This question (an extract from an email I received from a new subscriber during week) is a good illustration of how confusing purpose of and difference between business names and trademarks can be for small business and others without ready access to an army of lawyers to lead them through maze. Add your domain name to mix and it becomes as clear as mud.

In this article, we'll look at what business names, trademarks and domain names are (and aren't), what you can and need to do to protect them and issues to think about when deciding upon what to choose for your business and domain names and whether trademark protection is appropriate (or even possible).

YOUR BUSINESS NAME

If you're going to conduct your business under a "fictitious" name, i.e., one other than its legal name, you will need to register fictitious name with appropriate government agency in your state. This usually means your local county recorder's office but, depending on where you live, it may mean your state's Secretary of State Office. In countries other than U.S., appropriate body may be some sort of government Department of Small Business.

So what's your "legal" name? If you're conducting business as a sole proprietorship, your legal name is your name, i.e. Fred Smith. If you're any sort of other legal entity such as a corporation, limited liability company, limited partnership etc., legal name of your business is name of your corporation, company, or limited partnership.

If you conduct business under your own name or that of your corporation, limited liability company or limited partnership, you do NOT need to register a fictitious business name with State because you are not conducting business under a fictitious name, you are conducting it under your business's legal name.

=> Legal Purpose of a Fictitious Business Name

The reason you must register a fictitious business name to operate a business under a name other than your business's legal name is to protect consuming public - those members of public who come in contact with your business - as well as other parties such as suppliers.

The purpose of registration is so that those who deal with your business can search for and identify person(s) "behind" name. As a fictitious business name is not a legal entity, it does not have contractual capacity (i.e. it cannot enter into contracts in its own name). A consumer wanting to do business with your business needs to be able to verify that person with whom he or she is contracting has authority to enter into contract as business entity. By searching fictitious business names register, consumer can find out who is "behind" business, as that is party with whom he or she will be contracting (and, sometimes, suing if transaction goes bad!).

Example: Alfreda Smith conducts her florist business under registered fictitious business name, "Blooming Right". Florist Supplies, Inc. wants to enter into a contract with Blooming Right to supply Blooming Right's stock of tulips. As Blooming Right is not a legal entity and only a DBA ("doing business as", another term for a fictitious business name), Blooming Right does not have legal capacity to enter into supply contract with Florist Supplies, Inc.. (Florist Supplies, Inc., of course, being a corporation - as evidenced by "Inc." - is a legal entity, and therefore has contractual capacity.) For this reason, Florist Supplies, Inc. will only be prepared to contract with Alfreda Smith, legal entity behind Blooming Right. Florist Supplies, Inc. identifies legal entity with contractual capacity by searching fictitious business names register. Accordingly, supply contract finally entered into will be between Florist Supplies, Inc. and Alfreda Smith, d/b/a Blooming Right.

You should also know that you won't be able to open a bank account for your business unless and until your fictitious business name is registered with state.

Just because you've registered your business name in your county doesn't mean that someone else can't register same business name in another county. Registration is only designed to allow people who deal with your business to identify you as person behind that particular business. It doesn't give you exclusive use of that name for all purposes in all areas. For this reason, if your business name is also your business's "brand", you should also register it as a trademark, if possible.

TRADEMARKS

As is evident from purpose of registering a fictitious business name, a business name is NOT a trademark and a registered business name will generally NOT operate to protect name from use by others (except as an identical or deceptively similar business name in same county). So how do you protect your business's "name" if it also identifies and distinguishes source of your goods or services from those of your competitors'? The answer is federal trademark registration. (Although you can also register trademarks at state level, state registration confers only limited benefits and should be considered only if federal registration is not possible).

=> What is a Trademark?

As suggested above, a trademark is either "a word, phrase, symbol or design, or combination of words, phrases, symbols or designs, which identifies and distinguishes source of goods or services of one party from those of others." (http://www.uspto.gov/web/offices ac/doc/basic/basic_facts.html) A service mark is same thing except it relates to source of a service rather than a product.

=> Registration Not Required

A trademark (or service mark) does not need to be registered to attain status as a mark i.e. unregistered trademarks are recognized by common law. If you have used a distinctive trademark (that you own) in commerce, then you probably have a common law trademark already.

Doing business on Net can be fraught with legal perils for those who act unthinkingly or unknowingly. In some situations, laws governing cyber activities are clearly defined and reflect laws that govern our activities in real world. In other cases, Internet is still a "gray area", and laws will be established through outcomes of court cases.

Although situations differ, as do laws in various jurisdictions, following tips might help you stay clear of trouble:

1. Registering a domain name doesn't prevent legal challenges to your right to use that domain name. Many a web site owner has been dismayed to hear from a company claiming his or her domain name is a trademark violation. To avoid problems in this area, conduct appropriate searches before registering, and consider registering your own domain name as a trademark. Businesses that register domain names can help you assess your options.

2. You risk copyright violation if you copy content, graphics, layout, name, look or feel of another web site without express permission. Several countries of world, including Canada, and US, have signed an international copyright convention that protects copyright in member countries. If discovered in violation of copyright, your penalty could be as small as being asked to remove offending material to as large a penalty as a court might see fit to award.