LLC’s versus Trademarks

 

I have been getting questions around LLC’s and Trademark rights. These processes are completely separate processes. I want to give you the differences of what they each do to make sure you are putting the correct legal protections in place for your business.

In this episode, we’ll cover: 

  • Breaking down the differences between the processes
  • Examples of when to get a trademark or LLC
  • Record of assignment

 

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The Legalpreneur Podcast is advertising/marketing material. It is not legal advice. Please consult with your attorney on these topics. Copyright Legalpreneur Inc 2022


 

Episode 181: Transcript

Welcome to the Legalpreneur Podcast. I’m your host, Andrea Sager, founder and CEO of Legalpreneur, Inc. As a serial entrepreneur and someone that works exclusively with small business owners legally protecting their business, I’m dedicated to covering common legal issues faced by business owners, providing you with the business knowledge you need to catapult your businesses growth and showing you just how some of the world’s most elite entrepreneurs have handled these legal and business issues themselves in true attorney fashion. The information in this episode is not legal advice. This is for informational purposes only, and you should always consult with your attorney before implementing any of the information in the show. Hey there. Welcome back to another episode of the Legalpreneur podcast. I’m your host and today I am coming at you with LLC versus trademarks. So lately I don’t know why this has been coming up, but I’ve had a number of clients ask, Hey, if I already have the LLC, does that mean I have trademark rights? Or if I have the LLC, does that mean I already have the trademark? No. And I’m going to explain why. But first, let’s get into my Legalpreneur live reminder. So we’re about to do another round of speaker announcements and I also have a special offer if you’re interested in attending Legalpreneur live possibly for free. So DM me on Instagram at Andrea Sager Law. If you’re interested in learning how to attend for free, the tickets are not cheap because we are providing you with an incredibly top notch experience. And I’ve had a couple of people say, “Hey, is there a payment plan? Can I do this? Can I do that?” And so I did come up with something, just DM me and I’ll get to that info. As a reminder, so far we’ve announced Allie Webb as our keynote speaker. She is the founder of Drybar, which I am such a huge fan of Drybar. We also have Danielle Canty, co founder of Boss Babe. You know, the whole viral boss baby movement. Yes, she’s the founder and she will be joining us in Phoenix in October. Plus, we have Pauleana Reid, who owns a celebrity ghostwriting firm. She’s actually she’s the owner of the firm that’s ghostwriting my book. So my book will be out later this year as well. And her firm’s ghostwriting and she’s overall just a PR expert. She writes for Forbes Business Insider and giving us all the mother flippin tips on getting all the PR that we need. So trust me, like those are three of a million incredible speakers. Obviously, there’s not a million, but a ton of amazing speakers. I’m really, really excited to make our next announcement, which will be coming in the next week or two. So get your ticket now to Legalpreneur live. If you’re interested in possibly finding out how you might be able to get a free ticket. DM on the gram at Andrea Sager. Lol. Okay. You guys. LLC’s versus trademarks. I cover this a long time ago. It may have been like a year ago, maybe two years ago. I don’t know. Anyways, I wanted to cover it again because I’ve had a number of these questions come up lately. So why, if you have the LLC, why doesn’t that give you trademark rights? And if you have the trademark, why doesn’t that give you LLC rights? These are two completely different processes. They are completely exclusive of each other. So breaking it down, the LLC, a limited liability company, is filed with your state or with a state in the United States, with the LLC, you file it with your state and the state does a search and they may deny your LLC if the name is the same as another business in the state. Now this is where most people think, oh, I’ve already like the state approved it. They did their search. They said something the same or similar out there. Well, that’s number one. It’s only with the state where that matters. And typically the state’s only looking at like this same exact name. And if you’ve been listening to the podcast for any amount of time, you know that trademarks are not just looking at the same exact name. Trademark infringement occurs when there’s anything similar enough to where consumers are likely to be confused. Now with your LLC, the state is, they’re only searching in that one state. They’re not searching across the country, in other states or in other countries. They’re only searching in the one state. And if you have a clothing boutique, they could refuse your LLC name. If somebody has the same exact name for a mechanic shop. Two completely unrelated industries in the trademark world that would be able to