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What is a Trademark? How is it Different from a Business Formation Name?

Published on Feb 24, 2012


Read our article, 'What is a Trademark? How is it Different from a Business Formation Name?' at 'Time to Start Up,' the small business blog by BizFilings.
What is a TrademarkForming a small business can be a lot of work. It can also be confusing and overwhelming. Once you’ve finally decided on a company name, formation type, and which state is best for you to incorporate, you might be hoping that your start-up decisions are finished (at least for a little while). But there’s another decision to be made — yet another question to answer: Do you need to trademark your company name? Although important, this subject is not nearly as well known as the one’s mentioned above. So I’d like to take this opportunity to define what a trademark is, and why your small business might need one. We’ll also take a look at how a trademark is different from the business formation name you attained from the state(s) you’re doing business in.

What is a Trademark?

We’ve all seen them. One of those little symbols (™ or ®) that sit at the end of a business or product name. Most people are aware that they represent some sort of trademark, but its exact purpose isn’t always as clearly understood. A trademark is a way to protect what is called “intellectual property.” Traditionally, it’s denoted by the trademark symbol TM or by the federal registration symbol ® if an actual registration filing has been approved by the United States Patent and Trademark Office (USPTO). There is a third symbol, called a service mark (denoted by the symbol SM), which offers virtually the same protection as a trademark but is used instead to identify and distinguish services rather than products. Typically, when the term “trademark” or “mark” is used, it is understood to include service mark as well. A trademark is generally tethered to a brand name or a design. It can be applied to a business, a product, or can be used in connection with services. Different than a patent or copyright, a trademark essentially prevents unfair competition. In other words, I can’t start a car company called Ford, because Ford holds a federal registration symbol on their name. They want exclusive use of their name, which can most effectively be attained by attaining a trademark on a federal level (as well as incorporating on a state level). Trademark law protects you, the owner, from competitors stealing your identity or using a name or symbol so similar that it could cause confusion for your clients or customers. By identifying a product or service’s source, a trademark or service mark also serves to protect consumers from deception.

Trademark vs. Business Formation

There’s an important distinction to be made here between federal and state — one that directly correlates to trademarks and business formations. When you form a company in any U.S. state, or states, you are filing a business formation (LLC, S corp, C corp, nonprofit …) within each respective state. Part of this process is doing a business name check to determine if your preferred company name is available in that state. Many small business owners believe that this is all they need to do to protect their name. In reality, there could be another company forming under the same business name in other states. The point here is that company names are being approved on a state level. A trademark comes into play when you want to protect your name on a national (federal) level. Let’s say that Ford didn’t attain a federal registration symbol. I couldn’t go into their state and form a company with the same name, but I could file for a trademark on the federal level. As you can see, this can cause all types of problems — including lawsuits. Forming your small business, and continuing to meet your state’s requirements, typically provides you with limited liability protection. But your company name is not fully protected unless you also attain a trademark. And if you want to build a brand like Nike, Apple or Ford, you’ve got to get a stronghold on your company name so it’s yours and yours alone.

Free Trademark Search

The United States Patent and Trademark Office offers a free search tool, called TESS Search Trademarks, to help you determine whether or not a particular name is available for trademark.

We’re Here to Help

If you have questions about trademarks, or forming your small business, feel free to give our customer service team a call between 8am and 7pm CST, at 800-981-7183. You can also visit our Contact Us page to speak with us via Live Chat during the same days and times. Or, send us an e-mail anytime. We’re always happy to help. Business Blogs blog