The terms “trade name” and “trademark” sound similar, but it’s important for business owners especially those just starting businesses to know the difference. The law makes a definite distinction between the two,trade name and a trademark, and it’s important to avoid choosing a trade name that’s too close to a registered trademark, as this could expose you to a potential lawsuit. Selecting and registering trade names and trademarks is an important part of establishing a brand presence and recognition in the marketplace for a company and its products, so it’s a process that should be considered carefully. The difference between a trade name and a trademark can be known through following.
What is a Trade Name?
A trade name is simply the official name under which an individual as a sole proprietor, or a company, chooses to do business. A trade name is commonly known as a “doing business as” (DBA) name. Legally registering a trade name is an important step in branding for a company, but it doesn’t provide an unlimited brand name or use of the name legal protection. State laws vary on requirements for registering a trade name, but most states require registration either with the state government or through your local county clerk’s office. The practical function of registering a trade name is primarily for administrative and accounting purposes, such as filing a corporate tax return with the IRS, separate from your personal income tax return.
Registration requirements for trade names are really geared more towards making tax collections agencies. In many states, registering a tradename does not prevent anyone else from operating a business under the same trade name. However, even though providing a tradename does not provide a legal protection in a way that registering a trademark does.
What is a Trademark?
A trademark is a more significant step identified with establishing a brand recognition in the marketplace. A trademark can be associated with, or a part of your trade name, and can be used to provide legal protection for the use of names, logos, symbols or company slogan.
But ,trade name and a trademark, in which a trademark requires separate registration from tradename, and this must be done at federal level rather than just at state level. The registration of trademark guarantees an indivisual or business the exclusive use of trademark, established legally,that the trademark was not already being used by any other business entity prior to your registration of it. It also provides legal liability protection against someone subsequently claiming that you are infringing on a previously registered trademark. In registering a trademark, you or your business can directly register the trademark, or you can choose a lawyer who handles intellectual property law or trademark registration.
Trade name is the official name under which a company does business and a trademark is the brand name you are using when you do business. They can be the same, but it is not necessary (eg Coke inc would be the trade name and Coca-Cola written in a distinctive script would be the trademark. You can register your trademark to improve the protection of your brand name against misuse (facilitate the proof ). When a trademark is registered you will see a “R” in a circle next to it. When you see “TM” it merely means that it is used as trademark, but it is not registered.
