Trademark Ownership: Personal or Business Filing?

When establishing a trademark, a critical decision is determining the proper owner of the mark–should it be you personally or your business entity? This decision affects legal rights, enforcement capabilities, and even the brand’s perception. 

Here’s a detailed look at the considerations for both personal and business trademark ownership.

Individual Ownership

1) Sole Proprietorship. If you’re operating as a sole proprietor, filing under your name might seem straightforward. However, converting to a business entity is often recommended for liability and organizational benefits.

2) Intent-to-Use Applications. If you’re in the process of setting up a business and haven’t yet started using the mark, filing as an individual can reserve your rights until your company is ready.

Benefits:

(*) Simplicity. Filing under your name requires fewer administrative steps.

(*) Direct Control. You retain full control over the trademark decisions.

Drawbacks:

(*) Personal Liability. Legal claims against the trademark could target your personal assets.

(*) Limited Professionalism. A personal name as a trademark may appear less professional.

Business Entity Ownership

The two most common business entities are Limited Liability Companies (LLCs) and Corporations.

Benefits:

(*) Limited Liability. The business entity separates personal and business assets, offering protection in case of legal issues.

(*) Branding. Establishing a trademark under a company name enhances professional image and brand identity.

(*) Ease of Transfer. Transferring ownership of the trademark is simpler if it’s under the business entity, especially during a company sale.

(*) Tax Advantages. Costs associated with trademark registration can be claimed as business expenses.

Drawbacks:

(*) Administrative Complexity. Setting up and maintaining a business entity involves additional tasks and costs.

(*) Loss of Personal Control. Decisions regarding the trademark may require approval from other stakeholders or board members.

Joint Ownership and Partnerships

If multiple individuals are involved (e.g., partnerships or joint ventures), determining the proper owner can be complex. Joint ownership is possible but may introduce risks such as difficulties in transferring ownership or potential conflicts among partners.

Enforcement and Legal Considerations

The owner of the trademark has the right to license, assign, and enforce the mark. Only the registrant (or their legal representatives) can sue for infringement. Misidentifying the owner on the application can invalidate the registration, making it impossible for the true owner to enforce their rights.

Getting It Right from the Start

Choosing the correct ownership structure at the outset is crucial. 

Deciding whether to file a trademark under your name or your business entity depends on your specific circumstances, business goals, and legal considerations. Each option has distinct advantages and potential drawbacks, and making the right choice is essential for protecting your brand and maximizing its value.

For personalized advice and assistance with your trademark application, contact D’Ambrosio & Menon PLLC today.