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Writer's pictureDEBORAH MORTIMER

Understanding the Distinction Between Business Entity, Trade Names and Brand Names: A Trademark Perspective

Updated: Oct 8

An entrepreneurial journey often begins with choosing a business name. Many entrepreneurs mistakenly believe that a unique business name is all they need to establish their niche in the market. However, understanding the distinction between a non-consumer-facing business name and a consumer-facing brand name, along with the intricacies of trademark registration, is crucial for long-term success.

Business Names, Trade Names, and Brand Names: What’s the Difference?

Business Name: It is the official legal identity under which a company operates. It is registered with the state for legal and administrative purposes. For instance, if you establish a limited liability company named 'Smith’s Widgets LLC,' that becomes your business name. This designation is essential for tax filings and official documentation.

 

Trade Name: A trade name, also known as a DBA (doing business as) or fictitious name, is the public-facing identity under which a business operates. It appears on signage, advertising, and other public materials. This name can be a slight variation of the legal business name or entirely different for branding purposes. For example, 'Jameel's Book Store LLC' might operate under the abbreviated names 'Jameel’s Book Store' or 'Jameel’s Books,' or even a completely different trade name like 'Best Books.'

 

Brand Name: A brand name is specifically associated with a product or service marketed to consumers. It creates an emotional connection and differentiates the product from competitors. For example, "Dove" is a brand name under Unilever, Inc, representing a specific line of personal care products.

 

While trade names and brand names often intertwine in the marketplace, they serve distinct functions. A trade name can act as a brand name, but a brand name focuses more on products or services, establishing a unique identity in the marketplace.


Examples of Business and Brand Name Distinctions

A well-known example is Google Inc. The legal entity is “Google Inc.,” but the trade name and brand, “Google,” is synonymous with internet search and technology. Google has expanded its brand to include products like “YouTube,” “Gmail,” and “Google Maps,” each with its own distinct brand identity under the larger Google Inc. umbrella.

 

Another example is Unilever, Inc. As a multinational company, Unilever operates as a trade name but owns a diverse portfolio of brands like “Dove,” “Knorr,” “Lipton,” and “Ben & Jerry's.” Each brand targets different markets, showcasing how a company can manage multiple brands under one corporate structure.

 

Trademark Registration: Why It Matters

The significant difference between a business name and a brand name (or a trade name functioning as a brand) is that only brands can be trademarked. A trademark provides legal protection for your brand name, logo, and other identifiers, ensuring no other business can use a confusingly similar brand in the same category of goods or services.

 

Many entrepreneurs may think that forming an LLC or corporation is sufficient to protect their brand. However, the reality is that simply having a business name registered with the state does not prevent others from using it. The fact is, each state operates independently and each of Secretaries of State of all fifty states do not communicate with one another. Therefore, another business could register the same name in a different state without you knowing it. This is where trademark registration comes into play.

 

Trademark registration is about securing your brand identity on a national scale. First and foremost, it gives you peace of mind that you have carved out a unique path for your business and are not infringing on an already established brand. Secondary to that, it also  protects your brand from infringement and puts other businesses on notice that your brand is legally protected.

 

The Search Process: Business Formation vs. Trademark Filing

Another critical distinction lies in the search process for business formation and trademark registration. When you file for a business entity, the search is limited to the state you file in. Additionally, the search criteria is limited to finding another business within the state with the exact same name.

 

In contrast, trademark registration requires a more comprehensive search, incorporating a standard of searching for another brand that is the same or similar and used in association with the same or similar goods/services. “Similarity” is a standard that can be very broad- similarity in sound, visual impression or connotation.

 

Seeking Trademark Registration Without a Business Entity, Some Considerations

It's worth noting that business formation is not a requirement to apply for trademark registration. The only requirement is that the brand must be actively used in commerce. This means that the goods or services must bear your brand, or you must intend to use it in the near future. So, if you have a brilliant idea for a product/service brand and have not yet formed your LLC, you can still file for trademark registration as long as you demonstrate your bonafide intention to use that brand in commerce. Read more about Intent to Use applications here.

 

A Final Thought

Forming a business entity is essential for conducting business, but it's equally important to understand the difference between your consumer-facing name and the one that's not. This distinction is important when deciding what can and should be protected by trademark registration. Recognizing the differences between a business name, brand name, and trade name can help you determine how your business will be structured and operate in the marketplace. This knowledge allows you to make informed decisions about whether to align your business name with your brand name or use a DBA for distinctiveness, laying the groundwork for success. Additionally, understanding that a company can own multiple brands, each with distinct names and identities, can open new avenues for growth and consumer engagement.


How We Can Help

At Mortimer Legal, PLLC we specialize in trademark registration, enforcement, and maintenance. We can assist you in selecting a strong trademark, conducting a thorough search, and navigating the registration process. We are committed to protecting your brand and helping you achieve long-term success.

 

Contact us today to learn more about our services and how we can help you choose protect your business' most valuable asset... your BRAND.

 


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