“Do I need to register a trademark after registering my business or company name with the Registrar of companies and business names?”. This is a very common question in my field of practice. This article, therefore, strives to address misconceptions veiled in the question: Is there a difference between business names and trademarks? What is the difference and do we need both?
The terms trade name and trademark sound similar, but it is important for business owners—especially those who are in the initial startup phase—to know the difference. 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. In fact, this process, if not well thought and done can either land the proprietor into expensive legal disputes or compel the business to rebrand or both situations.
The law makes a definite distinction between the two terms—a trade name refers to the company’s official name, while a trademark provides a company’s brand with legal protection. At this point, you may need to note that a company’s brands may include its products and corporate identity (and image). As a strong precaution, companies should avoid choosing trade names that are too close to a registered trademark, as this could expose owners to a potential lawsuit. In most territories, a trademark that is well registered and effectuated is highly likely to win the case.
Boldly, a trade name is an official name under which an individual or company conducts business while a trademark offers companies legal protection for a particular brand, which may be associated with a trade name. A 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 commonly known as a doing business as (DBA) or a “trading as” name. 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.
Laws vary on requirements for registering a trade name, but most territories require registration either with the state government or through a 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. A trademark can be associated with or it can be part of your trade name and can be used to provide legal protection for the use of names, logos, symbols, or company slogans. Two easily recognized examples of trademarks are Nikes swoosh symbol and Cokes Coca-Cola written in its distinctive script. There are requirements to be met before trade names are accepted and registered by the Registrar of companies just as there are conditions that names or marks that are to be registered as trademark must meet.
Usually, registration of trademarks is more rigorous process and takes a longer time than registration of trade names. In Kenya, for example, registration of trade names may take between a few day and a few weeks while straight registration of trademarks may take up to seven months. The cost of registration of trademarks may also be significantly higher compared to the cost of registration of trade mane. But it is worth the cost to have a registered trademark because, ideally, registration of trademarks has the following benefits:
BENEFIT 1: Usually, the burden of proof is much higher should someone copy or infringe upon your unregistered mark. Conversely, registration of your trademark gives you additional protections, including presumed ownership, and diminished the burden of proof.
BENEFIT 2: There is a risk that if you accidentally infringe upon someone else’s name or trademark, you could be sued by the registered trademark owner and may have to pay legal fees and fines as well as give up all profits obtained under the unregistered mark. The registration process ensures that your trademark is not similar to any other registered trademarks.
BENEFIT 3: Registering the trademark ensures that other companies will not have a similar trademark, and gives your company exclusive rights to operate and market under said trademark. This gives you a competitive edge over your competitors by setting you apart from and probably ahead of them.
BENEFIT 4: Your trademark could also provide the right to legal action against anyone that infringes upon it.
BENEFIT 5: You can use the symbol, “®” after your trademark, which indicates your mark is registered, adding to the prestige of your company.
BENEFIT 6: If your company wants to expand into other countries, you can use your trademark registration for foreign trademark filing.
Generally, registration of a trademark guarantees an individual or business the exclusive use of the trademark, establishes legally that the trademark was not already being used by any other business entity prior to your registration of it, and provides official government protection from any other business subsequently infringing on your registered trademark.
Having said all these, I leave you with a question: since a business name can also be registered as a trademark and vice versa, should you register the business name first or the trademark first and why?