Even if you aren’t totally familiar with what a trademark is and its purpose, you might be surprised to learn that you already know quite a few of them pretty well.
A few examples of trademarks are FedEx (delivery services), Newman’s Own (food products), and Tesla (cars and trucks).
So what exactly is a trademark?
A trademark, which is also simply referred to as a “mark,” is a type of intangible asset that can be a distinctive word, phrase, logo, graphic symbol, or other devices that’s used to identify a business’s product or service, and to distinguish it from competitors.
Just seeing a trademark can instantly remind you of what a brand is all about and what it has to offer, so trademarks are super valuable business assets. At the same time, though, trademarks can also become a legal minefield.
Treading carefully when it comes to trademarks is important because, if you aren’t careful and don’t follow the rules, you might infringe on another business’s trademark. And that could lead to a costly and embarrassing lawsuit. No business needs that!
To keep your business, and life, lawsuit free, we’ve put together some information about trademarks and how to choose a trademark without getting into legal trouble.
While we’ve made every effort to ensure that this information is accurate and up-to-date, just keep in mind that it doesn’t constitute legal advice, and it shouldn’t be considered a substitute for legal advice. If you have any questions or concerns regarding trademarks, consult with an attorney for personalized advice.
Before we dive into how to avoid trademark disputes, let’s go over a few things you should know about trademarks:
Trademarks help prevent consumer confusion
When a consumer comes across a trademark for a particular business, they know what that company is all about. And if a consumer sees another trademark that’s similar to a trademark that’s been around for a while, it’s likely that person will be confused.
This means that, if you have to stop trademark infringement, you need to provide proof that consumers would become confused if they saw your competitor’s trademark.
There are some things that can’t be used as trademarks
Not everything can be a trademark. For example, a generic term like “computers” (Apple Computers) or “trucks” (Ford Trucks) can’t be protected by itself.
There are lots of other specific items that can’t be used as trademarks, including an accurate representation of the American flag.
Famous trademarks will get special protection
Well-known trademarks are considered different from your typical trademark. A company that owns a famous trademark can go up against you if you tarnish their trademark or blur its effect in any way.
The bottom line? Avoid getting into conflicts with big brands like Starbucks or McDonald’s that have famous trademarks.
As a trademark owner, you’re in charge of enforcing your rights
When it comes to protecting your trademark, it’s up to you, the trademark owner, to chase an infringer. With the exception of counterfeiters, the government doesn’t prosecute trademark abusers.
Trademark law can be really confusing
If you’re ever in doubt when it comes to your trademark and protecting it, or avoiding infringing upon another company’s trademark, it’s best to seek professional legal advice.
Real talk, trademark law isn’t easy and can be confusing and ambiguous. Spending a little bit of money on attorney fees to receive advice upfront might save a lot more money in the long run.
Is Your Business Name Considered a Trademark?
Okay, now that you know a few basic rules about trademarks, the question becomes, is your business name considered a trademark?
After all, the very first step in protecting your business from trademark infringement is determining whether you’re already using, or will end up using, your business name as a trademark.
How do you know if you’re using a trademark?
You’re using your business name as a trademark if your business name features prominently on your packaging, signage, delivery truck, or ads.
For example, Rosie Rodriguez registers “Rose Petals, LLC” as her business name but advertises her business as “Rose Petals Nail Salon.” In this case, Rosie is using her business name, “Rose Petals,” as a trademark.
You aren’t using your business name as a trademark if you only use it on formal documents for things like bank accounts, tax filings, creditors, and potential lawsuits.
Let’s go back to the Rosie Rodriguez example. Let’s say that she registers her business name as “Rodriguez Salon, LLC.” Then she opens a bank account with that formal business name, but promotes her business as “Rose Petals Nail Salon” and uses that name on her ads and signs. In this case, Rosie isn’t using her business name as a trademark.
If you choose to use your business name as a trademark, you might run into a trademark dispute, and you might have to change your name if it’s deemed too similar to an existing trademark for similar goods and services.
Here’s another example with our friend Rosie Rodriguez. If someone is already using the name “Rose Petals Nail Salon” for a nail salon in the area where Rosie has her salon, she might have to change the name.
Also, keep in mind that when you form your LLC your state’s Secretary of State will usually run a name clearance check. Your proposed business name will only be accepted if there aren’t any conflicting LLC names already registered in the state.
But—and this is a big “but”—this business name clearance doesn’t give you the right to use your business name as a trademark.. It’s still up to you to perform a trademark search and ensure that there won’t be any conflicts.
In the event that there’s a trademark conflict, you might have to change your business name or offer your products or services under a different name.
Check out our Guide page, to get state by state tips on how to find the perfect name for your new business.
How to Avoid Trademark Disputes
When competing businesses adopt similar names, the law usually favors the first business that used the name on a category of goods or services within a geographic area.
