Are you the proud owner of a creative business endeavour or an entrepreneur with dreams of making it big? Have you, as a brand owner, ever wondered when brand protection begins? Rest assured, investing in trademark protection for your brand is an important step for any online entrepreneur or business startup. Protecting your unique identity helps set yourself apart from competitors and builds trust within the marketplace. Plus, keeping track of this legal process might be easier than you think!
The common route down this path is to either opt for a trademark or an LLC. If you’re wondering about the difference between the two, then we have got you covered. Both trademark and LLC are important ways of keeping your brand protected from infringers however they have different roles. So if you’re wondering about the difference between both and also asking yourself which protection you should opt for first, this blog will answer those questions.
What is a Trademark?
A trademark is any symbol, logo, word, phrase, slogan, sound, or scent which has been registered as per the intellectual property laws. In the U.S., registration is acquired by filing a trademark application with the United States Patent and Trademark Office (USPTO). Once a trademark is registered, it enjoys all the privileges and protection granted by the IP law against theft. No other brand will be able to use it and if they do – even if the mark has some similarity to your mark – they will be liable for trademark infringement.
Common Law Trademarks
Brand protection always begins with a trademark owner establishing their common law trademark rights. A common law trademark exists when a brand owner begins to use the trademark in commerce in a particular geographic area. A mark is said to be “used in commerce” when there is intent by the owner to use the mark in the ordinary course of trade.
A brand owner can use “TM” as a superscript next to their mark to declare their common law rights. Although there are limitations in the protection for marks that only carry common law trademark rights. For one, common law rights associated with the mark only exist in the mark’s geographic area of use.
So, it is likely that a business with:
- Similar/identical name/logo,
- No common ownership,
- Different geographic areas of use, and
- no trademark registrations (state/federal)
can exist without impeding each other’s common law trademark rights.
Those limited rights could be at risk if a prior user with a similar/identical mark can claim common law rights. It is always beneficial to consult a trademark attorney who can conduct a preliminary or even a comprehensive search to avoid the risk of future rebranding or paying potential damages. In addition to conducting a clearance search, a trademark attorney can assist with monitoring services to police competitors or new entrants trying to take advantage of a brand owner’s goodwill.
State & Federal Trademark Registrations
State trademark offices are often a cheaper and faster option for small businesses or startups. But protection for the brand owner is limited to the applied-for state alone. Almost every industry today has a digital footprint. Limiting a brand’s protection to a state would be brand development malpractice. Without proper protection, as a brand owner, you are allowing competitors in different jurisdictions to co-opt and build off your brand’s success. Federal trademark protection begins the day your application is approved. Although applying alone provides you with certain rights against competitors. A federally registered trademark comes with the following benefits:
- Nationwide protection,
- Public notice to competitors regarding your trademark’s use,
- Complete ownership over your brand,
- Lucrative licensing contracts,
- Ability to police your brand nationally and through US Customs & Border Protection,
- Use of the (R) symbol,
- and much more.
What is an LLC?
LLC stands for limited liability company. It is a hybrid form of business structure which combines the traits of a sole proprietorship and a corporation. LLC provides legal protection to small businesses and start-ups for their financial assets by granting personal liability protection, taxation privileges, and minimum legal formalities.
Are Trademarks and LLCs the same?
Trademark registrations protect brands (name/logo) associated with goods/or services mentioned in the application. LLCs are business structures that provide owners with protection from personal financial liability. It is essential to have a proper business structure and adequate brand protection. Still, the two require different processes involving different government agencies.
Should I get a Trademark or LLC first?
Ideally, you should opt for an LLC before you apply for a trademark since registering your trademark merely would not grant you limited liability protection. Furthermore, if you plan for your LLC to own the trademark, then you need to have that first as your LLC needs to exist first to register a trademark. Once your LLC application is approved, your enterprise’s name is protected by the state. However, none of this undermines the importance of having a federal trademark registration. No other business will be able to establish their enterprise with the same name as your LLC in the residing state however this guarantee is not extended to the rest of the states. The only way to protect your brand nationwide is through federal registration.
It is important to note that the trademark application process is more time-consuming than LLC registration hence it is advisable to immediately apply to the USPTO after you have acquired the LLC status for your brand.
Conclusion
While it may seem like an unnecessary expense to some, working with a professional trademark attorney to secure federal trademark registration for your brand is worth the investment. Without proper protection, you risk having another business use your unique brand name or logo and diluting the value of your hard-earned brand. If you have questions regarding your trademark portfolio or would like to learn more about how we can help you realize your vision, please schedule a discovery call. We look forward to talking with you soon.
Make sure your trademark portfolio gets the attention it deserves. With Drishti Law, you can book an appointment to explore if our team can provide adequate legal advice to help make your vision a reality. You can contact me by scheduling a discovery call and we’ll be happy to answer all those questions that have been on your mind. During this call, we can discuss your needs in more detail and develop a tailored plan.
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Sahil Malhotra
Sahil Malhotra is an Intellectual Property Attorney, who founded Drishti (“vision”) law because of his vision in protecting dreams and ideas.
He provided individuals and small businesses with an opportunity to enhance their IP’s value by helping them register trademarks and successfully argue against office actions. In addition to his training and experience, he has been deeply involved in the multifaceted IP portfolio at UIC and continues to be associated with IP organizations and conferences.
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