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Last week, I discussed equitable remedies in breach of contract situations.  I would like to shift gears for a while and do some information specifically aimed at startups, as this upcoming weekend is Startup Weekend Honolulu at the Box Jelly, coworking space.  If you have not signed up, you can check out the info here, and recommend trying it once as it is a very unique experience and you meet a lot of people.
My goal with the next month’s worth of posts is to deal with frequent misconceptions by people who are starting up their business.

Anyway, this post and the next one is aimed and clearing up some of the notions about the various “trade” legal aspects. Namely, I will be discussing the difference between trade names and trademarks, and what is a trade secret. I frequently run across clients and people who are very confused when they first start out their business and it is crucial for your legal protection of your business that you get the differences.

Trade Name vs. Trademark: Explaining the Difference

A trade name is NOT the same as a trademark.  While, both are definitely a part of trade and business they both operate and serve different roles.  Let’s use an example to walk through the way these two legal concepts are different.

Let’s say Mr. Joey Nakamura wants to sell his specialty brand of shave ice.  Let’s say Mr. Nakamura ignores my very first Draw the Law post, and does not want to create some kind of business structure with limited liability.  Therefore, he is a sole proprietor, but he does not want to sell his specialty brand of shave ice under his personal name.  So he registers a trade name and does business as JN Specialty Shave Ice.  This is his trade name.

While, developing his shave ice Joey then decides to create several unique flavors that are his signature products.  So he creates the Joey Jabuticaba and Nakamura Nectarine and begins packaging and labeling the bottled flavors as such.  These products in the marketing world are his brand names, which are advertising and marketing terms, but in the legal world these are his trademarks.

Thus the difference is a trade name functions to identify the particular business, and for a lot of people they know this as “doing business as”, but the concept actually includes corporate, llc, partnership, and fictitious names.  It is simply the name you are using to identify your business.

Trademarks, are any words, names, symbols, or devices (or a combination of those things) that are used to identify and distinguish your goods from those of others and to indicate the source of the goods (or services for service marks), even if the source is unknown.

Where the Confusion Comes In

Why do people mix these two up?  Well, it is very easy because many businesses use their name to identify their goods and services, for instance here in Hawaii, “American Savings Bank” and “Hawaiian Airlines” both are a trade name and trademark.  Your name can function both as a trade name and as a trademark, so long as it does not infringe on the rights of another.  Furthermore, a single business can own dozens of different trademarks to identify their various brands.

Why is the Distinction is Important?

Well, for some starting businesses they start out and register a business, then want to use another name.  Therefore they register a trade name thinking they are protected from trademark infringement.  As shown above, they are different and function so.  Further, when you start using your trade name you may be giving rise to trademark infringement on your part.  That’s right your name may be causing confusion in the marketplace because it may exist as someone else’s registered trademark.   At that point you would have to get a new name, which as experienced marketers will tell you is a blow to your marketing strategy and will force a costly re-branding.

So be careful when choosing your business name and be careful on how you market your product or service. See you next week, when I talk about trade secrets.  Startup competitors I’d definitely say you might want to check that one out as well.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.  Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.


Last post was about creating a Social Media Policy with respect to the employer-employee relationship.  The idea is to minimize potential suits between the employee and employer.  Issues like prohibiting certain behaviors, such as posting negative comments or former employees taking company information should be the concern with an internal policy.

However, many businesses are coming to realize the potential power of blogs, Twitter, and Facebook and readily use social media as a marketing and advertising tool.  And why not?  It is free, relatively easy to set-up, and allows you a good amount of control over content.  However, just like internal disputes you can quickly wind up with external disputes with other companies, commenters, and the like over issues of intellectual property infringement and defamation.

Advertising Statements: Puffing Yourself Up and Tearing Down the Competition

FTC and Endorsements: Disclose Your Relationship

Generally, marketing, advertising, and public relations specialists are comfortable with using mere words of puffery.  They also know that it has been the law that if an ad features an endorser who’s a relative or employee of the marketer or if that endorse has been give something of value in exchange for praise of the marketer’s product or service the ad must disclose the connection.  The point is that knowing about the connection helps the reader or watcher evaluate the quality of the endorsement.

This attitude comes into play when using social media as well.  Specifically, the FTC has issued guidelines about how bloggers, and social media specialists talk about a company’s product or services.  This includes your employees, as well as any marketer, advertiser, or in generally someone speaking on your behalf and you give them something expecting endorsements.

Say you have a new delicious musubi (rice ball) that you want people in Honolulu to know about.  One of your employees is a well-known food blogger.  You give her a sample of the product with the intention that she is to eat it and then rave about it on her blog.  If she does not state that she is your an employee you would be violating the FTC guidelines.

Defamation: Don’t Start Ugly Rumors

On the flip side is going after the competition.  If you or your employees typically engage in discussions via Twitter, Facebook, or comments on your company’s blog you may sometimes start joking with one another.  It is easy to see that this leads to making fun of the competition’s products and services.  However, going too far may mean making false statements that damages their reputation.  In this situation, you may be slapped with a defamation suit.

The general better policy in a situation like this is to remind people to be positive in their postings rather than taking the low road.  Above all do not engage in the rumor mill thinking that the amount of information going out there will protect you.  Once something gets sent out onto the Internet it is almost impossible to take back.  Just look at some of our politicians and celebrities to realize the truth of that fact.

Intellectual Property: Using Other Works

Many people love to share images or quotes on their Facebook posts, Twitter feeds, or blogs.  Generally, they search the web for a cute image and slap it on their post and think they are done.  While, they think that is ok, what they are unaware is that they are infringing on the person who took or made that image’s intellectual property (IP) rights.  When it comes to business the stakes are higher because the owner believes you are using their working to make a profit.

Copyright and Trademark Infringement

In general, when using images and phrases the best policy is to create your own or license it out.  Do not take images and words from another’s website and slap it on your own trying to claim it as your own.  For a prime example of this you can look at my own blog.  Many of the images I use are stock photos,  if I were to go to another law firm’s website and start taking their images and pdf files and posting them here, and claiming them as my own those would be violations of the firm’s intellectual property rights.  While, there may be a  “fair use” exemption it is less likely you will get to use it for your money-making company blog, Twitter, or Facebook page.

Best policies are to create or license the images you want to use, be sure to use attribution links and short quotes from another site.  The last thing in the social mediaverse is you want to be known as a thief of people’s IP.  Always clear use of photos, music, works, etc . . . if you don’t know where they come from.

By the way, remember that people do have publicity rights this includes their image, likeness, and name much like a company controls their trademarks and copyrights, celebrities and people control their image.

Last Words

Next week, I will wrap-up this section with some general tips of crafting a policy and what to think about and some other miscellany.  In general, if you are concerned or feel that your company and employees need a re-training or updating on social media and the laws talk to an expert and have an attorney review and draft your policies.

Don’t forget if you enjoy this series or any of the other series on my blawg feel free to subscribe in the right-hand corner of this page to receive e-mail updates on posts.  If you are on Facebook be sure to “Like” “Ryan K. Hew” to get updates there as well.

See you next time!

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*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.