![]() If you have not, then your value as a business could be drastically diminished if there is nothing to prevent others from taking the ideas for free that you are now trying to sell at a premium to investors. …As Will Potential Investorsįor this very reason, investors who are considering putting money into your business or even in purchasing your business for their own portfolio will also be looking to see whether you have properly protected your IP through registering the appropriate trademarks. If you took a huge gamble on opening a laundromat/yoga-studio called “LaundroYogaMat” and it turned into a smashing success but you failed to trademark the business name, don’t be surprised if a slew of LaundroYogaMat knock-offs pop up elsewhere, making money that should have been yours. Competitors Will Be Monitoring Your Trademark Status…īecause businesses operating without registered trademark protection are vulnerable to competitors swooping in and seizing on your great idea and business name and opening up shop with your name elsewhere in the country, you can better believe that that is just what they will do. For example, if you open up three “Esther’s Cupcakes” locations across Queens that do quite well, then a competitor may not be able to come into Queens and open up his own “Esther’s Cupcakes,” but that competitor could open up shops with that same business name pretty much anywhere else if you have not registered a federal trademark for the name. ![]() While use of a company name in a given geographical region can provide protection from other companies entering that same region and using the name, it will not provide protection outside that region. There is some truth to this, but the protection this so-called “common law trademark” is very limited. You may have also heard that simply operating your business for some period of time without registering a trademark will nevertheless grant you trademark protection against competitors. A “Common Law Trademark” Provides Very Limited Protection But this process does nothing to give your business trademark protection for its name from competitor businesses, especially those operating in other states. This misunderstanding is often due to the fact that state authorities will check to see if your business name is the same or similar to those already operating in the state. Many startup founders mistakenly think that registering their company with the state as an LLC or other business entity provides them with intellectual property (IP) protection for their business name. Registering Your Business With the State Does Not Provide Trademark Protection If you have not trademarked your business name, the time is now to take action to protect your brand and help it continue to grow. But have you taken the steps to trademark your business name? Every year, entrepreneurs and visionaries create incredible businesses only to watch someone walk away with value that should be theirs through failure to timely seek and obtain trademark protection for their business name. The practical function of registering a trade name is primarily for administrative and accounting purposes, such as filing a corporate tax return with the Internal Revenue Service (IRS) which is in addition to your personal income tax return.So you quit the day job, took out loans, corralled investors, worked day and night to create a vision and bring it to life, and now you have achieved the dream: you’ve built a growing business on your own terms. State laws vary on requirements for registering a trade name, but most states require registration either with the state government or through a county clerk’s office. Registering a trade name legally is an important step in branding for a company, but it doesn't provide an unlimited brand name or legal protection for the use of the name. A trade name is commonly known as a doing business as (DBA) name. A trademark offers companies legal protection for a particular brand, which may be associated with a trade name.Ī trade name is the official name under which an individual as a sole proprietor or a company chooses to do business.A trade name is an official name under which an individual or company conducts business.Trade names and trademarks are distinctly different from a legal perspective.
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