In general terms, it is advisable to tie the trademark’s ownership to an entity that will be using it in commerce. Most often this means applying for a trademark in the name of the business entity.
Benefits and shortcomings of applying for a trademark in business name
Three particular advantages can be associated with tying the trademark ownership with the business entity under which you sell / intend to sell the product and services.
Proof of using the trademark in commerce:Strictly speaking, trademark registration grants its owner the rights to use the trademark in commerce and protect the brand against identical as well as similar trademarks in the given category of goods and services and countries in which it has been registered. This implies that the entity using the trademark in commerce should be identical to the entity registering the trademark.
Ease of transferring the trademark ownership:Trademark ownership by a business entity simplifies the transfer of intellectual property rights in the event of selling the company as all associated rights are attached to the business entity.
Tax considerations:Since trademark registration is an obvious investment into the company, associated costs incurred can be claimed as business expenses. VAT is not charged on government fees.
At the same time, trademark applicants are often merely in the process of setting up their business entity, making sure that their desired brand name is not taken by the time this process is completed. In this scenario, registering a trademark in the personal as opposed to business name may be advisable.
Benefits and shortcomings of applying for a trademark in personal name
As pointed out in the previous section of this article, applying for a trademark in personal name can be advantageous under specific circumstances. This is mainly the case of emerging entrepreneurs who merely seek to secure the trademark rights for their future business venture. Given the time delay in setting up the business entity, a trademark registration in personal name can be effectively used to achieve this goal.
In line with the discussion of the specific benefits associated with the registration of a trademark in the business name, particular limitations of applying for a trademark in personal name need to be highlighted. These refer mainly to the practical setup of trademark ownership rights and the actual use of the trademark in commerce. Given the fact that it is often the business entity that is actually using the trademark in commerce to offer the specific products and services under this brand, an agreement between the owner of the trademark and the business entity using it should be established. This is of course merely a formality in the cases when the owner of the trademark is also the sole owner of the business entity.
Similarly, extra care is needed when selling the business entity, as the new owner will likely require access to intellectual property rights, including trademark ownership. This is once again a mere formality regarding the transfer of ownership.
Frequently asked questions
What is better - owning a trademark as an individual or as a business?
What is better - owning a trademark as a sole proprietor or an LLC?