that trademarks are administered varies in each country, but the fundamentals of when you need a trademark and what it can do for you also apply in many other countries.

1. The Benefits of Getting a Trademark

If your business is structured as a corporation, limited partnership or LLC, you’ve probably already registered its name with your state government. So why would you need to take the extra step and get a trademark?

Well, a trademark provides you with ownership rights over the name across the US. It’s legally enforceable at the federal level, so that you can take swift action against any other company using the same name in your line of business. It gives you a high level of protection.

State registration, on the other hand, only applies to that one state in which you’re registered. Although it stops another company from registering the exact same name in the same state, it doesn’t give you formal ownership rights, and doesn’t protect you in other jurisdictions.

In the online world, that’s particularly important. These days, even for local businesses, people often go online to find your store location, check opening hours or order from you. If they find a company with the same name, they’ll get confused. In 2005, the actor Morgan Freeman applied for a trademark on his own name to prevent a company from using www.morganfreeman.com to divert internet traffic to other sites.

But even in regular “offline” business, it pays to protect your brand. You poured so much time, energy and money into creating it, advertising it and promoting it. If you’ve been in business a while, you’ve been building up brand recognition not just through formal promotion, but also through your day-to-day interactions with your customers. Your name is your reputation, and it can become very valuable. The “Apple” brand, for example, is estimated to be worth over $100 billion.

A trademark gives you legal ownership over your brand name, and gives you the right to take strong action against companies that try to trade off your hard-earned reputation.

2. When You Need to Get a Trademark

Despite the benefits, it’s not mandatory to get a trademark as soon as you set up shop. In the early days, and especially if you’re just trading locally, you may be comfortable going without a trademark.

As well as the limited protection conferred by state registration, you also get some “common law” protection just by being in business and using the brand name. If you’ve been trading for 20 years as Bazooka Games, for example, and someone else sets up shop nearby with the same name, you do have some legal recourse.

When you see companies using the ™ symbol, that means they’re claiming common law ownership of that particular brand name. Despite what you may think, it doesn’t mean they’ve actually registered a trademark—when they’ve done that, they use the ® symbol. So although registering a trademark gives you much stronger protection, you could simply put ™ after your name and rely on common law protection, especially if your brand is not yet worth a large amount.

And in some cases, the company name itself may simply not be worth trademarking. When you register a trademark, what you’re really doing is protecting a brand. That brand could be the name of your company, or it could be the name of one of your products, or a slogan, or a design element like the Nike “swoosh.” So you need to decide how important your company name is to your branding.

Usually the company name is prominent, but some firms are set up with a behind-the-scenes “holding company” in charge of a multitude of individual brands. In that case, it might not make sense to get a trademark for the anonymous holding company’s name; instead, it’s probably more important to protect the brands and slogans that the public sees.

So think about what your brand consists of, how you’re known in the world, and protect those things. You can take out as many trademarks as you want, so if you want to protect the business name, individual product names, and some of your distinctive slogans and designs, you can do that as well. Most large companies protect their brand name with a trademark, and often with multiple trademarks for different versions of it, so if you’ve got big ambitions for your company, it makes sense to protect it as soon as you can.

3. Eligibility

Even if you want to get a trademark, you might not be able to. Names have to meet certain criteria before the US Patent and Trademark Office will award a trademark.

First, of course, it must be a name that isn’t already being used by another company in your field. You can search for duplication using the methods described in the first tutorial on naming your business in this series.

But that’s not the only hurdle. You also need to show that your name is distinctive enough to be worth a trademark.

That distinctiveness is assessed using the following widely-recognized categories. We’ll start with those that have the best chance of success, and move gradually down to those with the worst chance.

Fanciful

These are made-up names. Think Xerox, Pepsi, Exxon—names that don’t have any meaning in the English language, and were just made up by that particular company. This is the strongest category of trademark, because it’s hard for anyone else to argue that they have a legitimate reason to use the word Xerox. The Xerox Corporation (or the Haloid Company as it was then called) thought of it first, and registered the trademark back in 1950.

Arbitrary

“Fanciful” and “arbitrary” are not generally good qualities in the business world, but when it comes to trademarks, they are. They show that the name is unusual enough to deserve protection.

