Volume 5 Issue 6 -- November/December 2001
When is an Assumed Name a Trade Name? When is it not?
Many businesses use a variety of different “names.” A business may be formally organized or incorporated under one name, but use a different name for virtually everything B identifying its products, signing contracts, etc. A business that almost exclusively conducts its business under a name that is different from the entity=s official name, as recognized by a state, may be using what in Virginia is called an Assumed Name.
Dan Newland, Inc., a famous jelly maker located in Manassas, uses the catchy name ZZrd=s for everything. Something the Corporation should know is that, without taking appropriate steps, it may be in violation of Virginia=s “assumed name” statute. To remedy this, Dan Newland, Inc., can file a Certificate of Assumed Name at the local Court House. The Certificate is certified by the Clerk of the Court and copies are filed with the County or City and the Virginia State Corporation Commission (“SCC”).
If Dan Newland, Inc., wants to do business in all of Virginia=s local jurisdictions under an Assumed Name, it may have to file more than 125 Certificates of Assumed Name! A simpler alternative, of course, is to change the name of the corporation from Dan Newland, Inc., to something like ZZrd=s, Inc.
Many businesses that are organized under one name may use different names or logos for specific purposes B such as identifying their products or services. In most instances, using a fictitious or made-up name to identify products or services is not the same as conducting business under an Assumed Name. For example, suppose Dan Newland, Inc., conducts its business under that name but sells its famous jellies only under the name ZZrd=s.
This is not conducting business under an Assumed Name but rather using a “brand name” or “trade name” to identify a particular business=s goods and wares. Hence Dan Newland, Inc., would not have to file Assumed Name Certificates in order to sell its ZZrd=s brand jellies throughout the state.
Regardless of whether businesses trade under an Assumed Name or merely use a brand name to sell goods or services, most businesses are, or should be, concerned about protecting that name B i.e., preventing would-be competitors from using the same name.
Names and the use of them can be elusive. Let=s assume that, for reasons that defy belief, IBM (clearly a protected well known international name), forgot to register in Virginia. Irving B. Mooron, whose initials are “IBM,” learned of the omission and decided to form a Virginia corporation called IBM, Inc.
Let=s further assume that someone at the SCC was asleep at the wheel and approved the articles of incorporation for Irving’s corporation, IBM, Inc. Could Irving freely use the name IBM without being sued by the real IBM? Of course not.
So what=s the message? When forming a business or registering an Assumed Name, you should check to see if the name is already being used. However, if you want to use a name or logo to protect an identity for a product or service, you must take other measures.
There are federal and state “trade mark” and “service mark” laws as well as a body of non-statutory law “common law trade marks” that need to be explored to protect the product name, such as ZZrd’s jelly.
As the admittedly extreme Mooron-IBM example indicates, getting a corporate or Assumed Name does not guarantee the right to use the name on a product or service or to prevent others from using the same name. A better form of protection, if a business intends to invest significant resources in a distinctive name, logo, or brand, is to use trade mark laws.
This brief treatment of this subject cannot delve into the many intricacies of entity names and trade marks. My objective is to remind the average business person not to rely too heavily on entity names and Assumed Names to protect the special identity of a product or service that is better protected by the use of trade marks. If you have questions, give us a call.
Published by the law firm of Newland & Associates, PLC
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