coexist. You could have the same exact name. If you have a clothing boutique, you’d have the same exact name as somebody that has a mechanic shop. So there are two completely different processes now. So number one, laying it down again with LLCs. This protects you personally from liability for the debts of your company. The state only searches in your state. And they could refuse you for something that may still get approved with a federal trademark. If that happens where you do get denied for the LLC name, all you have to do is just come up with any other LLC name that will get approved and then file a DBA under that LLC with that initial name that got refused. That is perfectly fine. Now, on the other hand, we have trademarks. This is anything that identifies your branding. And again with LLCs, this actually doesn’t have to be what the public sees as your brand. A lot of companies have an overarching entity name that has nothing to do with their brand. You could literally have the name of your LLC be X, Y, Z, LLC, DBA, Andrea Sager Law. I’m making it up here, but your brand name does not have to be your LLC name. Going back to trademarks, this is your branding. This is how the public perceives your business. Infringement occurs when there is the same or a similar name where consumers are likely to be confused. So the goods and services also have to be related. This is why Delta Airline and the Delta, the kitchen sink faucet company, can coexist because they’re in completely different industries. They both have a federal registration, but that’s because they’re just in different industries. They have the same exact name, but different industries. They can co-exist because consumers are not likely to confuse the two because of how different the goods and services are. So when you file the LLC, it does not mean anything in regards to trademarks. When you get the trademark, it does not mean anything in regards to your LLC because it may not even be the name of your LLC. So if you have the LLC, you still need to get a trademark. If you have a trademark, you definitely need an LLC. A lot of times I’ll get the question, Hey, what do I do first? The LLC or the Trademark? It doesn’t really matter which one comes first. What I suggest is filing the LLC, getting that approved, and then filing the trademark in the name of the LLC. You can do it backwards, but a lot of people do want to file or file for the trademark and get that approved before filing the LLC because they don’t want to change the LLC name later. But I tell them, Look, you can still file a DBA underneath the LLC. So even if it comes back, hey, this is trademark infringement. You just file a DBA underneath the LLC. Now. With the trademark. You could file that first without the LLC, but you always want to make sure all of your business assets are in the name of the entity. So you file the trademark application and that’s as an individual as you are the owner, since you don’t have an entity yet. And then once you have that LLC approved, then you assign ownership of the trademark to the LLC. There’s a couple of issues with this or a couple of issues that people don’t like is, number one, you actually have to. Pay. Number one, there’s an there’s a fee for the assignment. And some people will come to me and they’re like, Hey, I want to make sure all of my personal information is removed from the Internet or from the Trademark Office website. It’s public record. The moment that application is filed, it’s public record and it can’t be removed like it won’t show you as the owner anymore. But there is a record of assignment with the trademark and it will always be there that you were the owner as the individual. So if you don’t want your information out there personally, don’t file as an individual from the beginning. I know. I just threw a lot at your. Hopefully you stayed with me the whole time. Key takeaways. An LLC is completely separate from a trademark. Both need to get done and I wouldn’t say, hey, this has to come before the other, but it’s a smoother process if you typically a smoother process if you file the LLC before filing the trademark, because then you don’t have to go back later and file the assignment. That’s my spiel for today. Don’t forget to DM me if you are interested in attending live. Here at Legalpreneur, we’re committed to providing a supportive legal community for all business owners. I know how scary the legal stuff can be. If you found this information helpful. I would be so grateful if you could share it with the fellow business owner. And quite frankly, it doesn’t cost anything to write, review or subscribe to the show. Your support helps me reach more listeners, which allows me to support more business owners in their entrepreneurial journey. Have any questions or comments about the show? Feel free to drop me a line on Instagram, I promise. I read all of the messages and comments and if you want to be a guest on the show or know someone that would make a great guest, simply fill out our application form and a team member will reach out if we think it’s a good fit. I’ll see you in the next episode.

 

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