Trademark Protection for Small Businesses

• Publication year: 1998
• Pages: 57
• Citation: Vol. 27 No. 11 Pg. 57

27 Colo.Law. 57 Colorado Lawyer 1998.

1998, November, Pg. 57. Trademark Protection for Small Businesses

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57

Vol. 27, No. 11, Pg. 57

The Colorado Lawyer
November 1998
Vol. 27, No. 11 [Page 57]

Specialty Law Columns
Business Law Newsletter
Trademark Protection for Small Businesses
by Linda S. Lodenkamper

Column Ed.: David P. Steigerwald of Sparks Dix, P.C., in Colorado Springs - (719) 475-0097

This newsletter is prepared by the Business Law Section of the CBA to apprise members of the Bar of current information concerning substantive law. This month's article was written by Linda S. Lodenkamper, a sole practitioner in Golden, (303) 642-3078

While large and small businesses have similar legal issues small businesses have characteristics that deserve special consideration by their lawyers. Entrepreneurs, as much or more than others, like to avoid litigation while saving time and money. They prefer plain English to legalese, and short documents to long. Legal concerns are usually at the bottom of their priority lists. Therefore, prevention straightforward documents, gentle prodding, and early dispute resolution are key components of small business representation. This article focuses on such representation in the trademark, trade name and domain name areas.

Trade Names

A trade name identifies a business; a trademark identifies the source of a product or service. Trade names can be used as trademarks, and often are in the case of small businesses. Larger businesses may own many trademarks. For example, Proctor & Gamble owns the trademarks Tide® and Crest®. Because small businesses often use their business names as trademarks, lawyers should take extra care in helping choose and register such trade names.

There are two databases for trade name registration in Colorado. Partnerships and sole proprietorships register with the Department of Revenue,1 while all other business entities register with the Secretary of State. Registration under the entity's organizational statute is sufficient unless it will be doing business under a different name. In that case, a business also must file a trade name certificate.2

Currently, Colorado law does not require these agencies to refuse registration if the same or a similar name appears in the other agency's database. Although the Secretary of State is statutorily bound in most cases to refuse registration of a name that is the same or similar to a filed trademark or the name of another entity in their file,3 statutes do not impose the same obligation on the Department of Revenue.4 Hence, while small business clients may believe that any registration bestows exclusive rights to that name in Colorado, there is no such guarantee.

This statutory structure creates myriad intellectual property problems, as illustrated in the following examples.

Example 1: Client A registered the name XYZ Co. as a corporation with the Secretary of State in 1990, and has been advertising and building goodwill under that name ever since. A was unaware at the time of such registration that B had registered the name XYZ Co. as a partnership with the Department of Revenue in 1980. B has been operating under that name ever since and operates a business similar to that of A and in the same geographic area. If B sues A, A will probably have to change business names and the goodwill that has been built up under A's old name will be lost.

Example 2: C registers Widgets as a trade name with the Department of Revenue in 1990, unaware that Widgets has been previously registered with the Department of Revenue. C loses...