So you quit the day job, took out loans, corralled investors, worked day and night to create a vision and bring it to life, and now you have achieved the dream: you’ve built a growing business on your own terms. But have you taken the steps to trademark your business name? Every year, entrepreneurs and visionaries create incredible businesses only to watch someone walk away with value that should be theirs through failure to timely seek and obtain trademark protection for their business name. If you have not trademarked your business name, the time is now to take action to protect your brand and help it continue to grow.
Registering Your Business With the State Does Not Provide Trademark Protection
Many startup founders mistakenly think that registering their company with the state as an LLC or other business entity provides them with intellectual property (IP) protection for their business name. This misunderstanding is often due to the fact that state authorities will check to see if your business name is the same or similar to those already operating in the state. But this process does nothing to give your business trademark protection for its name from competitor businesses, especially those operating in other states.
A “Common Law Trademark” Provides Very Limited Protection
You may have also heard that simply operating your business for some period of time without registering a trademark will nevertheless grant you trademark protection against competitors. There is some truth to this, but the protection this so-called “common law trademark” is very limited. While use of a company name in a given geographical region can provide protection from other companies entering that same region and using the name, it will not provide protection outside that region. For example, if you open up three “Esther’s Cupcakes” locations across Queens that do quite well, then a competitor may not be able to come into Queens and open up his own “Esther’s Cupcakes,” but that competitor could open up shops with that same business name pretty much anywhere else if you have not registered a federal trademark for the name.
Competitors Will Be Monitoring Your Trademark Status…
Because businesses operating without registered trademark protection are vulnerable to competitors swooping in and seizing on your great idea and business name and opening up shop with your name elsewhere in the country, you can better believe that that is just what they will do. If you took a huge gamble on opening a laundromat/yoga-studio called “LaundroYogaMat” and it turned into a smashing success but you failed to trademark the business name, don’t be surprised if a slew of LaundroYogaMat knock-offs pop up elsewhere, making money that should have been yours.
…As Will Potential Investors
For this very reason, investors who are considering putting money into your business or even in purchasing your business for their own portfolio will also be looking to see whether you have properly protected your IP through registering the appropriate trademarks. If you have not, then your value as a business could be drastically diminished if there is nothing to prevent others from taking the ideas for free that you are now trying to sell at a premium to investors. After all, why would investors pay big bucks if they can simply take your untrademarked business name and run with it?
Set Yourself Up For Trademark Success
Registering for a trademark is generally not an overly complicated process, but trademark examiners will need to approve your trademark application based on a number of criteria. The process does take time (generally 6 months or more), and, if it is not done correctly, you may have to start over. Obviously, losing 6 months to a year in this fast-paced economy can mean the difference between success and bankruptcy. By working with an experienced trademark attorney, you can maximize your chances of successfully obtaining a trademark in a timely manner.
At The Gouchev Law Firm in New York, we work with businesses of all sizes, including start-ups across New York City and New Jersey, in obtaining the IP protection they need to thrive in today’s economic environment. Call us at (212) 537-9209 or schedule a free strategy session today to see what The Gouchev Law Firm can do for your business.