A business name is one of your company’s most valuable assets. It is the basis on which you build consumer confidence in your products or services, and provides an assurance of consistent quality to your clients or customers.
Because a business name establishes your brand and provides the foundation upon which you will build goodwill, ensuring you acquire and maintain all the rights and protections to your business name can be as important as choosing a name itself.
This, of course, means you’ll need to begin by filing an assumed name certificate. But beware: simply filing an assumed business name certificate in Texas does not prevent others from using the same name. And if someone registers a name before you, you could be infringing on another entity’s trademark.
Assumed Name Certificates in Texas
Whether you’re an entrepreneur with a fledgling start-up or an established brand with distinct divisions, using an assumed business name can help create the clear and recognizable brand that distinguishes your business and all it provides from others in the marketplace.
- An assumed business name is a name for your business that is different than its legal registered name.
- An assumed business name certificate is the document that serves as proof that your company has the legal right to use a specific name.
Often used interchangeably with DBA or fictitious business name, an assumed business name may be used for any number of reasons, including:
- Reputation and credibility: Having an assumed business name certificate can instill legitimacy in your company, and create a sense of transparency that comes with forming a clear legal connection between your company’s legal name and the assumed name you’ve chosen.
- Documentation to protect your brand: Filing a certificate of assumed business name can also establish documentation which connects your assumed business name with your company’s legal name. This established and verifiable connection can allow you to more easily lay claim to an assumed business name should disputes arise.
- Differentiating between business divisions: Rather than forming separate subsidiaries or a series LLC, multiple assumed business names can help you distinguish different branches or divisions within your company in a less structurally complex manner.
- Business banking: In order for your business to open a bank account and engage in business banking, a business name will need to be registered and the certificate presented to the bank.
No matter what reason you have for using an assumed business name, it is important to know that filing an assumed name certificate in and of itself does not bestow your company with complete and total ownership of a name.
To protect your business name and its goodwill, it is essential that you perform your due diligence, properly file a certificate, and comply with all applicable laws. Exploring preemptive protections after you file an assumed name certificate can also help you protect your desired name(s) and reduce risks for potential problems involving alleged infringement.
Assumed Name Due Diligence: Searching for Existing Use
When selecting an assumed business name, the first and most important step is to determine whether that name is currently being used. You can begin your search with the Texas Secretary of State and the county where your principal office will be located. Additionally, you can search trademark and service mark registrations on file with the United States Patent and Trademark Office.
Performing your due diligence when selecting an assumed name can help you identify whether a name is already be in use and, if so, whether the company that uses it does so in an industry or geographic area in which you do or plan to do business, or provides products or services similar to your own.
If you choose a name that is in existing use by a company which provides similar services, is in a similar industry, or bears any amount of similarity so as to create the risk of confusion among customers, there may be potential exposure to claims of trademark infringement.
Filing Your Assumed Name Certificate
If your search returns no existing use of a desired name, you can move forward with filing an assumed name certificate with the Texas Secretary of State. An officer, partner, member, or representative for your company must execute the certificate by completing the necessary forms and paying a filing fee.
In addition to filing with the Texas Secretary of State, you should also file an assumed name certificate with the County Clerk in the county where your principal office is located. Most counties in Texas require companies seeking an assumed name to complete forms that are different those used by the Secretary of State.
An Assumed Name Certificate Does Not Guarantee Exclusive Use
An assumed business name certificate may provide the right to use your assumed name to conduct business in Texas, but it does not guarantee exclusivity or shield businesses from allegations of infringement.
An assumed name certificate:
- Does not provide the exclusive right to use an assumed name.
- Does not prevent others from using an assumed name you have chosen.
- Does not permit businesses to use an assumed name in a manner that violates the law or infringes on its rightful use by others.
Because the Texas Secretary of State does not issue rejections of assumed name certificates on the basis of existing use, businesses using or looking to use an assumed business name have the burden of ensuring a desired name is not currently in use by another business, or registered as a trademark.
Further, businesses that want to ensure exclusive use of an assumed name should take steps to protect it after a certificate is filed. One option is to apply for trademark rights.
Trademark Registration & Protecting Your Business Goodwill
Although there are many requirements for registering an assumed name as a trademark in Texas, businesses will generally be permitted to do so if:
- They are using an assumed name prior to applying for a trademark registration
- The assumed business name is unique and distinctive; and
- There exists no significant similarity to existing trademarks that would create confusion among consumers, cause them to mistake the business for another, or be deceptive.
Trademark registration puts other business entities on notice of your rights to an assumed business name. It can also establish an enforceable cause of action against entities that infringe on your trademark after its registration.
It is important to note, however, that there are many nuances to trademark law and infringement. That includes not only problems with assumed names registered as trademarks in other states, but also infringement allegations that claim your business is piggybacking on another’s goodwill by using a similar name, even if not in the same exact industry.
“For example,” says Managing Partner Trey Hendershot, “A recent case was brought against a whiskey distillery that shared part of its brand name with a consumer brand in another industry. This other brand is contending that the distiller is infringing on its trademark rights because consumers may assume the two brands are related.
“They allege that the distiller is piggybacking on their goodwill even though it’s not the exact same names, and it’s not the exact same industry,” Hendershot explains. “But it’s close enough that they filed a trademark infringement claim against the distiller, and that company now has to defend against this claim in court.”
Performing due diligence can help avoid these types of problematic issues, and help you protect your company’s brand should another’s use of a similar name or the exact name in a related industry or nearby location cause problems in the future. Registering an assumed name as a trademark immediately after filing an assumed name certificate, for example, could allow a business to dissolve another’s trademark claim.
Comprehensive Counsel for Businesses Throughout Texas & Beyond
Using an assumed name can provide a number of benefits for businesses and entrepreneurs looking to establish a brand, but it can also create significant exposure to claims of infringement by other business entities that have established rights to a name.
Filing an assumed name certificate alone is not enough to protect your brand or your business. A sound foundation begins with proactive intellectual property protections and comprehensive counsel from experienced attorneys.
At Hendershot Cowart P.C., our Houston-based lawyers leverage over a century of collective experience to help businesses navigate the process of filing an assumed name certificate. This includes performing due diligence to check for existing use, devising strategies to proactively acquire and maintain rights to a name, and ensuring the ability to enforce those rights should that name be infringed upon by others.
Hendershot Cowart P.C. offers a range of business, trademark litigation, and intellectual property law services. To speak with an attorney about your potential matter, call or contact us online.