Should You Trademark Your Home-Based Business? What Happens If You Don’t?
Has the pandemic forced you to make changes in your career trajectory or small business plans? Whether these changes were voluntary or forced, a number of entrepreneurs have taken the opportunity to create a home business to meet the needs and demands of the current market and economy. Now it’s time to weigh in on your options and think about protecting your home-based business and the brand with a trademark.
Does Your Business Need a Trademark?
According to the U.S. Small Business Administration, half of the 30.2 million small businesses in the United States are home-based businesses. This number has stayed consistent in the past decade; however, there has been a steady increase in business formation filings since the pandemic started in 2020. A recent U.S. Census Bureau report released in February 2021 continues to show this upward trend of new business formations jumping by 42.6 percent compared to application filings in December 2020. In all, the first few months of 2021 logged in an overall increase of 492,133 new applications, showing that many entrepreneurs are taking a chance at starting a small business. If the report from the SBA stays consistent, it can safely be assumed that many of these businesses are home-based.
If you’re joining the ranks of small business owners, it may be to your advantage to protect your brand by applying for a small business trademark. Having a trademark can help highlight your company’s reliability, legitimacy and trustworthiness when it comes to its offered goods or services. A trademark can add value to your business and even bring in potential offers to cash out or expand through franchising opportunities.
That said, there are also several factors to consider that may keep business owners from applying for a trademark, especially in the face of a challenging economic environment, lack of market clarity and the expense and time involved in pursuing a trademark.
Let’s take a look at some of the pros and cons of having a trademark for your home-based business.
Benefits of Having a Trademark
- A trademark offers brand protection. This keeps others from using the same company or product name, logo design, slogan or tagline.
- A trademark adds value to your business. A successfully trademarked business can also attract potential buyers if you want to sell your business down the line.
- It gives your business a professional look and can add validity to your service or product offerings. This can help boost your business’s reputation and helps identify your product or service and what a business stands for.
- Having a trademark protects against others applying for a similar trademark. This way nobody else can use your name and trick or confuse potential customers and clients.
- A trademark provides you with protection under the law and allows you to sue for damages.
What Happens if I Don’t Get a Trademark?
- Your business name will be vulnerable to others who wish to use it and trademark it, leaving you scrambling to re-name your business.
- You may not be able to use your name, branding and logo for advertising or marketing purposes.
- You open yourself up to litigation if your name or brand infringes on another business’s trademark.
- The consequences of not having a trademark, as listed above, can result in a lot of hassle, extra paperwork and added expenses.
- Putting your business name at risk by opting to not register a trademark can dismantle all the hard work you’ve done in building your brand.
How to Get a Small Business Trademark
If you’ve decided you need a small business trademark, the next step is to file a trademark application. To apply for your trademark, you will need to go through the U.S. Patent and Trademark Office (USPTO) and begin your application process. It is also advisable to start the process by reviewing the basics and what you should know before you start working on your application. Application fees will vary depending on the needs of your business and the service, but for a full breakdown, you should review the USPTO fee schedule. The average cost for an application will be around $350 and it may take as long as a year to complete the process.
Key steps in the registration process include:
- Proving that a trademark is right for you: In this initial step, you’ll need to demonstrate why your product, service or business name is unique and eligible for the legal protections offered through gaining a trademark. It is also important to make sure that applying for a trademark is the right decision for your business needs before you continue with what may prove to be a long and time-consuming process.
- Selecting the right trademark: You’ll need to decide if your name, slogan, symbol or design can be registered. Start off by making sure that your selected trademark is even permissible and can gain legal protections. For example, you cannot trademark a sound, the likeness of someone without their consent or use a generic or vulgar word or phrase. You’ll also need to avoid any confusion when it comes to related goods and services. For example, odds are pretty good that trademarking your coffee business and calling it Starpucks will not receive trademark approval.
- Searching the trademark database: Once you’ve decided the name you want to trademark, it’s important to make sure that it isn’t already taken, especially by a business that offers the same good and services. To do this, go to the Trademark Electronic Search System (TESS) and see if your trademark is available.
- Keeping your deadlines: You must make sure to meet any due dates throughout the trademark registration process. If you miss a deadline, chances are that you may lose your rights to a trademark.
It is also important to note that due to the COVID-19 pandemic, the USPTO has made a few changes when it comes to the trademark application process. If your home-business provides medical services and goods related to COVID-19, you can apply for prioritized initial examination of your trademark application.
Although you can file your own trademark application, you can open yourself up to errors and mistakes that can lead to a trademark denial, as well as a waste of your time and money. In order to avoid this, you should consider hiring a trademark attorney to assist you with the application process and help improve your odds of gaining trademark approval.
Am I Required to Trademark My Business Name?
The short answer is, “no.” The long answer involves more consideration. While you’re not required to register a trademark, it is the best way to protect your business name. There are other options, like applying for a DBA (Doing Business As) designation. Keep in mind though, while a DBA can help your business achieve name and product recognition, it leaves your business name legally vulnerable.
If you have decided that creating a trademark for your home-based business is the right move, look to Incfile for added value and support. Incfile’s Trademark Service can help make sure that you do not hit any snags or bumps by preparing and filing your application and providing a trademark name search and professional advice from an experienced trademark attorney.