Over the years representing small business owners I’ve witnessed a lot of confusion about the names used by businesses. This is understandable given the terms flying around – fictitious name, domain name, trademark… So let’s take a moment to explain how these names differ from one another.
Business Entity Name
When we file an entity name with the department of state (for Florida: sunbiz.org), we are registering that entity to do business in that respective state. Limited liability companies can use LLC, L.L.C. and other variations to express that the company is a limited liability company. A corporation is commonly identified by having Inc. attached. There is also P.A. = professional association and LLP = limited liability partnership. This registered name is expected to be used, exactly as registered, in advertisements and business correspondence. For example, if someone registers “Joe’s Bar, LLC” as a business entity, the state of registration expects that business to list “Joe’s Bar, LLC” on business documents, marketing tools, etc. If Joe wishes to conduct business as “Joe’s Bar” without the LLC — or “Heidi’s Bar” or “Joe’s Jammin’ Java Bar” – he will need to file a fictitious name (or trade name) registration.
Filing a fictitious name registration in the state in which your business entity is registered permits you to use the fictitious name rather than the formally registered name of your business entity. The idea is that by registering a fictitious name someone can identify the true owner by looking up the fictitious name registration. You may have seen the phrase “doing business as” – such as “Joe’s Bar, LLC doing business as Joe’s Jammin Java Bar” – and now you know what that means. You will also see “dba” as shorthand for “doing business as”. What fictitious name registration does not do is grant you exclusive use or ownership of that name.
TIP: when you pick an entity name or a fictitious name you need to investigate whether using that name infringes on the trademark rights of another person or business. You don’t want to invest thousands of marketing dollars in a name only to receive a “cease and desist” letter from a law firm telling you that you must stop using the name or face a lawsuit.
A domain name is the .com or .net or .org or other web address for people to find your website online. When you’re selecting a name for your business one of the first things you should do is see if the domain name is available. You don’t want people to be looking for you and come upon a competitor instead because that competitor has the domain name that is closest to your company’s name! Owning a domain name does not give you trademark rights, in case you were wondering if it was that simple.
As described by the United States Patent & Trademark office, a trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others. A classic example is McDonalds and its design mark – the golden arches. A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product.
Just by using a name in commerce (i.e. selling goods or services) you can obtain what are referred to as common law rights to that name in the geographical area in which you’re operating your business. You can use the symbol ™ next to your business’ name to help express that you’re laying claim to that name. For example, “Joe’s Jammin’ Java Bar™”. You cannot, however, use the symbol ® unless you have obtained a federally registered trademark which is more of an investment of time and money.
Although it’s not required that you register a trademark with the United States Patent and Trademark Office, it has its advantages. The benefits of registering a federal trademark include:
There are also opportunities to register trademarks in the state in which you’re offering goods or services but the rights and protections fall short of what is gained by obtaining a federal registered trademark.
If a trade name is similar enough to another business’ trademark so that it creates a “likelihood of confusion” in the mind of a purchaser, it may be infringing on that trademark. In this case, the trademark owner can file suit against the allegedly infringing user of the name and a court will decide whether in fact there has been an infringement and award an injunction and even money damages.
The name of your business is one of the most important decisions and investments you will make as a business owner. It is the foundation of your brand after all. These concepts, especially trademarks, are not easy to grasp fully; let an experienced attorney help you make the right choice and protect your investment over time.