by Brenda L. Speer
The names used in conjunction with your business can be confusing not only for you, but also sometimes for legal practitioners. There are three types of names that companies commonly use in association with their businesses. As defined from a legal perspective they are:
Entity Name: The formal name by which your entity (be it a corporation, limited liability company, limited partnership, etc.) is registered with the Secretary of State’s office of the appropriate state of entity formation;
Trade Name: The name under which your entity does business, which name is other than your entity name, the purpose of a trade name being to allow third parties to trace back to the true entity in case of the need to find out the names and addresses of owners, officers, directors, partners, etc., or to bring suit against the entity; and
Trademark: A trademark indicates the source or origin of your particular goods or services to the consuming public. The term “trademark” encompasses both trademarks (marks used with goods) and service marks (marks used with services).
All three of these name types should be registered with the Secretary of State. These names may or may not be all the same. A real life example in which the names are all the same: IBM, Inc. (entity name), doing business as IBM (trade name), selling IBM® brand computers (trademark). In contrast, a real life example in which the names are not all the same: The Proctor & Gamble Company (entity name), doing business as P&G (trade name), selling Bounty® brand paper towels (trademark).
You should review your business records to ensure that you have done all of these registrations. As of June 1, 2006, in Colorado all trade names are registered with the Secretary of State. In the past, only sole proprietors or general partnerships did not register with the Colorado Secretary of State, but rather, they registered with the Colorado Department of Revenue. All of the previous registrations done with the Colorado Department of Revenue have been transferred to the Colorado Secretary of State and now all trade names are searchable and registerable with this one government agency.
An entity name registration does not automatically grant to you the exclusive right to do business throughout the state of formation and registration under your entity name. The reason is that the legal reach of a trademark can supersede that of an entity name. Trademark rights allow the senior (or first) user of the trademark to use the trademark in connection with the owner’s particular goods or services to the exclusion of others in the marketplace. An entity name registration does not necessarily do that.
The distinction is one of fact: that is, what is the manner in which you use your entity name? If it is used in the manner of a trademark, which is to identify your goods and services to the consuming public, then your entity name has also taken on trademark rights. Trademark rights accrue through actual usage of your mark in connection with your particular goods and services. This is known as common law trademark usage and your rights will extend throughout the geographic territory in which you can prove you are using the mark. However, a state trademark registration grants to the trademark owner the same rights, yet the registration carries with it an evidentiary presumption that the trademark rights extend throughout the state of registration. The same holds true for a federal or United States trademark registration; however, the evidentiary presumption extends throughout the United States and its territories.
The level of scrutiny accorded entity name, trade name and trademark registrations by the Secretary of State’s office (whether Colorado or elsewhere) is minimal. All the Secretary of State looks for is to see if someone has already registered the exact same name. No assessment is made with regard to similar names or marks that may be confusing to the public. If you are starting a new business or product or service offering, then it is in your best interest before launching to avoid possible confusion and trademark infringement by doing a nationwide entity name and/or trademark availability search.
Accordingly, it is to the benefit of your entity that you have all appropriate filings completed for entity name, trade name and trademark (and federal, if appropriate) registrations with the Colorado Secretary of State’s office so that you may best protect and maintain your name to your exclusive use. Goodwill and consumer recognition attach to the name by which you hold your business out to the marketplace and the value of such to a successful business should not be underrated.
© 2008 BL Speer & Associates