Entity Name vs. Trademark vs. Trade Name vs. DBA

Often, I find myself explaining the difference between a business’ entity name, and the various trademarks the business might use to distinguish its goods and services from those of competitors.

Your ENTITY NAME is the legal name of your business. For example: Acme Corp. or Wayne Enterprises, Inc. This is how you sign your contracts. It’s the entity that owns your bank accounts and assets, and it’s the legal “person” that has liability for your activities. But you don’t necessarily have to use this name on your products. Your entity name could be Peanut Butter & Jelly, LLC for so much as the public cares.

Your TRADEMARKS are the designations you use (words, logos, sounds, etc.) so consumers can tell that your goods/services come from you. They are “indicators of source.” For example: MAGNA-GUIDE for compasses or BATMOBILE for video games or THE DIRTY DOZEN for laundry detergent. Typically, your trademarks are owned by [your ENTITY NAME].

Choosing and securing your entity name is not difficult. With a few exceptions, if ENTITY NAME is not “taken” in your state of organization, you can form your legal entity under that name.

Choosing and securing your trademarks is much more complex. On average, I recommend starting the process of analyzing and clearing proposed trademarks at least one full calendar year prior to launch of the goods/services the trademark will represent. It can be a lengthy, frustrating process, but doing it properly is vitally important.

You might ask: OK, then, what is a trade name? Good question. Think of a trade name as a trademark, but for your business as opposed to your goods or services. Some people (wrongly) equate this to a “DBA” or “doing business as” designation.  And it is similar, but not the same (more on DBA in a minute).

Your trade name is an alternate name by which consumers identify your business. For example: your entity name is Peanut Butter & Jelly, LLC. The sign on your store, though, says “ACME Baskets.” Your trade name is ACME Baskets. Your trademark for the baskets themselves might also be ACME Baskets (this is why it’s confusing). But maybe you have separate lines of baskets that you identify with other trademarks, e.g., the VORTEX baskets and the BLUSKY baskets, etc. In that case, ACME Baskets is still your trade name (because it identifies your business generally); ACME Baskets might be one of your trademarks (because it identifies the actual baskets you sell); and VORTEX and BLUSKY are also your trademarks because they also identify the actual baskets you sell. Trade names and trademarks are treated very similarly under the law. So again, think of your trade name as a trademark for your business generally.

OK. The DBA thing.  A “DBA” is something that a sole proprietor files at the county level (in Wisconsin), when the sole proprietor is doing business under a different name. For example, your name is Juan Smith and you are doing business as a sole proprietor (not an LLC or a corporation). The sign on your store, though, says ACME Baskets. In that case, you file a “DBA” with the county, indicating that Juan Smith is doing business as ACME Baskets.

Often, entities like LLCs and corporations refer to their “DBA” when they’re doing business under a name other than their entity name. That’s not correct. If the entity is an LLC or a corporation, the alternate name is not a “DBA” — it’s a trade name.

Finally: where are the risks?

1. Are you likely to get sued because your entity name is somebody else’s trademark, trade name or DBA? No, because just using the designation as the name of a legal entity is not “trademark” use. In that context you’re not connecting it to the goodwill associated with specific goods or services; you’re just using it to sign contracts and open bank accounts and pay taxes.
2. Are you likely to get sued because your trade name or (if you’re a sole proprietor) your DBA is somebody else’s trademark, trade name or DBA? Yes. In that context you are (albeit inadvertently) connecting the designation to the goodwill associated with somebody else’s goods, services, or business. And that’s infringement under trademark law.
3. Are you likely to get sued because your trademark is somebody else’s trademark, trade name or DBA? Yes.

If you’re into DIY, or if you let non-trademark lawyers manage these issues for you: maybe OK on #1. But as soon as your use starts falling into #2 or #3 above — you’re in the danger zone.

If you’re ready to get this right, let me know!