Something often overlooked by many startups is trademark registration.
Trademarks are important to small businesses and entrepreneurs because they protect a brand’s reputation by preventing others from using brand and product names without permission. This keeps brand integrity high and customer confusion low.Unfortunately, there are a lot of misconceptions about trademarks that could cost your business a lot of headaches and a lot of money. Click To Tweet
Myth #1: Trademarks and copyrights are the same thing
False. Trademarks protect things like brand names and logos while copyright typically protects things like songs, books, poems, and movies. While there are certain things that can be registered for both trademark and copyright protection, most will fall into one category or another.
Myth #2: I should wait until my business grows to register my trademark
Definitely false. The first thing to know is that trademark registration can be applied for even before the product or service is for sale or before your business is open. It is strongly encouraged that a business registers its trademarks as soon as possible to avoid infringement by copycat companies.
In addition, businesses should research their potential trademarks from the very beginning. Knowing what other businesses and marks are out there can help entrepreneurs be aware of potential problems. One client company I worked with had done no research before attempting to register its mark. During the registration process, we learned that a similar mark already existed and that its mark would therefore likely be rejected. They were one week away from launching and had spent thousands of dollars on marketing and packaging. Now, they needed a complete rebranding.
Myth #3: You need an attorney to file a trademark
Okay, I’ll admit it. This one is technically false as well. Anyone can file their own trademark registration with the United States Patent and Trademark Office (USPTO) by using its website. However, it is strongly recommended that business owners seek help from an attorney to improve their odds of the mark being accepted on the first try and to avoid incurring extra costs.
In addition, most attorneys offer full-service trademark registration packages that include a comprehensive trademark search, preparation and filing of the application, and support after the registration if the USPTO needs more information or clarification.
Myth #4: Registering a trademark is expensive
It depends on what you classify as expensive. Here are the facts. Filing a federal trademark costs $225-$275 when done directly through the USPTO website. If you work with a trademark attorney, you will also pay attorney’s fees on top of that. Many lawyers charge flat fees between $400-$1,000 for a trademark registration package.
Depending on the size of the business, this may seem like a lot of money. However, if an unregistered mark ends up being the subject of a lawsuit, the costs of defending your brand could skyrocket to tens of thousands of dollars.
Myth #5: A business should be named after what it sells or does
False. Doing so will almost certainly guarantee rejection of your mark in most circumstances. Merely descriptive marks are marks that simply describe the product and are not usually eligible for trademark registration. Using someone’s name will often fall into this category, so “Smith’s Coffee Shop” isn’t a great idea. There are a few ways to get around this, but they take at least five years of business use before registration. The bottom line: be creative.
Myth #6: After I register, no one else can use my brand’s name
You guessed it, also false. Federal trademark registration only applies to the classes of goods and services that a trademark is registered in. The classes are divided into categories like restaurants, clothing and apparel, construction services, etc.
It is possible that two popular companies can have the exact same name and both be protected by trademarks. Delta is a prime example. Delta Airlines is registered in Class 39, the class for transportation services. Delta faucets is registered in Class 21, which is for housewares. These companies are allowed to co-exist and use the same name because they offer different products.
Trademarks can be a tricky topic, but they don’t have to be. A trademark search in the early stages of a business can save a lot of time and hassle in the long run. Proper registration of a federal trademark can be extremely beneficial to a new business. Keep these tips handy as you begin your business journey and reach out to a local trademark attorney for more information.
Allison Higgins is a trademark and business law attorney with Quest Business Law PLLC in San Antonio. Her firm focuses on helping small businesses and entrepreneurs protect their brand through trademark registration, business formation, and other business law services.
The featured image is of a gavel. Photo by Bill Oxford on Unsplash.