When filling out an application for trademark protection with the United States Patent and Trademark Office (USPTO), one of the very first questions the applicant will be asked for is the name of the owner of the mark in question.
At first glance, this may seem like a simple question and you may be tempted to just fill in your personal name. But, if you are using the mark for business, or if you already have a corporate entity set up, it may be proper to have the corporation own the trademark instead. The below discusses applications based on use, if you are filing a trademark application based on intent-to-use the ownership question is even trickier, and we will discuss this in a future post.
Owning a Trademark as an Individual
If you are a true sole proprietor, meaning that you run an unincorporated business where you are the owner and pay personal income tax on any profits earned from your business, it may be appropriate for you to apply for your trademark in your personal name. Examples of businesses owned by sole proprietors who may need trademark protection for the name of their business, logos and/or the products and services offered by the sole proprietor include crafters, artists, bakers, graphic artists, website designers, freelancers and the like. Some startup companies initially start as sole proprietorships in the early stages of the venture, as the entrepreneur behind the start up gets a feel for how well the business will be received in the marketplace.
While owning your trademark as an individual may seem like a simple solution, it’s important to think ahead to the future. If you end up incorporating down the road, you will need to apply to transfer your trademark into the name of your entity and you will be responsible for all of the fees necessary to do so. Applying for a trademark in an individual name can also get tricky when there are multiple individual owners of a sole proprietorship, such as sisters who create crafts together or a husband and wife in a part-time catering business. In this case, your attorney will need to follow state law to determine who exactly is the legal individual owner of the mark in question.
Owning a Trademark as an Entity or Corporation
If your business is incorporated, you will likely want to apply for your trademark in the name of your entity, rather than your personal name. This is true even if you are the founder or president of the company in question. As the business grows and the people employed by the company change roles or leave the company altogether (perhaps even you as the owner leave the business through a sale or retirement), the company’s trademark ownership will not be affected, as it is owned by the entity and not a single person.
Applying for a trademark in the name of the entity may also be important if the company needs to sue for trademark infringement. Under federal law, the ability to enforce your trademark and hold the infringer accountable for damages is only possible if the trademark ownership is correct as of the initial filing date of the application. An example of a company’s trademark ownership gone wrong would be if the president of the company puts the trademark in his or her personal name, but the court determines that it’s the entity or corporation that actually controls the goods and services under the mark and not the individual. If this happens, the mark could be completely invalidated, and the infringer could walk away without consequence.
When It Comes to Ownership of Your Mark, Get it Right from The Start
As I’ve explained above, there are severe consequences in not applying for your trademark correctly from the start. That’s why it’s important to work with an attorney during every step of the trademark application process. Your attorney will take the time to ask you about your plans for the future and your vision for the business to determine the best way to own the trademark in question. If you are a sole proprietor, your attorney may even advise you to open an entity, such as an LLC or S-Corp right away that would protect your marks as your business expands and grows.
If you find yourself in this position today and you’d like to speak with an experienced attorney about the best ways to own your marks and protect your company’s intellectual property, we invite you to contact our trademark and copyright lawyers at 888-666-0062 to schedule a consultation.
DISCLAIMER: The information contained in this article is for informational purposes only and is not legal advice or a substitute for obtaining legal advice from an attorney.