"... I'd like to register my business name with the proper town
authorities as a sole proprietorship. To protect myself and my
business name from being copied and altered, do I have to
register any and all variations of the name? And is this done
separately or is it done under the one application?... Is this
what I need to do in order to stop anyone from using a variation
of my business name? And can my business name be
trademarked along with its variations?"
This question (an extract from an email I received from a new
subscriber during the week) is a good illustration of how confusing
the purpose of and difference between business names and
trademarks can be for small business and others without ready
access to an army of lawyers to lead them through the maze.
Add your domain name to the mix and it becomes as clear as
mud.
In this article, we'll look at what business names, trademarks
and domain names are (and aren't), what you can and need
to do to protect them and issues to think about when deciding
upon what to choose for your business and domain names and
whether trademark protection is appropriate (or even possible).
YOUR BUSINESS NAME
If you're going to conduct your business under a "fictitious"
name, i.e., one other than its legal name, you will need to register
the fictitious name with the appropriate government agency
in your state. This usually means your local county recorder's
office but, depending on where you live, it may mean your
state's Secretary of State Office. In countries other than the
U.S., the appropriate body may be some sort of government
Department of Small Business.
So what's your "legal" name? If you're conducting business
as a sole proprietorship, your legal name is your name, i.e.
Fred Smith. If you're any sort of other legal entity such as
a corporation, limited liability company, limited partnership
etc., the legal name of your business is the name of your
corporation, company, or limited partnership.
If you conduct business under your own name or that of
your corporation, limited liability company or limited
partnership, you do NOT need to register a fictitious business
name with the State because you are not conducting
business under a fictitious name, you are conducting it
under your business's legal name.
> Legal Purpose of a Fictitious Business Name
The reason you must register a fictitious business name
to operate a business under a name other than your
business's legal name is to protect the consuming public -
those members of the public who come in contact with your
business - as well as other parties such as suppliers.
The purpose of registration is so that those who deal with your
business can search for and identify the person(s) "behind" the
name. As a fictitious business name is not a legal entity, it
does not have contractual capacity (i.e. it cannot enter into
contracts in its own name). A consumer wanting to do business
with your business needs to be able to verify that the person with
whom he or she is contracting has authority to enter into the
contract as the business entity. By searching the fictitious
business names register, the consumer can find out who is
"behind" the business, as that is the party with whom he or she
will be contracting (and, sometimes, suing if the transaction
goes bad!).
Example: Alfreda Smith conducts her florist business under the
registered fictitious business name, "Blooming Right". Florist
Supplies, Inc. wants to enter into a contract with Blooming Right
to supply Blooming Right's stock of tulips. As Blooming Right
is not a legal entity and only a DBA ("doing business as", another
term for a fictitious business name), Blooming Right does not have
legal capacity to enter into the supply contract with Florist
Supplies, Inc.. (Florist Supplies, Inc., of course, being a
corporation - as evidenced by the "Inc." - is a legal entity, and
therefore has contractual capacity.) For this reason, Florist
Supplies, Inc. will only be prepared to contract with Alfreda Smith,
the legal entity behind Blooming Right. Florist Supplies, Inc.
identifies the legal entity with contractual capacity by searching
the fictitious business names register. Accordingly, the supply
contract finally entered into will be between Florist Supplies, Inc.
and Alfreda Smith, d/b/a Blooming Right.
You should also know that you won't be able to open a bank
account for your business unless and until your fictitious business
name is registered with the state.
Just because you've registered your business name in your county
doesn't mean that someone else can't register the same business
name in another county. Registration is only designed to allow
people who deal with your business to identify you as the person
behind that particular business. It doesn't give you exclusive use
of that name for all purposes in all areas. For this reason, if your
business name is also your business's "brand", you should also
register it as a trademark, if possible.
TRADEMARKS
As is evident from the purpose of registering a fictitious business
name, a business name is NOT a trademark and a registered
business name will generally NOT operate to protect the name
from use by others (except as an identical or deceptively similar
business name in the same county). So how do you protect your
business's "name" if it also identifies and distinguishes the source
of your goods or services from those of your competitors'? The
answer is federal trademark registration. (Although you can also
register trademarks at the state level, state registration confers only
limited benefits and should be considered only if federal registration
is not possible).
> What is a Trademark?
As suggested above, a trademark is either "a word, phrase,
symbol or design, or combination of words, phrases, symbols
or designs, which identifies and distinguishes the source of
the goods or services of one party from those of others."
(http://www.uspto.gov/web/offices ac/doc/basic/basicfacts.html)
A service mark is the same thing except it relates to the
source of a service rather than a product.
> Registration Not Required
A trademark (or service mark) does not need to be registered
to attain status as a mark i.e. unregistered trademarks are
recognized by the common law. If you have used a distinctive
trademark (that you own) in commerce, then you probably have
a common law trademark already.
But registration confers benefits not available if you rely only on
your common law trademark rights, such as the presumption that
you are the owner of the mark for the goods and services specified
in the registration and the entitlement to use the mark nationwide.
