One of the most challenging aspects of starting a home-based business is choosing a name for your new organization. For freelancers this might not be necessary of course, but for anyone who has ambitions to see their business grow, the company’s ‘brand’ has to be chosen very carefully. It’s not just that you need to think of something catchy and memorable, you also need to make sure it’s original – its no good choosing a moniker that’s already being used by someone else, especially if that someone else happens to be in the same line of business.

So how can you ensure your business name is original? More to the point, is it even legal to use the name you have in mind?

Trademarks

Before we go answering those questions, let’s look at some basics – trademarking basics to be precise. If you’re serious about getting into business, then you’re probably going to need a trademark, which is essentially a word or words, or even a symbol (or a combination of these) that indicates your company as the source of the products and services it sells, distinguishing it from other companies.

For the home-based business owner, there are two main considerations; choosing a name that’s available (one that hasn’t already been trademarked by anyone else), and then registering that name to prevent others from using it.

Name Availability

Before you press ahead with that website launch and start printing out those business cards, you need to make sure you can legally use the name you have your heart set on. The last thing you want as a start-up is to find yourself involved in a costly legal dispute because you accidently used someone else’s name. There are two places where you should check:

  • Trademark search – you can carry out a free trademark search here. This will ensure that it’s legal for you to use your chosen name nationwide.
  • Your state’s database of company names – this should be done before you register your business within your state.

The reason you need to carry out both checks is that some companies may register with one but not the other. For example, a firm might only be registered with their state, and not the US Patent and Trademark Office (USPTO). Even though the trademark isn’t officially registered, it could still cause problems later on if your business starts trading in the same state as the company that already uses your chosen name.

Registering your Name

Once you’ve identified a suitable name, the next step is to incorporate your company as a sole proprietorship or an LLC, something that automatically registers your new business with your state. As part of this application process, the state will check that the name you have chosen is unique – confirming what you know already (don’t be tempted to just leave the state to check for you of course, because this will only delay the launch of your business if it turns out your name is already being used).

Once approval has been granted, that means your chosen business name is yours and yours alone – but only within your state.

For those who don’t envisage their business expanding beyond the state’s borders (for example, if your business is a hair salon), then state-level protection might well be enough. However, if you plan on selling products or providing services out of state, then you should also consider getting a trademark on your name.

Registering a trademark

There’s no legal requirement to register a trademark for your business, as you are automatically entitled to common law rights as an owner when you start trading under your name. However, there are a number of advantages to registering with the USPTO.

The biggest advantage is that a trademark offers much more protection than “common law” does. This makes it far easier to protect yourself against other companies that begin trading under your name or a close variation of it, or if someone takes your company name on websites like Twitter or Facebook.
In addition, a trademark can attain significant value over time as your business goes from strength to strength. Eventually, you could even decide to sell your trademark to a third party. Of course, this cannot be done if you haven’t registered it.

Registering with the USPTO is fairly complex however, and it isn’t exactly cheap either. You can file an application online through the USPTO’s website. Application fees cost around $325 per class, and so you will need to read through the site’s FAQ to determine the most suitable trademark class for your business. The process will take from 6 months up to 12 months, so it’s vital that you check your trademark is not already in use – if it is used by someone else, your application will be rejected, you’ll lose the application fees, and you’ll have to start the whole process again from scratch.

Bear in mind that while registering a trademark is expensive and time consuming, obtaining one will ensure that your company’s rights are protected by both state and federal governments. You may decide it’s not necessary to register a trademark, but doing so is by far and away the best method of protecting your company’s brand and image.

ABOUT THE AUTHOR

Vishal P. Rao has been doing business online since 2003 and runs a popular forum for those who work at home. When he is not working, he spends time doing meditation and yoga.

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One Response to “Business Trademark: Do you need one for your Home-Based Business?”

  1. Kelly Dack says:

    Thanks for the post! Your suggestions are indeed very interesting and useful. Home based business is not an easy task. It requires proper planning and skills to start a business.

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