I Registered My Business Name With the State. Do I Still Need a Trademark?

You finally settled on the right name for your business. You searched the state’s records, filed your LLC paperwork, and received confirmation that the name was accepted. Maybe you bought the matching domain name, created your social media accounts, and started putting the name on your website and marketing materials.

At that point, it would be easy to think, “Great. The name is mine.”

But that is where business registration and trademark law part ways.

Registering an LLC, corporation, or business name with a state is not the same as obtaining trademark protection for that name. The two processes serve different purposes, and understanding the difference can be especially important before you invest significant time and money building a brand.

A business name and a trademark do different jobs

Your business name identifies your legal business entity.

Suppose you form Blue Willow Design, LLC. That is the legal name of the company.

A trademark does something different. It helps customers identify the source of particular products or services. A trademark can be a business or brand name, but it can also be a logo, slogan, product name, or another indicator that tells customers, “This comes from this particular business.”

Sometimes the same name does both jobs.

If Blue Willow Design, LLC provides interior design services to customers as BLUE WILLOW DESIGN, the name identifies the company, but customers may also recognize BLUE WILLOW DESIGN as the brand behind those services.

Simply using a name as the legal name of your company, however, does not make it eligible for federal trademark registration. The name must also be used in a way that helps customers identify your business as the source of particular products or services.

“But the state approved my name”

This is where many business owners understandably get tripped up.

You submitted your name to the state. The state accepted it. You received official paperwork showing that your company exists. It is perfectly reasonable to think someone must have checked the name first.

The state did check it, but not for the same things that matter under trademark law.

States have their own requirements for determining whether a proposed business name can be registered. That process is not a trademark clearance search, and state approval does not necessarily mean:

• the name is available for use as a trademark;
• no one else has earlier rights in the same or a similar name;
• the United States Patent and Trademark Office will register the name; or
• your use of the name cannot infringe someone else’s trademark rights.

I think of these as two separate questions. Will the state let you create a company under this name? And can you build a brand around this name without running into someone else’s trademark rights?

Getting a “yes” to the first question does not answer the second.

Trademark problems are not limited to identical names

Another common misconception is that a trademark search is simply a search for someone using the exact same name.

It isn’t.

Imagine that you plan to sell skincare products under the hypothetical name Luma Belle. You search your state’s business records and find no “Luma Belle, LLC.” That is useful information, but it does not tell you whether someone is already selling related products under a name such as LumaBell or Luma Belle Naturals.

Whether either of those names would actually create a trademark conflict would depend on the facts. The point is that trademark law looks beyond exact matches.

An important question is whether consumers are likely to be confused about the source of the products or services. That can require looking at how similar the marks are in appearance, sound, meaning, and overall impression, as well as how closely related the products or services are.

Adding a word or changing the spelling slightly does not automatically solve a potential trademark problem. At the same time, businesses sometimes can use the same or similar words when the circumstances are sufficiently different.

That is one reason trademark clearance requires more than typing a name into a database and looking for an exact match.

Can you have trademark rights without federal registration?

Yes.

In the United States, trademark rights can arise from actually using a mark to identify your products or services. These are commonly called common-law trademark rights.

Federal registration is not required before trademark rights can exist.

But unregistered rights have limitations. Among other things, common-law rights are generally tied to the geographic market where the mark has been used and established rights. Exactly how far those rights extend depends on the circumstances.

That may matter less to a business that operates only in a small local market. It can matter considerably more when that business begins selling online, reaching customers in other states, opening additional locations, or otherwise expanding — and it can matter a great deal if another business starts using the same name.

What does federal trademark registration add?

Federal registration can provide significant advantages beyond state business registration and common-law rights.

A registration on the United States Patent and Trademark Office’s Principal Register can provide important legal presumptions concerning the validity and ownership of the trademark and the registrant’s exclusive right to use it in commerce for the products or services covered by the registration, subject to applicable limitations and defenses.

Registration also places the mark in the federal trademark database and provides nationwide public notice of the owner’s claim.

Federal registration can provide important priority and geographic benefits as well, although earlier users may have rights that still must be considered.

What registration does not do is give you ownership of a word or phrase for every conceivable purpose. Trademark rights are connected to particular products and services. Registration also does not guarantee that another party will never challenge your rights or use a similar mark.

The best time to find a problem is usually before you invest in the name

This is where trademark law becomes a very practical business issue.

Imagine an entrepreneur preparing to launch an online children’s clothing company. She forms her LLC, buys the domain name, hires a designer to create a logo, orders branded packaging, builds her website, creates social media accounts, and begins advertising.

Then she investigates the trademark and discovers a potentially serious conflict with an earlier trademark owner selling related products.

Now changing the name is not simply a matter of filing another form with the state. It may mean changing packaging, inventory, advertising, website content, social media accounts, and other materials the business has already paid for.

That does not mean every business needs to federally register every name, logo, slogan, or product name.

It does mean that the cost and disruption of discovering a naming problem can increase as you invest more in the brand.

From a business standpoint, that is why I prefer to think about trademark clearance as part of choosing and developing a brand, not simply as something you do when you are ready to file a trademark application.

So, should you register your business name as a trademark?

Not every business name needs federal trademark registration.

But if your business name is also the brand customers use to recognize your products or services, it is worth asking:

• What trademark rights do I already have?
• Could someone else have earlier rights that affect my ability to use or register the name?
• Would federal registration make sense for where my business is today and where I expect it to go?

Those questions become more important when you are preparing for a major launch, expanding into new markets, selling online, or making a substantial investment in a brand.

Your business name may have started as something you typed into an LLC filing. But once customers begin using that name to find you, remember you, and distinguish your products or services from someone else’s, the name is doing a much more important job.

And that is when it makes sense to think about it as more than just the name of your LLC.

Want to learn more?

Explore the trademark resources from Dinah Rainey Law to learn more about selecting, registering, and protecting trademarks. If you would like to discuss your particular trademark needs, you may also Schedule a Free Consultation with the firm.