Three Trademark Myths

Three of the most common myths regarding trademarks involve how rights are acquired, the scope of protection a trademark provides, and the assumption that registering a business name covers everything.

Myth 1: “If I register my business name or LLC with the state, my brand name is automatically protected as a trademark.”

Many entrepreneurs believe that once their state government approves their corporate name, LLC, or DBA (Doing Business As), they legally own that name as a trademark and can stop anyone else from using it.

How it’s wrong

Business entity registration and trademark registration are entirely different legal mechanisms. State corporate registries exist primarily for tax and administrative tracking, and they will often approve a name just as long as it isn’t textually identical to another registered business in that state. A trademark functions as a source of origin to identify your specific goods or services. Mere registration of a business name does not grant you nationwide trademark rights, nor does it stop someone else from holding prior trademark rights to that exact name.

Myth 2: “Owning a trademark gives me a total monopoly on the word or phrase for everything.”

People often assume that once a trademark is secured, no one else can use that word or phrase in any context whatsoever.

How it’s wrong

Trademarks are strictly tied to specific industries and classes of goods or services. They do not grant a blanket monopoly over a word. This is why completely different companies can successfully coexist using the exact same name — such as Delta Airlines, Inc. for airline services and Delta Faucets Co. for plumbing fixture goods — because consumers are not confused about who made what. As long as two businesses operate in entirely different markets where confusion is unlikely, they can share the same name.

Myth 3: “I don’t need to file for a trademark; I can just wait until my business grows.”

A lot of startup founders think trademark registration is something to worry about only after a company becomes successful or national.

How it’s wrong

While it’s true that common law trademark rights can be acquired simply by using a brand name in commerce, those rights are often weak and strictly limited to the geographic area where you actively do business. Furthermore, most countries operate on a first-to-file priority system. If you delay registering your trademark, someone else can legally swoop in, file an application for your exact name first, and legally lock you out—potentially forcing you to rebrand your entire business down the road.

For more information on trademark rights, myths and otherwise, please contact Yonaxis I.P. Law Group.