You may have heard similar-sounding terms ‘trade name’ and ‘trademark’ and probably thought that they have the same meanings. It’s important as an entrepreneur to know the difference between the two because these terms are two different things entirely. How are they different from each other?

Learn all about trade names and trademarks and what makes them different by reading this short article.

An Overview of Trade Names and Trademarks

The process of selecting and registering trade names and trademarks is an important part of establishing your brand’s presence in the market. This helps people recognize your products and services which helps grow your business. You should carefully consider all the steps involved in both processes. While they sound so similar, legally they’re two different things. A trade name is a company’s official name while a trademark provides the legal protection needed to protect a company’s brand

Things To Take Note Of:

  • From a legal perspective, trademarks are different from trade names
  • A trade name is a company or an individual’s official name
  • A trademark protects branding elements such as a brand name, logo, or tagline that may be associated with a trade name

Trade Name

A trade name is an official name chosen by a sole proprietor or a company to do business as (DBA). It is a legally important process that leans more towards administrative and accounting purposes like filing tax returns with the Internal Revenue Service (IRS) apart from your personal income tax returns.

Filing for a trade name makes tax collection agencies aware of your business and not to protect the name you register. In many states, a registered trade name doesn’t prevent other business owners from operating using the same name you have registered. So you will see lots of similar trade names with different owners in different cities—all in the same state. Now, this is where the importance of trademarks comes into play. If you want to stand out, you have to make sure that your brand can’t be used by others as trade names will not provide that kind of legal protection. They are two separate processes.

Trademark

A trademark is a process identified with setting your business apart from others. This helps your business stand out so you can make more profit. Your trademark can part of or associated with your registered trade name. You may register your brand name, logo, or taglines and it is theoretically the only form of intellectual property that can last forever. It is easy to spot trademarks, you just have to look for the trademark symbol ™ or the registered symbol ®. The difference between the two is that ® means that it is legally registered while the ™ is just a form of staking their claim over their chosen name but they haven’t registered or are still waiting for their marks to be approved by the USPTO.

Registration for trademarks is done on a federal level, unlike trade names which are only at the state level. Getting a registration certificate means that the government recognizes that no other business is using your trademark and that other businesses can’t use your mark for the same class of products and services you filed your mark under. It provides you protection from IP theft and infringement. When filing for a trademark, you have an option to do it yourself by self-representation or choose an attorney of record or a trademarking company to process your application for you.