Absent federal registration, you would have to prove these things in
court as preliminary questions of fact. Imagine trying to satisfy a
court that you are entitled to exclusive nationwide use of the mark
if you've only been using the mark in two states. Other benefits of
federal registration include: (a) the fact that registration acts as
constructive notice of your claim to the mark; (b) federal court
jurisdiction can be invoked; and (c) registration can be used as a
basis for obtaining registration in other countries.
> What Can Be Trademarked?
It may be easier to answer this question by looking first at what
cannot be trademarked. The U.S. Patent and Trademark Office
(PTO) won't allow you to register a mark that is not distinctive
(discussed below); that is already in use or that contains names
of living persons without their consent; the United States flag;
other federal and local government insignia; name or likeness of
a deceased U.S. President without the widow's consent; words
or symbols that disparage living or deceased persons, institutions,
beliefs or national symbols and marks that are judged immoral,
deceptive or scandalous.
> Distinctiveness
As a general rule, a trademark must be distinctive in order
to be accepted for registration. This is an enormously complex
issue in trademark law and beyond the scope of this article.
But for our purposes, just keep in mind that a mark that is in
ordinary or common usage in the community will not be
capable of registration because no one person can be said
to be the "owner".
For example, let's say your business is selling still life paintings.
You would have trouble registering "Still Life" as a trademark
because it is a term in common usage and has a general meaning
in the community. (Note though that certain types of marks while
not distinctive YET may become so in the future, i.e. they are
capable of acquiring a secondary meaning. Such marks may be
eligible for registration and limited protection on the supplemental
trademark register. For more on this, consult your attorney.)
(On the other hand, you may well be able to register the name
Still Life as your fictitious business name provided the same or a
deceptively similar name is not already registered in your county.)
In order to maximize the chances of your trademark being
accepted for registration, therefore, try to come up with a
"coined" or "fanciful" name. The example often given by
trademark lawyers of a particularly successful coined name
is Kodak. It's a name that means nothing apart from its
association with cameras and now expanded lines of
products but is immediately identifiable by anyone who sees
it as a trademark of the Eastman Kodak company.
So, the more novel, unique and fanciful the name, the more
likely you will be able to register it federally.
DOMAIN NAMES
So, how does your domain name figure into all of this? In
particular, what is the interrelationship between registered
trademarks and domain names?
> Domain Names VS. Trademarks : David VS. Goliath
As a general rule, as the law presently stands, it is
possible to register any domain name that isn't already
taken without regard to whether that name is a trademark
owned by a third party. But do so at your peril. Courts are
increasingly siding with trademark owners against domain
name holders even when the domain name holder acquired
the domain name with perfectly innocent intentions, i.e. with
no intention of infringing on the trademark or holding it for
ransom (cybersquatting).
> Domain Names AS Trademarks
Let's say that the domain name you want to use is not
already a trademark. Can you register it as a trademark?
Depends. Maybe.
A distinctive, coined domain name may well be capable of
trademark registration for the reasons discussed above.
An example is my own domain, ahbbo.com. The word "ahbbo"
has no common, ordinary meaning and so would most likely be
capable of being registered as a federal trademark. If I tried to
register the trademark "A Home-Based Business Online"
I would have trouble even though I own that domain name
because the words are, in one variation or another, in
common, ordinary usage.
To be registrable, however, the domain name must act as
a source identifier for the product or service offered by the
business (simply because ANY trademark must identify and
distinguish the source of the product or service), and
not merely act as an address used to access a website.
SUMMING UP
Let's go back now and answer the original question:
"... I'd like to register my business name with the proper town
authorities as a sole proprietorship. To protect myself and my
business name from being copied and altered, do I have to
register any and all variations of the name? And is this done
separately or is it done under the one application?... Is this
what I need to do in order to stop anyone from using a variation
of my business name? And can my business name be
trademarked along with its variations?"
> "To protect myself and my business name from being
copied and altered, do I have to register any and all variations
of the name?"
No. The question misconceives the function and effect of a
fictitious busness name. The only function of the registered
business name is to allow the consuming public and others,
such as suppliers, to ascertain the legal entity behind the
fictitious business name. It is not the business's name that
requires protection from being copied and altered, it is the
business's trademark(s). If you are looking to establish a "brand"
with your business name, make sure the name is the same as
your trademarks and register your trademarks.
> "Do I have to register any and all variations of the name?"
This was asked in the context of the business name. For the
reason just given, the answer is no. But for the purposes of
our trademark analysis, let's reframe the question. Is it
necessary to register any and all variations of the trademark?
No. Once you have federal trademark protection for your mark,
the trademark examiner will (in theory, at least) not allow
anyone else to register a mark that is identical or deceptively
similar to your mark.
About the Author
Elena Fawkner works for a law firm practising in these areas.
If you would like professional assistance in connection with any of
the issues raised in this article (or small business issues generally),
contact Elena at mailto:elena@fawkner.com'subjectlegalhelp.