Key Takeaways

  • A trade name is the official business name registered with a state for legal and tax purposes, while a trademark legally protects a brand identifier such as a logo, slogan, or product name.
  • The difference between trade name and trademark lies in scope: trade names identify the company itself, while trademarks protect how products or services are recognized in the marketplace.
  • Trade name registration does not automatically grant exclusive rights or prevent others from using a similar name, but a trademark provides stronger nationwide protection under federal law.
  • Many businesses register both: the trade name for state-level business recognition, and the trademark for brand and intellectual property protection.
  • Common mistakes include assuming that registering a trade name provides trademark protection, or failing to perform clearance searches before registering.
  • Legal risks of skipping trademark registration include consumer confusion, infringement claims, and loss of rights to a brand name.

What is Trademark vs. Trade Name?

A trademark offers legal protection for a symbol, logo, slogan, phrase, word, design, or other element that associates products or services with your business. A trade name is your company's official name under which it does business. Other terms for trade name include "doing business name", "fictitious name", or "assumed name."

Registering your company's trade name is much simpler than registering for a trademark but doesn't offer the same legal protection. It only serves as the official name of your company.

When you receive approval on a trademark application, you hold several legal rights. You are the only one allowed to use, copy, profit from, and distribute the approved mark. This could include a variety of items, from a simple logo to the slogan used on all of your materials. Your business name might also be included in the mark that now has that legal protection.

Upon approval of a registered trademark, no other company can use the mark. This process also establishes your ownership of the mark as a unique and protected element of your business. If any other person or company tries to use something similar, you have the right to take legal action.

Trademarks exist to protect consumers and prevent confusion in the marketplace. When someone wants to purchase something from a certain manufacturer, he or she should be able to clearly see who made the item or offered the service. Without a clear and protected mark on the packaging or advertising, that customer won't know from where it came. This leads to confusion and decreases the chance to gain brand loyalty.

Filing a trademark application is not the same as registering your company's trade name. You must register the business name with the state in which you do business. If your company participates in interstate commerce, you'll need to file in each state.  

The purpose of a trade name is for state officials to know what companies are operating within the state's borders. This is generally for tax purposes, although it's also useful to keep track of companies that offer goods or services in each state.

However, legal protection on trade names varies amonn states. In general, registering a trade name does not give you unlimited rights to exclusively use that name. Some examples of specific language include:

  • "A trade name provides notice that you are using that trade name, but does not prevent anyone else from using the same name." (Colorado)
  • "Registering your trade name does not protect the name from use by others." (Washington)

Other states allow legal action if another state uses the same business name you have already registered. It becomes more complicated because trade names don't hold the same legal weight as trademarks.

You may even find states that restrict trade name registration based on similarity. For example, if you opened a floral shop called "Mindy's Flowers" and someone else filed a registration for "Mindi's Flowers," the second registration might be invalid. While the spellings are different, similarity causes confusion and many states are trying to prevent that for its consumers.

Because the restrictions vary from state to state, simply registering a trade name is not enough to protect your company.

Key Legal Distinctions Between Trade Names and Trademarks

Although the terms are often used interchangeably, the law treats trade names and trademarks very differently. A trade name is primarily an administrative tool, used to identify a company for purposes such as taxation, licensing, and contracts. A trademark, by contrast, is a form of intellectual property that exists to prevent consumer confusion and safeguard brand identity in commerce.

For example:

  • Registering “Smith & Co. LLC” as a trade name only means the company is recognized by the state as a legal entity.
  • Registering “Smith®” as a trademark with the USPTO gives the company nationwide rights to prevent others from selling competing products under a confusingly similar brand.

Understanding this difference between trade name and trademark ensures that a business is both legally recognized and fully protected in the marketplace.

Why is Trademark vs. Trade Name Important?

A trademark protects the intellectual property of a business. This might include logos, symbols, words, phrases, slogans, or other designs that help customers identify your company. When consumers look for products, they often rely on the trademarks to find the items they want.

Without a recognizable symbol, mark, slogan, word, logo, or other design, all products might look similar. There would be no way to maintain brand awareness or loyalty. Customers could end up with poor quality products, causing frustration.

A trade name is important because it connects your company to members of the public. You'll use your trade name for filing taxes, issuing pay to employees, setting up websites and other online presences, advertising, and product packaging.

You need to register your company's trade name with the state business office as soon as you can. When you do so, your company will gain recognition as a legal entity, authorized to sell products or services in the state. The registration process also makes it legal for your company to enter into contracts and participate in other legal forms of business.

You can review the Lanham Act, a federal act that details trademark laws, to understand the differences between trademarks and trade names on a federal level. But trade names are generally handled at the state level, so individual states have different guidelines and practices. When companies operate across state lines, trademarks and trade names become more confusing. It's best to hire a trademark lawyer who can review all requirements within the Lanham Act as well as state-issued requirements for trademark and trade name filing.

How Trade Names and Trademarks Work Together

In practice, trade names and trademarks complement one another. A trade name is necessary to establish the company as a legal entity within a state, while a trademark builds brand recognition and creates consumer trust. Many businesses operate under one legal trade name but use multiple trademarks for different product lines.

For instance, a corporation called “Beverage Innovations, Inc.” (trade name) might sell products under the marks “PureSplash®” and “EnergyMax®.” In this case, the trade name anchors the company legally, while the trademarks function as the recognizable brands in commerce.

