People often get confused between the trade name and trademark. They are considered similar. But the fact is – both, the trade name and trademark are different. Both are equally important for business. One should know the difference between them to decide whether they are in need of registration of trade name or trademark.
Trade name means a name which is used to give an identity to any Company or LLP or firm. Such company or firm will carry on the business under this name. During business registration, it is mandatory to provide the trade name. One can use any trade name. Further, for a company and an LLP, it is mandatory to use a trade name which is different from any existing company or LLP. The ministry shall not approve a trade 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 a combination of these. It distinguishes the goods and services of one entity from the others. The Trademark Registration provides protection under the Trademark Act. The unauthorized 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.
A comparison between Trade name and Trademark
1. Regulating Authority
The regulating authorities for both, trade name and trademark are different. The Trade name can be registered under different ACT as per the form of business. For example, a company and LLP are registered under Ministry of Corporate Affairs and regulated by Companies Act and Limited Liability Partnership Act respectively.
The trademark is registered under Registry of Trademarks and regulated by Trademark Act. If the trademark is to be owned by an entity then one has to first register the entity (its trade name) and registration of a trademark can be done thereafter.
2. Registration Process
As the regulatory authority is different, the registration process of trade name and trademark is also altogether different. The trade name is registered under different ACT’s as mentioned above on the basis of the form of business. However, all the types of trademarks (blog link)are registered under the Trademark Act. Any trade name can be registered except in case of companies and LLPs. In Company and LLP ministry do 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 2 weeks but trademark registration takes at least half a year 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 person.
But if a person has only registered a trade name and not the trademark then the other person may use your trade name. In such a case, one can file suit against them but you need to prove that you are continuously using such trade name and how the usage of the trade name by others affects you. Hence, the burden of proof is higher.
4. Asset creation
The trade name is just a name of an entity. The entity carries on business activity and enters into a contract under such name. It acts as an administrative function. All other tax registrations, 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 the products from others. One cannot enter into the contracts or agreement in the name of a trademark.
But the trademark is only valid for 10 years.
Despite sounding similar, 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 and its trade name is “One97 Communications Limited”.