As a trademark attorney, one often hears businesspeople talk about domain names, trademarks, and trade names as if they were really the same thing. They are not. Each has different rules and different implications for your legal rights. Reviewing the summary below should help you distinguish which is which.
What is a trade name?
A trade name is the name used to register a business as a legal entity in the state where is operates. Usually this is done at the Secretary of State or the Department of Corporations, or a similar state-run agency. The trade name is also registered with the Internal Revenue Service for purposes of federal tax laws.
Your trade name is used on contracts and other legal documents where your legal business name is needed. For example, when the officer of a corporation signs an agreement, he signs it as “CFO of XYZ Corporation.” Anyone who wants to check the legal status of that legal entity can investigate XYZ Corporation on the records of its state. For that reason, contracts normally will state the party to the contract and include something like this: “A Delaware limited liability company” because that information allows someone to research the legal status of the business.
To search for someone’s trade name, try an Internet search for “[State name] business entity search”. Then use the government database to search for the trade name.
A trade name must be unique within the state where it is registered. But an identical name might be used in other states. And a very similar name could be used in the same state. That does not cause a problem because only the specific trade name—the precise legal entity name—is what matters in legal documents.
Companies may use their trade name—the legal entity that they operate through—as the public name of their business. But they don’t have to.
What is a trademark?
A trademark is a word or design that represents a source of goods or services in the minds of customers. A trademark is what we normally think of as a brand. A trademark can be registered at the United States Patent and Trademark Office and at the national trademark offices in countries where you do business. (Trademarks can be registered at the state level but that is rarely a wise choice.)
A trademark might be the same as the trade name of a company (that is, the name of its legal entity, but often a company will use a different word for its trademark. A carpenter might register a legal entity called Dave Anderson Carpentry, LLC. But on his work truck he uses the moniker “Dave’s Fix-it-all Carpentry.” The public sees Dave’s Fix-it-all Carpentry as the trademark for Mr. Anderson’s services. No one knows the trade name Dave Anderson Carpentry, LLC except his accountant. And that is fine. Because Dave’s Fix-it-all Carpentry is what the public sees as a representation of Mr. Anderson’s services, that is the trademark that he should register—it is the public-facing name of his business and the term that represents the goodwill of his business in the minds of his customers.
Sometimes businesses want to use a trade name—a legal entity name— that people will recognize. Perhaps they plan to sell multiple products or services, each under a different name. The trade name becomes the umbrella that ties multiple product names together in the minds of customers. In that situation, the trade name is also being also used as a trademark.
Consider a widely known example: Amazon, the giant online retailer. Most people know about Amazon. They also know where to find it, at amazon.com. But if you enter into contracts with Amazon, you will see that the “company” uses many different trade names (legal entities) depending on what it is doing. For example, you might sign a contract with Amazon Web Services, Inc., Amazon.com Auctions, Inc., Amazon.com Baby, Inc., Amazon Payments, Inc., Amazon Overseas Holdings, Inc., and many more. All of these are registered legal entities in the state of Washington or in other states where Amazon operates. Yet all of these related legal entities are known to the public under the brand (the trademark) of Amazon. There is no need to protect Amazon.com Baby, Inc. as a trademark, although there may be reason to protect Amazon Baby if that phrase is presented to customers to represent some of the goods or services offered by the company.
A domain name is an entry in a database—like a line in a spreadsheet. That entry corresponds to an internet protocol address. (For example, 220.127.116.11.) The internet protocol address lets your browser contact a specific computer where web pages are stored. Domain name databases are operated by private companies that have contractually agreed to operate in a certain manner. However, owning a domain name does not give you any trademark rights in that name. In order to have a trademark right based on use of that trademark, you must sell goods or services; in some cases operating a website using the trademark will qualify. But owning a domain name does not.
Domain names are international in scope and are not tied to national trademark registries. Trademarks are registered only for specific goods and services; domain names are not. So, for example, only one person in the world can own delta.com, even though many companies own a trademark registration for the word DELTA for various goods and services.
If you own a trademark and another party registers a domain name in bad faith that includes that trademark (for example, for the purpose of diverting your customers or reselling the domain to you at a profit), then owning a trademark registration can be very helpful to show that you have a legal right to use that domain name. But if another company with a similar name, but selling very different products, is using a domain name that you want, you don’t automatically have a legal basis to object. To follow on the example above, Delta Airlines used to operate using delta-air.com; after many years, they were able to obtain the delta.com domain name from another company that had a legitimate right to use it, but was willing to sell it.
By understanding the differences between trademarks, domain names and trade names, you can check the availability of what you need, register what you use, and better understand your legal rights.