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.

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.

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.

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.

Frequently Asked Questions

  • Do I have to register a trade name and a trademark?

It is a legal requirement to register your company within the state where you will conduct business. Doing so ensures that you're in the appropriate category for taxes and operating legally to provide goods and/or services.

It is not a legal requirement to register a trademark. You can use a mark without registering it under common law trademark rights unless you're using a mark that infringes on another trademark.

  • Does registering my company's trade name restrict others from using it?

Registering a trade name with the state business office does not restrict other companies from using it. Some states allow businesses with identical names to operate. If you want to protect your company's name, you'll need to file an application for a trademark.

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.

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, Stripe, and Twilio.