Three worlds: Domain names, trademarks and trade names

Understanding the differences between the three can help you to avoid mistakes and properly protect your intellectual property

May 7, 2015
Nicholas D. Wells
InsideCounsel

When we talk about the brand or the identity of a company, we often think of these three things as being synonymous:  the company’s legal name, under which it is registered with a state government (its business name or trade name), the brand that the company uses to promote its products, and the domain name that the company uses to communicate online. Speaking informally, it is acceptable to think of these three as one and the same.

Legally, however, there are significant differences between trademarks, domain names and trade names. Understanding those differences can help you to avoid mistakes and properly protect your intellectual property.

Trade names

A company name is the name used to identify a business as a separate legal entity. It is registered with a state government and at the Internal Revenue Service, and is used on contracts and other legal documents. When the officer of a corporation signs an agreement, for example, she signs it as “CFO of XYZ Corporation.” Anyone wanting to check the legal status of that legal entity can investigate XYZ Corporation at a state division of corporations or secretary of state (just search online for “[State] business entity search”).

Trademarks

A trademark is a word or design that represents a source of goods or services in the mind of potential customers. A trademark is registered (ideally) at the United States Patent and Trademark Office and at the national trademark offices in countries where you do business. (Trademarks can be registered at the state level but that is rarely a wise choice.)

A trademark may be the same as the name of a company’s legal entity (its trade name), but it doesn’t need to be the same. A plumber might register a legal entity called Dave Jones Plumbing, LLC. But on his work truck he uses the moniker “Dave’s All Night Plumbing.” The public sees Dave’s All Night Plumbing as the trademark for Mr. Jones’ services. No one knows the trade name Dave Jones Plumbing, LLC except his accountant. Because Dave’s All Night Plumbing is what the public sees as a representation of Mr. Jones’ services, that is the trademark that he should protect.

Some businesses want to use a trade name that people will recognize. Often they plan to sell multiple products or services, each under a separate name. The trade name becomes the umbrella that ties multiple product names together in the minds of customers. In that situation, the trade name is being also used as a trademark.

Consider another example: Amazon, the giant online retailer. Most members of the public know about Amazon. They also know where to find it, at amazon.com. But if you enter into contracts with Amazon, you may find that the “company” uses a variety of different legal entities (each with a different name) to suit it purposes. For example, there are Amazon Web Services, Inc., Amazon.com Auctions, Inc., Amazon.com Baby, Inc., Amazon Payments, Inc., Amazon Overseas Holdings, Inc., and many more. Yet all of these related entities are known to the public under the brand (the trademark) of Amazon. There is no need to protect Amazon.com Baby, Inc. as a trademark, although there may be reason to protect Amazon Baby if that phrase is presented to customers to represent the goods or services offered by the company.

Domain names

Finally, consider domain names. A domain name is nothing but an entry in a database that corresponds to an internet protocol address. (For example, insidecounsel.com converts to 184.73.162.106, allowing your browser to contact a specific computer where web pages are stored.) Domain name databases are operated by private companies that have contractually agreed to operate in a certain manner. However, owning a domain name does not give you any trademark rights in that domain. It is only the good faith operation of a website that uses a given trademark that gives rise to trademark rights.

As many have found to their dismay, domain names are international in scope and are not closely tied to national trademark registries. Trademarks are registered only for specific goods and services; domain names are not. Thus, for example, only one person in the world can own delta.com, even though many companies own a trademark registration for the word DELTA for various goods and services.

If you own a trademark and another party registers a domain name in bad faith that includes that trademark (e.g., for the purpose of diverting your customers or reselling the domain to you at a profit), then your trademark rights are very helpful in showing that you have a legitimate right to use that domain name. But if another company with a similar name, but operating in a different industry, is using a domain name that you want, you have little legal recourse. (Just ask Delta Airlines about the challenges of obtaining delta.com).

By recognizing the differences between trademarks, domain names and trade names, you can plan ahead to check the availability of what you need, register what you use, and understand your legal rights in relation to each.