For example, no one is allowed to use the name FedEx for a delivery service because they were the first business to use that name. If you tried to use that name, you’d get sued by FedEx for trademark infringement, and you’d have to stop using the name and pay damages.
No one wants to deal with a trademark dispute. So, before deciding to use a trademark, perform a thorough trademark search. This is the best way to find out whether or not your choice for a trademark is already being used by someone else.
Again, trademark law will reward the first user of a trademark on goods and services. So, if you aren’t the first user of a trademark, you might have to change your mark, pay damages, or pay for permission to use the mark.
Breaking Down Trademark Research
A trademark search is an investigation to discover if any potential conflicts exist between a proposed trademark and an existing trademark.
This search helps reduce the possibility of inadvertently using a trademark that belongs to another business. It should come as no surprise that this should be done before a proposed trademark is used, and even before your business name is registered.
You can conduct your own preliminary trademark search online to find out if a trademark is federally registered. But if you want to be as thorough as possible, it’s best to pay for a professional search.
To conduct a simple search for a trademark:
- Visit the U.S. Patent and Trademark Office’s website.
- Select “Search Trademark Database.”
- Select “Use Trademark Electronic Search System (TESS).” This will provide you with free access to records of federally registered trademarks, along with those that are pending.
- Select “New User Form Search (Basic).” Then select the “Live” button under “View Search History.”
- In the Search Term box, type the name that you’re using. Disregard the generic terms included with your trademark. So, for example, you’d use “Rose Petals” for “Rose Petals Salon” because “salon” is a generic term that can’t be protected by trademark law.
- Click “Submit Query” to get to the Records page, which will show you the existing and pending trademark registrations. You can easily recognize pending registrations because they don’t have a “Reg. Number.”
- Open each record and review the “Goods and Services,” making a note of any records that offer similar goods or services as your business.
No matches for name and goods/services? Then it’s likely there aren’t any conflicting registered trademarks. Woohoo!
Notice any potential trademark conflicts? Then you either want to consult an attorney, assume the risk of using a similar name, or ditch the business name and come up with a new one.
Other options for trademark search:
- A privately owned fee-based online trademark database can provide current U.S. Patent and Trademark Office (USPTO) trademark information. Search for trademark services online to find a database that you can use.
- A basic internet search can also reveal a potential conflict with existing products or services with similar names and similar domain names. You can even use a site like Instant Domain Search to search for similar domains.
How to Get Trademark Protection
If you find the ideal trademark for your business (one that isn’t going to conflict with any others already in use), it’s time to take steps to protect your trademark from other businesses.
But, here’s the thing: registering your trademark isn’t essential for trademark protection. Yep, you read that right. That’s because unregistered trademarks receive what’s known as “common law” protection.
Want to go beyond common law protection? You can secure exclusive rights to use your trademark. In this case, registering your trademark is necessary.
Federal Trademark Registration with the United States Patent and Trademark Office (USPTO)
This is the strongest, most comprehensive nationwide protection you can get for your trademark.
Start by using the online Trademark Electronic Application System (a.k.a. TEAS), which is found on the USPTO website.
This is an interactive system, and you’ll be asked a series of questions. If a question isn’t answered or an essential element isn’t completed, you’ll need to correct the errors.
Rest assured that the system is easy to use and the USPTO site provides plenty of guidance.
If you’d rather not complete the USPTO application on your own, you can use a trademark registration service, or =consult with an attorney.
Prepare to pay a USPTO trademark registration filing fee, which could range from $225 to $400.
State Trademark Registration
This isn’t going to provide the same powerful protection that a federal registration would provide. And many trademark attorneys actually disfavor this type of registration. But, you do have the option to register your trademark in your state.
Let’s look at California as an example. A California trademark registration is a method of putting other businesses on notice that you’re claiming trademark rights in the state of California (and only in that state).
The application that you’ll have to fill out is simpler than the federal application discussed above, and the filing will also be less expensive (around $70). Also, the examination process is less rigorous as well.
Trademark Research: An Important Step When Establishing an LLC
Overall, trademark research and registration can be a little confusing at first. The key is to remember that trademark research goes both ways. You want to ensure that no one else is using your business name and that you won’t violate any existing trademarks.
While it’s time-consuming, a little bit of upfront work goes a long way and it’s totally worth it to protect your business and your brand.
Stephen has dedicated his career as an attorney and author to writing useful, authoritative and recognized guides on taxes and business law for small businesses, entrepreneurs, independent contractors, and freelancers. He is the author of over 20 books and hundreds of articles and has been quoted in The New York Times, Wall Street Journal, Chicago Tribune, and many other publications. Among his books are Deduct It! Lower Your Small Business Taxes, Working with Independent Contractors, and Working for Yourself: Law and Taxes for Independent Contractors, Freelancers & Consultants.