Reasons to Consider Using Trademark vs. Trade Name

Before filling out any paperwork, it's important to completely understand the differences between trademarks and trade names. For most companies, the first step in setting up shop is registering the trade name. This process puts your business on the state's register, ensuring proper tax status and legal rights to operate.

But filing a trade name doesn't guarantee that you'll get approval for the associated trademarks. Before you get too far in the process, review the trademark registry to make sure that something similar doesn't already exist. Because the United States Patent and Trademark Office (USPTO) operates on a federal level, you're up against trademarks in all other states.

If you want to fully protect your business name along with any marks associated with it, you'll need to register both the trademark and the trade name.

Benefits of Registering Both

Registering both a trade name and a trademark often provides the most complete protection. Doing so helps you:

  • Comply with state business requirements through trade name registration.
  • Protect your brand assets nationally with a trademark.
  • Reduce consumer confusion by ensuring your products and services are uniquely identified.
  • Create stronger business value since trademarks are often treated as valuable intellectual property during mergers, acquisitions, or licensing agreements.

Investors, partners, and lenders may look more favorably on businesses that have protected both their legal entity and their brand.

Reasons to Consider Not Using Trademark vs. Trade Name

You cannot legally run a business in a state without registering it, but you don't have to register a trademark. Not registering a trademark with the USPTO does come with some risk.

If you're using an unregistered mark, you can add the TM or SM symbol to it. TM stands for trademark and SM stands for service mark. You'd use TM if your business sells products or goods or SM if your business provides services. These symbols don't hold any legal weight, but serve as a claim on the mark. You're alerting competitors that you plan to use the mark to represent your business.

Using the mark also gives you common law trademark rights. These rights protect the intellectual property, but less extensively than a registered trademark does.

If your unregistered mark infringes on a registered mark, you no longer have the common law rights. It is practically impossible to prove that you used a mark before someone else, especially if that person or company has an approved trademark application.

What Could Happen When You Don't Register a Trademark vs. a Trade Name?

If you only register your trade name, you won't have the same legal protection against another company using your mark or even your company name. For example, say you opened a business called PROTEX, LLC. The first step is registering the company name in the state where you do business. But doing so doesn't mean that another company can't launch a product called PROTEX or call themselves PROTEX, LLC.

If the other company registers for a trademark of the business name before you file an application, you could lose the opportunity to trademark it. Continuing to produce materials or products with the name, PROTEX, LLC, could actually infringe on the other trademark.

When starting a business, it's important to file the application to register the trade name and to trademark anything that you want to keep as your own. 

Common Mistakes

The most common mistake that relates to trademark vs. trade name is assuming that filing for one satisfies the need to file for the other. These two registrations operate under different business entities. Trade name filing occurs at a state level, while most companies trademark on a national level.

Additionally, registering your company's trade name doesn't restrict others from using the same name. Little to no legal protection comes from registering a trade name. Its purpose is to allow the state to track its businesses and taxes.

Misconceptions About Trade Names and Trademarks

Some of the most common misconceptions include:

  • Assuming a trade name equals a trademark. A state-registered trade name does not automatically protect your brand from competitors.
  • Believing use alone guarantees protection. While common law rights exist for unregistered marks, they are far weaker and harder to enforce than federal registration.
  • Failing to check availability. Businesses sometimes skip thorough clearance searches, leading to conflicts with existing marks.
  • Overlooking state vs. federal differences. Trade names are governed by state rules, while trademarks may be registered at both the state and federal level, with federal protection offering broader rights.

Steps to File

Filing for a Trade Name

  • Search existing trade names on the business website of the state where you plan to do business. While you may not be denied a similar trade name, it could cause customer confusion.
  • File the business license application and pay associated fees. Most states have the application available online, or you can print and file the application in person.

Filing for a Trademark

  • Search existing trademarks to make sure something similar isn't already registered. If it is, your application will likely get denied.
  • Once you determine that no mark exists that is too similar to yours, fill out and submit the application through the USPTO. Include images or text in the format that you plan to use. If you're trademarking a logo or other design, submit multiple applications for color and black-and-white versions. A single trademark application only covers the exact version listed in the form.
  • Track your application status through the Trademark Status & Document Retrieval System. The application appears for tracking within 14 days of submission.
  • After you receive approval on your trademark (typically within 6-16 months), you can start using the registered symbol on your mark. You also now have legal rights to use, copy, produce, and profit from the mark.

Many businesses choose to register both the trade name and the trademark to offer the best legal protection from infringement and avoid confusion.

Frequently Asked Questions

  1. What is the main difference between a trade name and a trademark?
    A trade name identifies the business as a legal entity at the state level, while a trademark protects brand identifiers like names, logos, and slogans used in commerce.
  2. Can I use my trade name as a trademark?
    Yes, but you must register it separately with the USPTO if you want trademark protection. A trade name registration alone does not provide exclusive branding rights.
  3. Do I need both a trade name and a trademark?
    In most cases, yes. A trade name is needed for legal and tax purposes, while a trademark protects your brand nationally and prevents consumer confusion.
  4. What happens if I don’t register a trademark?
    You may still have limited common law rights, but without federal registration, your brand will be more vulnerable to infringement and harder to defend.
  5. Can two businesses have the same trade name?
    Yes, in some states multiple businesses can operate with identical or similar trade names. However, if one has a registered trademark, that business has stronger rights to prevent confusion in the marketplace.

If you need help with the differences between a trademark vs. a trade name, you can post your question or concern on UpCounsel's marketplace. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.