How Much Protection Does a Trademark Really Give Your Business?
So you’ve registered your business name with the state ... great! Now you might be wondering, “Should I take the extra step of filing for a trademark?”
Many new business owners have asked me that question. Ultimately, the decision is yours. But before making it, you should understand the protections offered by a trademark vs. a registered name only.
The protection you will—and won’t—get without a trademark
Once the state approves your LLC or corporation application, your name is protected in the state. The state will not allow any other business to form an LLC or corporation using your name. Although that does provide some protection, there’s still the chance that another business operating as a sole proprietorship or partnership might use your name. They will not be able to register the name as an LLC or corporation, but they could still provide similar products and services within your market—even within the town.
And registering your name with the state won’t prevent any business in the other 49 states from using your name. For example, if you registered your business name in Idaho, nothing prevents another entrepreneur in Indiana from establishing an LLC or corporation using your company’s name.
Will brand protection at the state level be sufficient for your business? Maybe. Or maybe not. It depends on the type of business and your business model. If there’s little chance that customers will become confused and mistake another business for yours, the state protection might be all you really need. For instance, if you start a landscaping business serving customers within a 40-mile radius of your office, you may not care if another landscaping company in a different state uses your name. After all, you won’t be competing for the same customers.
If, however, you’ve got your sights set on expanding your business and selling your products and services beyond your state’s boundaries, you’ll want to seriously consider protecting your name on a federal level with a trademark.
Trademark protection for more peace of mind
By definition, a trademark is a word, phrase, symbol, or design (or a combination of any of them) identifying the source of a product or service. It also serves to distinguish brands from their competitors.
Granted at the federal level by the U.S. Patent and Trademark Office (USPTO), trademarks can be approved for distinctive names, slogans, and logos.
A trademark owner has exclusive rights—at the state and federal level—to the trademark, therefore preventing anyone else selling similar goods and services from using it anywhere within the United States.
Preventing confusion in the marketplace is the primary purpose of trademarks. The protection a trademark provides will apply to only a particular category of goods and services. For instance, even if you had a trademark approved for your restaurant name “Dig In,” an excavating company might be able to form a company using the exact same name. Consumers would most likely never confuse the excavating company with yours, even though they share the same name.
TM vs. ®
Even if you haven’t officially applied to register a trademark for your company, you might consider conveying the name is yours by using TM (or SM for “service mark”) after it.
According to the USPTO website, “Any time you claim rights in a mark, you may use the ‘TM’ (trademark) or ‘SM’ (service mark) designation to alert the public to your claim, regardless of whether you have filed an application with the USPTO.”
Using TM or SM sends the message to other businesses that you’re stating ownership of the wording, symbol, or design. But without officially claiming your mark by registering it with the USPTO, may have difficulty bringing legal action against another party if they use something that’s the same or very similar.
I recommend locking up trademark rights for your company as soon as possible—even if you haven’t started selling your products or services yet—by submitting a trademark application.
If the USPTO approves your application, you can use the official federal registration symbol “®” after your mark. Please, please, please do not use that symbol until after the USPTO actually approves and registers the mark—not while your application is pending!
What to expect during the trademark registration process
If you decide to apply for a trademark, I advise conducting a free basic search to make sure no one else who will be doing business in a similar capacity has a pending application with the USPTO for your proposed trademark. Next, do a comprehensive name search to check if anyone is using your proposed name at your state or local level. I can’t stress the importance of this enough; the USPTO will reject your application and you’ll lose the nonrefundable $275 application fee in the process!
The trademark registration process may take anywhere from nine months to several years, depending on the complexity of the mark and any issues that may surface when the USPTO reviews your application. Typically, most applications are completely processed within a year. Once you file your paperwork, you’ll receive a receipt that marks your filing date. To avoid future trademark disputes, your best bet is to file earlier rather than later.
Once you have your trademark approved, it will be effective for 10 years. When that term expires, you can renew it for another 10 years—and you’re not limited in how many times you can renew your trademark.
What’s at stake without a trademark?
Your brand image is without a doubt one of your most valuable assets. If stolen or closely duplicated, the results could be debilitating to your business. Remember, registering your business name guarantees some level of protection, but it may not be enough to safeguard your brand from imposters. A registered trademark gives you a stronger leg to stand on and it covers a lot more territory.