A common example of an arbitrary name is Apple. It’s a regular English word, but it doesn’t describe anything to do with computers or technology. It’s a completely arbitrary name, made up apparently because Steve Jobs had been on a fruitarian diet and visited an apple farm just before naming it (although other explanations exist).

It’s a strong trademark because there’s no clear association between the name and the company, which makes it more unusual. Some other arbitrary names are among the strongest brands out there. Why name an oil company Shell, or why name a book company Penguin? It’s arbitrary.

Suggestive

Suggestive names tell you something about the company, but in an indirect way. They’re a step down from arbitrary and fanciful names, but can still make good trademarks. Generally they focus on a particular aspect of the company, and require some leap of thought to figure out what the company does.

Think about the 7-Eleven convenience stores we mentioned in the first tutorial, for example. The name describes the opening hours, but doesn’t tell you anything about the type of store it is or what you might find inside.

Other examples of suggestive names are things like Greyhound and Jaguar—they suggest the idea of speed, but don’t directly describe buses or cars.

Descriptive

Now we’re getting to the categories of names that are hard to protect. If your business name simply describes what you do or what products you sell, you’ll struggle to qualify for a trademark.

For example, if Greyhound had decided to call itself “SpeedyBus,” it would have dropped down from the suggestive to the descriptive category. Review more examples of descriptive names, click here.

Descriptive names can become eligible for trademarks if they’ve been in use a long time and have strong brand recognition among consumers. Holiday Inn, for example, is descriptive, but has acquired what’s known as secondary meaning, because the average consumer associates the name with that particular company, not with hotels in general.

Surnames are generally regarded as descriptive too, which means you won’t get a trademark unless you can achieve “secondary meaning” through long use and wide name recognition. Examples of surnames that have acquired secondary meaning include McDonald’s for restaurants and Hyatt for hotels.

Generic

If you’ve chosen a generic name, you won’t get a trademark. The name “Shredded Wheat,” for example, is generic. It applies to the type of breakfast cereal being offered. You can buy it from Post, Kellogg’s, Nestle and other companies. They’re all free to use the name; no single company can claim ownership over it, which prevent others from using it.

If Apple actually sold apples, it would be a generic name. In that example, it just describes the entire category of products being sold, and it would be unfair to stop any other apple seller from using the word “apple.”

4. How to Get a Trademark

So if you’ve decided you need a trademark, and you’re confident you’ve got a name that will be eligible, how do you actually go about registering?

We’re going to describe the “do it yourself” method here, but it’s worth keeping in mind that trademark law can be a complex area, so many companies hire specialist trademark attorneys to handle everything for them and make sure they’re properly covered. If you can afford it, that’s a good option. But if you just want to file online while keeping the costs low, read on.

In the US, you can register a trademark online at www.uspto.gov. The filing costs $325, although there may be some additional fees if, for example, you make a mistake and need to have it corrected. Review a full fee schedule.

Before filing, you should check the trademark database one last time to make sure your chosen name is not already trademarked. You’re likely to be refused even if the name you want is not identical to another, but is close enough to cause confusion.

When you file, you’ll have to specify the particular goods or services for which you’re requesting protection. You’ll need to be careful to cover all your business activities here, so that you’re properly protected. The USPTO site gives details on how to describe your goods and services using its pre-defined classification scheme.

How long does it take to complete the process? The USPTO says it’s “difficult to predict,” but you can expect to receive a filing receipt within three weeks, and an official response within six or seven months. In some cases, though, the response may be a request for more information from you, which will lengthen the process. In all, it can take “anywhere from almost a year to several years” from beginning to end.

5. After You’ve Registered

So now you know the benefits of trademarks, the situations in which you would want to trademark your name, the types of names that are eligible, and the process for getting a trademark.

But after you’ve registered the trademark, keep in mind that you’re the one responsible for enforcing it. The government may grant you a trademark, but it won’t go after someone who’s using your name. It’s up to you to contact any company using your trademark, ask them to stop, and take legal action if necessary.

Sometimes, despite all the effort and money you put into creating and protecting a name, you decide later that it needs to be changed. So in the last tutorial in this series on naming your business, we’re going to look at the ins and outs of changing a business name. 

Resources

Graphic Credit: Stamp designed by Mister Pixel from the Noun Project.

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