People often get confused between a trade name and a trademark. They are considered similar. But the fact is – both of them possess different characteristic values. Both of them are equally important for business. One should know the difference between them to decide whether they are in need of registration of a trade name or trademark.
It means a name used to give an identity to any Company, LLP or firm. Such a company or firm will carry on the business under this name. During business registration, it is mandatory to give a name to your business. One can use any trade name based on availability. For a private limited company or a limited liability partnership, the Ministry of Corporate Affairs will not approve the registration of a name which is similar to those being used by any other company or LLP registered with MCA.
Trademark is a brand name. It includes any word, symbol, logo, numerals, or combination of these. It distinguishes the goods and services of one entity from the others. The trademark registration provides protection under the Trade Marks Act. The unauthorised use of any registered trademark is a violation of the law. Hence, one should check before using, whether the brand name is available or already registered by any other person.
Trade Name v/s Trademark
We will further discuss major difference/s between trade name and trademark.
1. Regulating Authority
The regulating authorities for both, trade names and trademarks are different. The Trade name can be registered under different acts as per the form of business. For example, a company and LLP are registered under the Ministry of Corporate Affairs and regulated by the Companies Act and Limited Liability Partnership Act respectively.
The trademark is registered by the Registrar of Trademarks and regulated by the Trademark Act. If the trademark is to be owned by an entity then one has to first register name of the business entity and registration of a trademark can be done thereafter.
2. Registration Process
As the regulatory authority is different, the registration process for trademarks is different. The trade name is registered as per the regulations of different applicable provisions on the basis of the form of business. However, all types of trademarks are registered under the Trademark Act. In Company and LLP, the Ministry of Corporate Affairs does not approve the similar name.
If the trademark is registered with any name then the ministry will not approve a similar trade name for Company and LLP. The registration period also differs. A trade name is registered in around two weeks but trademark registration takes at least six months or more.
3. Legal Protection
To secure a brand name one has to take registration under Trademark. It provides legal protection for unauthorized use of the brand name. One can easily file a suit against such a person. If a person has a registration of a mark as a trade name and not as a trademark, then he/ she may be required to prove the ownership in the trademark. A registered trademark is a property that establishes your ownership of a mark and gives you legal protection for the trademark.
4. Asset creation
The trade name is just a name of an entity while a trademark is a property. The entity carries on business activity and enters into a contract under such name. It acts as an administrative function. All other tax registrations and filings are done under the trade name.
However, on the other side, the trademark is an intangible asset of an entity. It adds value to the business. It creates goodwill in the market for the entity. Trademark is used for differentiating a product from another. One cannot enter into contracts or agreements in the name of a trademark.
The trade name once registered is registered forever. There is no need to renew the registration. However, the trademark is only valid for 10 years. If it is not renewed within the provided time period then one may lose the trademark, which allows others to use the same brand name.
Trade names and trademarks may sound similar sometimes, however, the meanings of both are different. They are separately defined under the law. Each serves a different purpose. There is no direct relation between trade name and trademark. Each can be registered independently and provides different rights. A trade name shows ‘doing business as’ while a trademark shows the brand name of the products or services. The best example is “Paytm” which is a trademark whose trade name is ‘One97 Communications Limited’.
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