California businesss broker Kenneth Sherman from Quantum Business Solutions Network offers this practical tip on protecting the name of your business.
Purchasing a Business Tip: Protect the name of your recently purchased business. "When a large portion of the purchase price is allocated to the name and “good will” attributable to that name, a buyer needs to properly protect that asset.
Incorporating does not provide any trademark protection for the business name. While incorporating prevents others from incorporating under the same name in that state, anyone can incorporate under a similar name in that state. They can incorporate under the same name in another state, or simply file a “fictitious business name” statement in a county within the same state. This means they can do business with the exact same name!
In order to retain the goodwill associated with a business name in its goods or services, trademark or service mark registration is the next step. However, you do not need to wait until your trademark is registered to begin protecting your right to its use. Where ever you use your business name you can stake your claim to the name as a trademark by adding a "™" at the end. This provides notice that you consider the name to be proprietary. Thereafter, once the business name is officially registered it receives the greatest possible protection and you may indicate this by including "®" at the end of the name.
Finally, even after registration, you must file periodic “Affidavits of Use” to demonstrate that the name remains in use. If you cease use of the mark for a period of years, you can lose ownership of the name as a trademark."
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