- Hi everyone, I'm Attorney Aiden Durham
with 180 Law Co. in Denver, Colorado,
and you're watching All Up In Yo' Business.
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On this episode of All Up In Yo' Business,
we're gonna talk about which comes first,
an LLC or a trademark?
Or in other words, should you focus on getting a trademark
before you start forming your business?
But before we get into it,
don't forget to like, subscribe, and share
and hit that little bell button
so you get notifications anytime I post a new video.
And don't forget to check the description
for links to more information and resources.
You can download my free guide,
free tips for trademarking your brand,
and you can also get more information
about my trademark services if you're looking
for more help with getting a registered trademark
for your business.
All right, so it's probably no big secret
that there are a lot of things
that go into starting a business.
A lot of steps that need to be taken
and a lot of to-do's that need to be checked off.
And it can often be pretty confusing,
figuring out the proper order for doing all of that.
What do I do first?
Do I worry about this?
Or do I need to take care of this first?
Lots of questions come up
and a big one has to do with trademarks
and whether you should focus
on getting a registered trademark
or applying for a trademark,
or if you should first start
with actually forming the business.
Because I work mostly with LLCs
and a lot of single-member LLCs,
I'm gonna use LLCs for these examples
and talk about LLCs.
But what I'm talking about really applies
to any other kind of business entity,
not just specifically LLCs.
So if we're talking about starting a business
and we're gonna operate as an LLC, the big question is,
"Do I form the LLC first
or do I file for the trademark first?"
As with most things, there's no one right answer.
It always, always depends on your situation,
your circumstances, all of that.
But generally speaking,
what I typically recommend is forming the business first.
Getting the LLC formed first
before you worry about filing the trademark application.
The reason for this is because the trademark is going
to be owned by someone.
And normally we would want the LLC
to be the owner of the trademark
because the LLC is gonna be the one using the trademark.
So let's say we file the application
for the trademark first, since the LLC doesn't exist yet,
it can't be the applicant.
It can't be named as the owner of the trademark
because it doesn't exist.
So in that case, you as the individual
or individual owners of the business
would have to be the applicant and the owner.
And that's fine, but if you are the owner of the trademark,
but then your business is going to be using it,
you would have to assign
or transfer the trademark ownership to the business.
You can't really do that while the trademark is
in the application process.
Once the trademark has been registered,
then it's fairly easy to transfer it
from the owner to the LLC.
But you know, it always again,
kind of depends on the situation.
So because of that, that's really the main reason
that we typically want to set the LLC up first.
It's so the LLC exists so it can own the trademark.
Now the little one exception that I make to this
is usually with single-member LLCs.
If you're gonna be the only owner,
then in the end it's not really a big deal
if you are named as the owner of the trademark initially.
Because then, like I said, once the trademark is registered,
you can assign or transfer that ownership to the LLC.
And that can be part of your member contribution
to the LLC, is this intellectual property,
this trademark registration.
But the reason I say that specifically
for single-member LLCs is because when there's more members,
more people involved,
it can potentially cause a problem later on
if we're trying to transfer ownership.
Or let's say there are multiple members,
and one of the members is named as the owner.
If that member decides to pack up and leave or hit the road,
then it may not be easily possible to get that ex member
to transfer ownership of the trademark to the LLC now.
Or it is possible to have multiple owners of a trademark
so if multiple members are the owners,
then it's just more that goes
into having to make that assignment or that transfer
because we're dealing with more people
who have to agree to it now, essentially.
So, in the end, overall,
it is best to start with forming the LLC
or getting the entity up and running and formed
before you worry about filing a trademark application
or pursuing trademark registration.
But!
But, but!
The big thing with that is that just
because we're not worrying about the trademark just yet,
doesn't mean we don't need to worry
about the trademark just yet.
This is gonna be especially important
if the name of your LLC is going to be the trademark.
It's going to be the name or the brand
that you're gonna do business under.
