Brett J. Trout
Registered Legal Name vs. Trade Name vs. Trademark
What is the difference between a registered legal name, a trade name, and a trademark? It is important to know the difference as they are all used differently for different purposes, and using them incorrectly could cause a company to lose the rights to at least one of them. First, a registered legal name is the legal name of your business such as ACME Corp. or SmithCo, LLC. It is the name a company uses in formal legal agreements and government filings. A registered legal name is a noun (this will be important later).
Second, a trade name is the name a company usually goes by, such as ACME (without the “Corp.”) or SmithCo (without the “LLC”). Although it may, a trade name does not have to, match the registered legal name. For instance, the registered legal name of your company may be ACME Corp. but the customer-facing name you use for your company may be something like KewlTewls. In cases like this, companies typically must register the trade name as a “d.b.a” (doing business as) with their state. The d.b.a links the trade name to the registered legal name so anyone harmed by the company may determine the registered legal name of the company to pursue legal action. Like a registered legal name, a trade name is also a noun.
Third, a trademark is something that indicates to consumers the source of particular goods or services. A trademark may be a word, name, phrase or symbol. Trademarks can even be colors, sounds, or even smells. The Nike “swoosh” is an example of a trademark. By identifying the source of goods or services, trademarks allow consumers to see the trademark as a symbol of trust, indicating the quality good or service they have experienced in the past. Unlike registered legal names and trade names, trademarks are not nouns, but adjectives. While a trademark may be similar to a company’s registered legal name and trade name, unlike registered legal names and trade names, you should always use trademarks as an adjective in conjunction with a noun identifying the generic good or service associated with the trademark. An example of a company using its various types of names might look like this:
Registered legal name: Acme Corp. has entered into a lease agreement with SmithCo, LLC. (used as a noun)
Trade name: Acme has just opened a new store at 123 Main Street. (used as a noun)
Trademark: Acme widgets are guaranteed for life. (used as an adjective modifying the noun “widgets”)
It is important to always use your trademark as an adjective rather than a noun. Using your trademark as a noun may cause your trademark to become generic, leading to the loss of your trademark rights. Valuable trademarks like escalator, aspirin, and cellophane were all lost as a result of their owners failing to prevent them from becoming unprotectable generic nouns.
Your Company’s Most Valuable Asset
While registering a legal name is often necessary, registered legal names are often not particularly valuable. This is because the government agency registering legal names only cares that no two registered legal names are exactly the same. Because such agencies will often allow the registration by different entities of extremely similar names (such as ACME’s LLC and ACMEs’ LLC) registered legal names are not always what a consumer associates with a good or a service they want to purchase. Trademarks, however, must not only be technically different from one another, they must also be different enough to avoid a likelihood that a consumer might be confused that a particular trademark identifies the goods or services of a competitor. This gives the trademark owner wide latitude to keep competitors from using a similar trademark to trade on the goodwill the trademark owner has developed among its customers.
Many companies have multiple trademarks for multiple product lines. Some companies even have “families” of trademarks connected by a common mark. An example of a family mark is McDonalds’ use of the “Mc” trademark to identify several of its products: McMuffin, McRib, McChicken, etc. owning multiple trademarks allow consumers to associate your company with each of its goods and services. Due to their enormous value in differentiating products from those of competitors, trademarks are the most valuable asset of many companies. Your trademark is what consumers think of when they think of your company. Your company’s trademarks embody the goodwill of your company. This is why it is important to not only vet your potential trademarks to make sure they do not infringe anyone else’s trademarks, but to register and enforce your trademarks against infringers trying to use your reputation to trick customers into buying their inferior product.
Protecting your Trademark
Before you invest a large amount of time and money getting consumers to associate a particular name or logo with your company’s goods or services, contact a trademark attorney to make sure you are not running afoul of any obvious trademark no-nos like infringing or unregistrable trademarks. Once you are on track with the right trademark, you can rest easy knowing that your future marketing campaigns are not going toward promoting a brand you may have to change as soon as it gets popular. For more information on trademarks, check out our FAQ.
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