Podcast Episode 17—Forming an LLC Does NOT Protect Your Trademark
Podcast Episode Timestamps
00:00 — Forming an entity does not protect your trademark!
00:06 — Intro
00:29 — Business owners often mistakenly think that they have trademark protection because they have an LLC in place
01:01 — This episode expands on the mention of this problem in episode 1 of the Keith Law, PLLC Podcast
01:09 — What about filing a formation document?
02:48 — What about filing an assumed name certificate or d/b/a?
03:44 — “So, how do I get trademark rights?”
04:50 — The effects of registering a trademark with the Texas Secretary of State
05:34 — When you can apply to register your trademark with the United States Patent & Trademark Office, and the effects of doing so
06:09 — Wrapping up (summarizing) this episode
07:20 — The most important take-away from this episode
07:35 — Check the show notes for more information and for how to ask questions
07:54 — Outro
The Situation
I often hear business owners say that they they would eventually like to register their trademarks, but that they’re already protected because they have a filing entity or assumed name registered with the Texas Secretary of State. This is not true. Filing Articles of Incorporation, a Certificate of Formation, an Assumed Name Certificate, and/or a “dba” does not give you any rights to use a name in commerce. Although I covered this topic briefly in the middle of episode one of the Keith Law, PLLC Podcast, I think it deserves more focus because it’s such a common misconception.
Forming a Filing Entity Does Not Protect Your Trademarks
Filing a formation document with the Secretary of State to create a corporation or other entity with a certain legal name only prevents the Secretary of State from filing a formation document that states a legal name that the Secretary determines is not distinguishable in its records. Simply filing a formation document with a legal name does not authorize you to use the legal name in violation of someone else’s rights to the name. It does not prevent someone else from using that name in Texas commerce. It does not prevent the Secretary of State or county clerk from filing the same name as an assumed name. It does not prevent the Secretary of State from registering a mark that is the same as or similar to that legal name. In other words, it does not provide any trademark protection.
Filing an Assumed Name Certificate Does Not Protect Your Trademarks
Similarly, filing an Assumed Name Certificate or “dba” with the Secretary of State or a county clerk only records information about the underlying business. Simply filing an Assumed Name Certificate or “dba” does not authorize you to use the name in violation of someone else’s rights to the name. It does not prevent anyone else from using the name in Texas commerce. It does not prevent the Secretary of State from filing a new entity with that name as its legal name. It does not prevent the Secretary of State or county clerk from filing the same name as an assumed name. It does not prevent the Secretary of State from registering a mark that is the same as or similar to that name. In other words, it does not provide any trademark protection.
So, How Do I Get Trademark Rights?
Through use. You acquire common law ownership rights to a mark simply by using the mark in commerce in connection with the relevant goods or services. You do not have to register your mark to acquire common law rights to it. Whoever is the first to start using the mark in connection with certain goods or services has superior common law rights to the mark in the geographic area where it is used, so long as they continue using it in that area in connection with those goods or services. If, after you started using your mark, someone else manages to register the same or similar mark in connection with the same types of goods or services you provide, they don’t have a right to stop you from using your mark in the geographic areas you used it prior to their registration.
Registering your mark with the Texas Secretary of State does provide value beyond the common law rights of an unregistered mark. State registration puts the rest of Texas on notice that you claim ownership of the mark in Texas commerce in connection with the relevant goods or services. A certificate of registration is presumptive proof of:
- the validity of the registration;
- the registrant’s ownership of the mark; and
- the registrant’s exclusive right to use the mark in Texas in connection with the relevant goods or services.
Texas statutes provide a civil cause of action for infringing upon a registered mark and make it a crime to counterfeit registered marks.
If you use your mark in interstate commerce, you can apply to register it with the United States Patent and Trademark Office (USPTO) which generally provides more extensive trademark rights and protection than a state registration. Among other things, registering a mark with the USPTO puts the rest of the country on notice that you claim ownership of the mark and creates a legal presumption that you have the exclusive right to use the mark nationwide in connection with the relevant goods and/or services.
Conclusion
Although there are important reasons to form a filing entity such as an LLC or corporation for conducting business in Texas, trademark protection is not one of them. Use of your mark in commerce (i.e., doing business in connection with the mark so that your consumers encounter the mark in connection with the goods or services you provide) is the essential element of protecting your trademark. Without registering your marks, you only get what’s called “common law” protection which is weaker than the statutory protection provided by registering them with the USPTO or the Texas Secretary of State.
Disclaimer: This audio and blog post are for informational purposes only and should not be misinterpreted as legal or other professional advice. If you have a legal question, you should consult with an attorney in your jurisdiction. Thank you for tuning in to Keith Law, PLLC.
(Photo by Andrea Piacquadio from Pexels)