Something that often kind of gets people confused is
a business name or an LLC name
isn't the same as a trademark at all.
You can have your LLC be registered under some name
and then your trademark
can be something completely different.
You don't necessarily have to do business
under the name of your LLC.
You can use a trade name or a DBA.
You can have different brands under an LLC.
So if the LLC name is what you're going to use
as your trademark, if that's going to be the trademark,
if that's going to be the brand, then you do want to
at least do some preliminary trademark clearance
before you commit to a specific LLC name.
Because with LLC registrations,
there's not gonna be checks and balances
like there are with trademark registrations,
where an examining attorney tells you,
"This trademark is available
and you can have the registration."
That doesn't happen with LLC registration.
So just because you register the name under an LLC,
doesn't mean that it's going to be available
for you to register as a trademark.
So if you're in the process of setting up an LLC
and that LLC name is what you are going to use
as your trademark, then at least,
do a good thorough Google search.
Get on the USPTO's website,
they have the TESS, T-E-S-S search database
that you can do a pretty simple search of any registered
or pending trademark applications.
At least get a good idea of if the name
that you wanna to use for your LLC
and trademark is at least available.
Best case scenario, of course,
would be to have an attorney perform a full clearance search
for you before you even worry about the trademark,
so that way we get the trademark down,
then we know we're in the clear for filing the trade.
I'm sorry, we get the LLC done,
and then we know we're in the clear
for filing the trademark.
Having said that, though,
in the end, let's say you file and form your LLC,
and then you get around to thinking about the trademark
and you find that that trademark's actually not available,
you won't be able to register that trademark.
For most states,
the process of amending your LLC's name,
it's not very difficult.
It's not a especially costly or time consuming process.
So often, worst case scenario,
if you do want the LLC's name
and the trademark to be the same,
you can always go back and amend or change the LLC's name
if the initial name isn't available
as trademark registration.
I know that this comes up
because a lot of people worry about,
"I wanna get my trademark protected
before I put it out there."
So that's kind of the underlying thought is,
"Well, I don't even wanna start this LLC
because I don't want the name to be out there
if I don't have a trademark registration."
But the problem with that is that you have
to put the trademark out there
before it becomes a trademark.
I'm sure you guys have heard me say this before.
If you haven't, you'll hear me say it again,
but a trademark isn't a trademark
until it becomes a trademark.
So just because you file the application for the trademark,
doesn't mean it's a trademark
if you're not actually using it as a trademark yet.
So just because we filed the application,
that's not giving you really a whole lot of benefit.
It's giving you some benefit
because it's getting you in the system,
getting the trademark in the database
and it's getting that ball rolling.
But if you file the application
and never start doing business,
never start using the trademark,
then you're not gonna have a trademark
because you have to be using it
in order for it to be a trademark.
And finally, just to clear up a little bit of confusion
that I often deal with,
LLC registration, registering an LLC or a corporation
or any other kind of business with your state
or at the state level does essentially nothing
for trademark protection.
LLC registrations and trademark registrations
are completely separate and different things.
If you register an LLC,
that doesn't mean you have a trademark in that name
or any real kind of trademark protection.
Again, you have to actually be using the trademark.
It's only when you use the trademark
that it becomes a trademark
and some trademark rights are attached.
So to summarize, if we're wondering what comes first,
the LLC, or the trademark,
typically, it's gonna be the LLC
that we wanna take care of first.
That's all for this episode, folks.
Drop a comment below, let me know what you think.
And again, don't forget to check the description
for additional information and resources.
You can also learn more
about my all-inclusive trademark registration package
called Brand Bombshell,
where I take care of every step of the process
from clearing the trademark to everything
that comes along in the application process.
You can learn more about that,
or if you're a DIY-er a bit on a tighter budget,
you can check out my online course
called BRANDISH: DIY Your Trademark Application,
where I teach you the step-by-step process
for preparing and applying for a trademark without a lawyer.
Thank you all so much for watching.
I'm Aiden Durham, and I'll see you next time.
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