Since trademarks are inherently associated with brand identity and brand value, it is not surprising that a lot of people, laymen and businessmen included, think it is the same as a business name. Also interchangeably known as ‘trade names’, business names have often been misunderstood as granting complete legal protection to all trade-related aspects of the company, including the said business name and/or logo, sign, symbol or any other feature the company might be using as a trademark to sell their products/services without getting the same registered.
Let us walk through the key differences between the two terms, both in meaning and purpose.
A business/trade/company name is simply a name or a way to help identify a business, an entity or an individual. It is the official name under which the said entity or individual chooses to do business (be it a company, LLP, partnership or sole proprietorship). Business registration is necessary to first establish the identity of the said business/company as a separate legal entity that will then allow the company to enter into contracts, conduct sales, advertise, get into partnerships, file tax returns and perform a variety of other business activities.
Commonly known as “Doing Business As” (DBA) or a “Fictitious Name” or an assumed name, a trade name is granted protection by the state within the confines of the state alone, and its registration does not prevent the use of the same or similar business name in a different state, more so if such usage occurs with respect to a different field or industry.
So let us assume your company has been registered as Kurzon Technology Private Limited, in that case, Kurzon Technology LLP cannot be registered. Kurzon Technology though can still be used as a brand name for software and used elsewhere. For that matter, Kurzon Cars Private Limited too may be used as a business name since it pertains to a different industry and works towards a different purpose.
As an appropriate global example, we have Nike Inc., dealing in the design, manufacture and marketing of footwear, apparel, and accessories, whereas Nike Hydraulics is engaged in the selling of high-pressure hydraulic equipment such as hydraulic pumps and cylinders, etc. There is no likelihood of confusion since they both operate in completely disparate industries.
Hence, as long as the fields of operation and purpose are different, you can still safely register your business name. If however, your company is found actively infringing an existing company’s trademark rights by using the trademarked name/word as a business name, you may be dragged into legal disputes regarding the same.
A case in point is that of Google facing trademark infringement claims over the name of its parent company “Alphabet” which incidentally, is the same as BMW’s subsidiary Alphabet, dealing in the provision of services to corporations with vehicle fleets and operating in no less than 18 countries.
The Companies Act, 2013 that looks into company registrations in India mandates that a company name should not be identical to a registered trademark. Similar laws lie across global borders and therefore, it is extremely necessary to conduct a thorough search before coming up with a business/trade name so you don’t waste precious time in legal entanglements later.
A trademark is a word, phrase, logo, symbol, design, colour or a combination of one or more of these elements that distinguish one company’s products/services from that of another. It is essential to aid the consumer in identifying the actual source of such goods/services and protecting the brand name goodwill associated with the same. Examples being, Nike’s Swoosh symbol and Coke’s “Coca-Cola” which are distinct trademarks.
If the business name is the “who” part of your commercial identity that you project to the outside world, the trademark is the “what” part of the identity that complements and completes the former part. Trademark is that intangible property you have exclusive rights over that can protect your brand identity by “legally establishing that your mark is not already being used, and provides government protection from any liability or infringement issues that may arise” as per the U.S. Small Business Administration.
Since trademark registration offers a bundle of legal rights and privileges granted at the national level (and sometimes, on an international scale too) with respect to a certain class of goods/services, the coverage of the protection is holistic and can also secure your brand’s goodwill and reputation globally.
As a protectionist measure, you can stop other businesses from using the same or similar trademark for their products through injunctions, seek damages for trademark infringement and resort to a host of other legal deterrents, provided your trademark is registered and has been in continuous use. More points in your favour if the mark is extremely well-known and has already created a distinct image in the eyes of the public.
Additionally, with a strong and distinct registered trademark, you can even branch out to other services that fall in line with your commercial vision- like how Disney went on to aggressively exploit its most famous Mickey Mouse trademark in television, films, comic strips, merchandise stuff, video games, its Disney parks and more.
The pecuniary benefits in operating under a business name for long though, are limited.
What happens when you simply opt for business name registration?
Now, think of this. If you have registered “Blossom” as just a business name and not as a trademark, any company, LLP or other business entity can launch a product by the same name and cash in on the brand value and goodwill your company “Blossom” may have acquired till date.
You can certainly resort to an action in passing off (since you have not registered your trademark) to counter such a situation, however, it will be considerably harder for you as a plaintiff, to not only establish deceptive similarity between the two things but also require you to prove deception or confusion among the public and possibility of your goodwill being hampered due to the defendant’s actions. Also, a suit instituted in this regard has lesser chances of being awarded damages.
What you can do to protect your business/trade name
The best recourse would be to register your trade name as a trademark to fend off any possible future infringement of the same by competitors in the market.
Some examples are; trade names “Kodak” and “McDonald’s” federally registered as trademarks and belonging to the Eastman Kodak Company and McDonald’s Corporation respectively.
Note that you ought to do so only if you intend to use the business name in commerce as a trademark to advertise/promote/differentiate a certain class of goods/services against goods and services of other business entities, be it in the same or different industry. You can find out more about the trademark registration process as well as other related particulars here and here.
Depending on how long you have used the name on all connected goods/services, you can apply to register your trade name as trademark either under the “use in commerce” or “an intent-to-use” basis.
In today’s hyper-competitive economic scenario where hundreds of small and big players are coming into the business scene every day and can challenge your brand, it is best to register both your company name as well as your trademark so you are in safe grounds when it comes to possible legal, reputational and economic implications.