Trademark a business name

[Tax Sleuth]

Do you think it is a good idea for the owner of a small company to obtain a trademark to protect their fictitious business name nationally or is it not worth the time and money involved? Doesn't registering a fictitious business name in a particular state for entity formation purposes, such as registering the name of a corporation, usually protect the business name from being used by a competitor at least in that specific state assuming no one else has a claim to it?

[Koss]

Name Registration

It is unwise, and dangerous, to make any generalizations on this issue. It varies significantly from state to state. To make matters worse, federal trademark law also applies.

In Ohio, the Secretary of State recognizes three different types of registration:

(i) fictitious name
(ii) trade name
(iii) trademark and service mark

A fictitious name offers no protection at all. The other two offer different types of protection. And none of them are the same as registering the name of the original business entity, i.e., the formation of a corporation or LLC. And none of them offer the degree of protection that comes with registration through the US Patent and Trademark Office.

I would agree that some small business owners may reasonably decide to just wing it, do nothing, and keep their fingers crossed. But for a business that is growing, or considering expanding into another state, or in any case where it appears that another business might be using a similar name that is causing confusion, they really need to talk to an attorney before they do anything at all.

I am familiar with one rather disturbing case here in Ohio, involving an LLC called Brown Bag Massage.

Brown Bag Massage was a professional therapeutic massage clinic. It was not a "massage parlor." Without an attorney, the owner attempted to trademark the name Brown Bag Massage by filing an application with the US Patent and Trademark Office.

Another company, located in a different state, opposed the application, on the grounds that it would cause confusion. The other company was Brown Bag Party. The company was doing business nationwide, selling sex toys and other adult products, through "parties" held by independent contractors in private homes, in a business model similar to Avon and Mary Kay.

Brown Bag Party had lawyers; Brown Bag Massage did not. Brown Bag Party won the case, and Brown Bag Massage was forced to change its name.

If Brown Bag Massage had not attempted to trademark their name, they never would have come up on anyone's radar. Brown Bag Party only took action in response to the trademark application. They were not actively looking for other businesses using similar names. They became aware of the trademark application filed by Brown Bag Massage because they had already trademarked the name Brown Bag Party. The Trademark and Patent office notified them that someone had filed an application to trademark a similar name.

Ironically, Brown Bag Party went out of business a few years later.

Brown Bag Massage is still in business, with their new name: In the Bag Massage.

Brown Bag Massage probably spent more money changing their name (marketing material, website, signage, etc.) than they would have spent on an attorney.

Bottom line: This isn't for amateurs.

BMK

[taxxcpa]

In Texas you can register an assumed name with the county at a fairly low cost. In my opinion, a small business should not spend a lot of money protecting the business name, and I would not consider anything more than registering with the county, and I would probably only do that if I wanted to open a bank account in that name rather than my own name.

[ChEAr$]

I finally figured out years ago that by incorporating, the name I use enjoys some measure of protection.
But then I'm not a lawyer.
THank GAWD!

[ToledoEd]

We are a single office tax preparation firm in Ohio, incorporated in Ohio as a S-Corp. After being in business for about 5 years we get a letter from a South Dakota tax prep firm's lawyer to change our name because it was close that companies name there in South Dakota. Our lawyer got that dismissed because we were not in the same state and the name was different.