The Business Name on Your Formation Documents vs. Trademark Rights: What’s the Difference?
If you know me well, you know exactly which band I owe an apology to for this post title desecrating their 1989 hit and some other bad puns in this post. I’m sorry, guys! (If you don’t know, they released a great new album on April 4 of this year, and you should search for “Never Enough song from 1989” to find out.) Ok, time to switch from one of my favorite topics to another, which is talking about important trademark issues for business owners.
Starting a new business is exciting—you pick a great name, file your registration with the state, and boom! You’re official. But here’s the catch: just because you’ve registered your business name with your state doesn’t mean you actually own the rights to that name. Using it with the public may even be trademark infringement. No joke!
The Business Name on Your Formation Documents vs. Trademark Rights: What’s the Difference?
When you register your business with your state, you pick a name and put it on the formation documents you file with the state to ask the state to let you use that name as the official legal business name. Maybe you’ll also file an assumed name application if you’d like to use a different name with the public than the legal business name.
On paper, then, you have a legal business name and perhaps an assumed name for the business. That DOESN’T mean you have the right to use either of those names publicly in connection with your business. That may seem all kinds of wrong, but it’s accurate.
Trademark rights are indeed a completely separate issue—at the federal level (via the U.S. Patent and Trademark Office), the state level, or even at common law (which is use without registration and based on actual use in commerce).
Trademark rights are about who owns the right to use that business name with the public. If you don’t have the trademark rights to a name, using it with the public is risking an accusation of trademark infringement. You need to assess your trademark rights separately before you use a name with the public.
Don’t Let the State Let You Down: The Risk of Unintended Trademark Infringement
How is it that getting your business formation documents approved by your Secretary of State’s business office isn’t enough to give you trademark rights to your business name?
Here’s the thing that made the jaws of many of my lawyer colleagues hit the floor when I taught a class on intellectual property issue-spotting for non-IP lawyers last summer: To approve your business name the state searches only their business registration records to make sure no one else in the state has the same official name for a similar business entity. States don’t even search their own trademark databases when approving a business registration.
That’s right. That seems crazy, but it’s true! That means the state may approve a business registration for a company with a name that is already registered as a trademark in that very state by another business.
The states also don’t search the nationwide federal trademark database from the USPTO, nor do they search the internet for common-law, or unregistered, use of the name.
That’s why state registration of a business provides ZERO assurance that
- the name is available to you to use as a trademark, and
- the registered name isn’t infringing someone else’s trademark rights.
You could register your business name with the state only to find out later that another business—perhaps in a different state—already owns the federal trademark for that name. If that business operates nationally or even in a related industry, they could send you a cease-and-desist letter, and you’d lose against that like someone bringing a knife to a gunfight. You may owe them a large sum of money for damages and attorney fees. You’d be forced to rebrand and do so by a deadline the other company or a court sets. That’s not just inconvenient—it’s costly in terms of money, time, and customer confusion.
So how DO you make sure you really own the rights to your business or product name and aren’t infringing on someone else’s rights?
Get Up to Speed: How to Clear and Protect Your Business Name
To avoid the headaches of finding out your business name is infringing on someone else’s trademark, unavailable to you as an enforceable trademark, or both, take these steps before settling on a name:
- Have a Trademark Search Done By an Experienced Trademark Attorney – They will search the USPTO’s database (TESS) for existing trademarks, check social media, domain names, online state business registries, and general online searches for businesses using a similar name. Then they’ll analyze the results and discuss your options with you, whether it’s an all-clear or there are major red flags.
- Document Your Use – The dates when you first use the mark anywhere (e.g., and “coming soon” sign) and when you first use the mark with offering services or sales of products to customers are the most important trademark dates. They determine your seniority if there is ever a conflict with someone else over who has better rights to a name. That’s why it’s important to keep records and dated examples of use (e.g., a screenshot of your website with the date in the header, a photo of your store with you holding up a newspaper with that day’s date on it, etc.).
- Register a Trademark – If your business name is crucial to your brand, consider filing for a federal trademark registration. This gives you nationwide protection and the legal upper hand if someone else tries to use your name. Federal trademark protection trumps state-level registrations. If you use the name for customers in more than one state, you can qualify for federal registration. If you’ve registered with the USPTO, or even submitted an application, other business owners having a search done to clear their own names will find yours and know you already have staked your claim and the name isn’t available to them.
Something to Rely On: Trademark Clearance and Registration, NOT Business Formation Documents
Registering your business name with the state through your formation documents is a good first step in protecting your business name, but all it means is that there isn’t an identical business name in your state. That doesn’t mean no other business has that name or one confusingly similar to it, so it doesn’t mean you have trademark rights to it or that you won’t be committing trademark infringement by using it with the public.
Having a thorough trademark search by an experienced trademark attorney can help you pick a non-infringing name you can make sure isn’t trademark infringement and that you can secure as yours through trademark registration.
Trademark search and application for registration before committing to a business name is a worthy investment that will help you secure your brand, avoid legal trouble, and save time and money down the road. You can even have a search done and apply for registration long after you’ve been in operation, as long as that search doesn’t turn up anything problematic. If it does, you can work with a trademark attorney on quietly rebranding asap.
Now that you know these trademark facts, you know it’s truly never enough to rely on your secretary of state’s office for trademark clearance or protection and you’re ready to start working with an experienced trademark attorney to know and protect your rights to your business name.
If you’d like help with trademarks, let’s talk.
You can book a consultation online, call my office, use my contact form, or send me an email.
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