Regardless of what industry your business is involved in, the name you conduct your day-to-day operations under is one of the most validating and important components of your corporate identity. It is vital to the process of establishing your reputation both inside the industry and amongst your customer base.
When it comes to lenders and similar financial services entities, the affiliated name or logo symbolizes the organization’s reputation, and obtaining a trademark can offer a certain degree of protection to the goodwill these identifying marks represent.
With the number of financial services firms being formed at an almost exponential rate, safeguarding the uniqueness of their names is presenting a novel legal challenge. The U.S. Patent and Trademark Office (USPTO) reported that there were in excess of 5,000 applications or registrations on their books in May 2020 that were associated in some way with financial services. Locking in a name that sets you apart from the competition and subsequently protecting that name via trademark registration can simultaneously establish and promote your reputation.
Settling on a Name
A key step in the creation of a new financial services entity is selecting a name to go by. A firm should have a meaningful name that sets it apart from the competition as there are a number of adverse things that can occur when a firm settles on a name that is similar to another entity’s. If the similarly dubbed business experiences a public relations nightmare, potential customers may conflate them with your business and you may experience a dip in revenues through no fault of your own. Even worse, if the names are too identical, the other party could also sue you for infringement, which will be expensive and time-consuming to resolve.
To mitigate these risks, it’s always advisable to consult with a trusted trademark attorney who has a proven track record of success with several clients in the same industry. This professional will be able to conduct a risk assessment and provide you with strategies for reducing any residual risk. For example, it is typically best to steer clear of names that merely describe what the firm does, as there are legal restrictions against the use of descriptive terms as corporate trademarks.
Understanding Trademark Benefits
After you’ve completed the trademark search and selection process and ensured there are no potential legal conflicts, you should take advantage of the protection afforded by the federal trademark registration process.
Federal trademark registration provides several legal benefits including, but not limited to, the following:
- Grants right to use the symbol or logo on a nationwide scale when involved in the services/goods specified in the registration. Unregistered—otherwise referred to as “common law”—trademark rights only offer infringement protections in the geographic locality in which you conduct business.
- Validates the logo and the fact that the registrant is the exclusive owner of the entity. This typically makes it more efficient and less expensive to file infringement claims.
- Creates a public record of the registrant’s rights. This functions to dissuade others from attempting to copy a similarly designed logo.
- Provides a quasi-affirmative defense against competitor’s allegations of trademark infringement.
- Prevents others from registering overly similar marks, as the USPTO will generally decline registration of logos and names they believe will prompt confusion with previously registered names/marks.
- Creates a basis for establishing foreign registration of the logo/name, which is essential for any corporation that conducts business internationally.
Although it is not required to hire an attorney to file a trademark registration application, completing the process can be complicated and time-consuming for the inexperienced. Accordingly, retaining a competent and knowledgeable trademark lawyer to register your name or logo on your behalf is advisable to save you time and ensure there are no unanticipated issues.