You have a lot to consider when putting together your limited liability company. From assembling your team to establishing your mission, there’s a lot to be done before you finally reach launch day.
However, even in that flurry of activity, it’s vital not to overlook the importance of protecting your company’s assets. To that end, your company’s name is among the most integral elements in your long-term success. As the starting point of your brand, you’ll have to decide if you need to trademark your company name or if a simple DBA—“doing business as” or fictitious name — is enough.
Let’s explore a DBA vs. trademark and how they might work together.
What Is a Trademark?
Imagine going through all the trouble of devising the perfect name for your business. You’re excited and ready to make a difference. Then you realize that another company either already has the same name or has sprung up to capitalize on your business’s success. Without a trademark for your business name, you have little to no defense against any emerging claims.
A trademark ensures that you have legal ownership over elements integral to your company, such as its name or logo. Look around. Examples of successful trademarks are everywhere. Think of company names and logos like Apple, McDonald’s and Nike, or specific products like Jell-O, Post-it, ChapStick and Vaseline. They are all trademarked and protected, meaning only the company owning the trademark can use these names and benefit from the products.
Filing for trademark rights isn’t overly complicated, although the process of finding a name that 1) suits your business and 2) isn’t already claimed can take a while. Once you file a trademark, it is infinitely renewable and recognized worldwide.
Benefits of Having a Trademark
A trademark can add value to your business. It also highlights company reliability and trustworthiness when it comes to offered products or services. Many of today’s trademarked company names and products have entered into common everyday use. Think of how many times you’ve asked for a Band-Aid every time you had a scrape or cut! Here are seven benefits of having a trademark.
- Offers brand protection. Prevents others from using the same company or product name, logo or tagline. (Think of Budweiser’s “King of Beers” catchphrase. That has a trademark!) This helps protect your brand and reputation, especially when others are trying to take advantage of your success.
- Ensures exclusive rights. The protection for a trademarked name is nationwide and begins as soon as the trademark takes effect. So even though your business is known only in Boston — for now — your trademark is protected in New York, Los Angeles and everywhere in between.
- Can be a major asset. Many companies use their trademark to sell franchises. A successfully trademarked business can also attract potential buyers and help increase selling value.
- Bolsters a company’s business and reputation. Promotes the business that you are in and the products that you are selling through name and logo recognition. A trademarked name and logo also helps represent what a business stands for.
- Use of registration mark. A trademark allows you to use the ® symbol, adding to the validity of your product and acting as a deterrent against others who may want to steal your name or logo.
- Shields against trademark infringement. Having a trademark protects against others applying for a similar trademark. It also does not allow a competitor to infringe on a trademark by playing dumb and using the “I did not know” defense.
- Protection under the law. A trademark allows you to sue for damages. It also allows the U.S. Customs and Border Protection to block imports that infringe on your trademark. For example, knockoffs from other countries.
What Is a DBA?
A DBA name has less to do with legal protection than trademarks and should not be confused with the legal business entity of your company. In some cases, a sole proprietor will use a DBA to separate their business from their individual name, or a corporation may opt to conduct business with a DBA name rather than using their corporation’s legal registered name.
This distinction between your own or your organization’s legal name is truly the only major benefit of a DBA name over other options. While a DBA name certainly has its place (and may very well be ideal for your company), its usefulness as a marketing and brand development tool doesn’t include any larger legal protections for your company or its meticulously selected name.
Key Features of a DBA
- Easy to set up. The filing process is not as complicated or as costly as setting up as registering a trademark.
- Avoids using your real name. A DBA lets you create a catchy and memorable name for your business that’s different from your registered entity name. This, however, opens a business owner to the risk of other people or businesses using that same name or a variation of it.
- Limited to a local market/area. A DBA does not extend across the country and is primarily allowed in a limited area.
- A DBA does not form a business entity. Rather, it allows you to use a fictitious name for your business that differs from your actual name.
- No protection from competitors. You cannot copyright or trademark your “fictitious” name or alias. Unlike the protections afforded to trademarks, your business assets and personal assets are not protected if you just file for a DBA.
DBA vs. Trademark: How to Decide
So, we’ve laid out a basic description for both trademark name and DBA name. Now, let’s take a look at some key ways in which these two types of names compare.
Protection. Legal trademark and DBA names are designed for very different functions. As described above, a DBA creates a buffer between a legal entity as the name you use to market and promote your company, whereas a trademark name is inextricably concerned with the distinction between your company and others with names or even missions like it. If you have both of these needs, then you can easily file both a DBA and a trademark name, as this is a common practice among businesses.
Name ownership. If you really want to secure exclusive rights to your company’s name — perhaps you’re thinking long-term branding and expansion, which is never a bad idea — then you certainly will want to trademark. DBA names don’t give you the right to claim anything about your business’s name, at least not across the board. In many cases, businesses in an area can “claim” duplicate DBA names. Trademarks, however, are all about ownership of your name and the elements therein.
Legal rights. Aside from how you use your business name and your interest in having exclusive rights, you’ll also need to fully understand the legal protections or lack thereof involved with each. Yes, we’ve covered, but as the primary difference between trademark and DBA names, it bears repeating. DBAs offer virtually no legal rights. You have the right to use a name for your company, not to defend it against the competition. Trademarks and DBAs can work together to provide the best of both worlds though.
Cost. One key reason you should decide whether you want to secure a trademark vs. DBA name for your business is the cost involved. While trademark names can run into hundreds of dollars, a DBA name bears an incredibly affordable price, sometimes as low as $50. It all depends on the level of trademark (state vs. federal, the latter of which costs significantly more) you’re seeking, and that’s not even considering the potential need for legal assistance.
Can You Trademark a DBA?
If you want to use a DBA for a particular product or service, you can trademark your DBA, giving it the same legal protections provided to trademarked companies and brands.
By having a trademark for your DBA, you gain all the benefits and protections of having a registered trademark. It keeps the competition from stealing your trade name or any similar sounding name and can also contribute to your unique brand identity.
Getting Trademark or DBA Help with Incfile
Getting a better understanding of how a trademark and a DBA function within your business can help you make wiser decisions for your company’s future. We also understand how overwhelming it can be to build a new company from the ground up. That’s why we make it our business to give you the best possible launchpad for your latest venture.
At Incfile, we give entrepreneurs like you the tools to maximize your impact on the market. Our Trademark and DBA filing services can take care of all the details for you, allowing you to focus on forming and growing your business.