Many business owners believe their company’s name is “cleared” for trademark purposes once it is registered as a business name. That is a dangerous misconception. The system for registering business names is separate from the system for clearing and registering trademarks. To minimize the risk of expensive infringement litigation and maximize protection for a company’s trademark, a business owner should have a complete trademark search conducted and should generally register their trademarks, not just their business names, with the federal or state governments.

Business names – technically, “trade names” – are registered by the county clerk (for sole proprietorships and general partnerships) and the State (for corporations, limited liability companies and limited partnerships). Trade names are legally distinct from trademarks and service marks. While a “trade name” identifies the company itself, a “trademark” distinguishes the company’s goods from another’s goods and identifies those goods as originating from a particular source. A “service mark” serves the same function for services.

The difference may seem technical, but failing to recognize it can lead to trouble. County or State registrations for trade names and alternate names neither reserve a trademark nor ensure a trade name will not infringe another business’s trademark, service mark or trade name. The state/county trade name registration system does not prohibit the registration of alternate names that infringe other trade names, much less trademarks and service marks, and the system does not cross-check between state and county records. The trade name registration/reservation process also does not check for registrations outside New Jersey or for unregistered uses of trademarks and service marks, which can have common law protection.

A comprehensive search of federal, state and public records is needed, therefore, to clear trademarks, service marks and trade names. That search should be done before a company invests time and money developing goodwill in the mark.

Once a mark is cleared, it should usually be registered with the federal Patent and Trademark Office or the State. Although registration is not mandatory, it enhances the scope of protection, deters infringements and affords registrants important advantages when trademark disputes end up in court.