What is the difference between an LLC and a Trademark?

What is the difference between an LLC and a Trademark?

"WHAT IS THE DIFFERENCE BETWEEN AN LLC AND A TRADEMARK?

  • An LLC is a type of business entity that acts as a wall around your personal assets so that if your business were to ever get a judgment against it, a creditor could not take your personal assets like your bank account, car, or home.

  • A trademark protects a name, logo, or slogan. Registering a trademark (like your business name) prevents other people from using your name, or a similar name in your industry.

"DO I OWN THE EXCLUSIVE RIGHT TO USE MY BUSINESS NAME BECAUSE I FILED AN LLC WITH THAT NAME IN MY STATE?"

  • No! While your state won't let you register your LLC with the same name as someone else who has registered it in your state, only federal trademark protection gives you the exclusive right to use your name/tagline/logo in your industry.

"SHOULD I FORM MY LLC OR MY FILE MY TRADEMARK APPLICATION FIRST?"

  • As a general rule of thumb, my clients hire me to do a comprehensive trademark search (this covers existing United States federal applications and registrations, and common law results like state trademark filings, domain names and social media accounts) before filing for their LLC. Once they've formed their LLC, we file the trademark application for their brand name (since you'll want your LLC to own the trademark). Many times clients already have their LLC formed when they start the trademark process, and in that case we'll do the trademark search and application after the LLC is formed.

"WHAT HAPPENS IF I DON'T TRADEMARK MY NAME?"

  • Trademarking your name is a business investment, so sometimes people understandably have to hold off on the expense until the business starts growing. The downside to not trademarking right away is that someone else could come along and trademark the name first, and send you a cease and desist for copying them. It's often worth a cost-benefit analysis of the how expensive (and annoying) a rebrand would be vs. making the investment sooner. Because trademark applications are at an all-time high (thanks to Covid and the thousands of people starting online businesses), the US Patent and Trademark Office is taking a year + to approve applications, so the sooner you apply, the sooner you have trademark protection (and can make money off of your name with licensing opportunities).

Contract templates and trademarks are my two favorite legal things, so I set aside 2 mornings per week to talk to you ladies. If you've been thinking about trademarking your name or logo and want to learn about the process, feel free to book a call with me through my LAW FIRM.

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