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So, you've decided to rebrand your business. Or you've just heard our podcast episode on rebranding. What now? What steps do you need to take to protect your brand and your business from the innumerable pitfalls inherent in rebranding an existing business or product?

The scope of your rebranding efforts will vary greatly depending on your individual business. A rebranding could be as simple as tweaking your existing logo to give it a more modern look. Or perhaps your business has grown to provide new and additional services, and you want your brand to reflect your increased market presence. Maybe rebranding is necessary because you failed to protect your original business.

Whatever the reason, your brand, whether that means your name, your logo, advertising slogan or social media hashtag, is valuable intellectual property, and you should protect it under federal trademark and copyright law.

Trademark Protection for Your New Brand

When undertaking a rebrand, there are two things every entrepreneur should do before committing to an expensive marketing scheme.

First, you must conduct an exhaustive trademark search to ensure your new brand does not infringe on another entity’s registered intellectual property or worse they they have already taken your business name.

Second, you should trademark (or file an intent to use filing) your business name and any variations, the name of your product and the name of any future product, relevant social media hashtags, and even your slogan. It may even be worth investing in one or more of the new generic top-level domain names if it makes sense under your marketing strategy. Register that, too.

Registering your trademarks with the U.S. Patent and Trade Office is the right move for two important reasons.

First, registering your trademarks will cost you much less than losing all of the goodwill you built under your original brand.

Second, common law (unregistered) trademark protection is limited compared to registered trademarks. A registered trademark can be enforced in all fifty states and can even recover damages and attorney fees in the event of a lawsuit. In contrast, the enforcement of common law trademarks can be limited to the business’ specific geographic region, and if you are able to bring suit, attorney fees and damages are not always guaranteed.

Your legal goal should be to create a sterile ring around your business name and your products. Conversely, your business goal should be to enforce that zone aggressively.

This begins at the development phase of brands and designs—especially if branding is outsourced. If the designer is your employee, it is assumed that the employer owns the work, but if the designer is an independent contractor, the opposite is true.

Unless you have protected that work under the terms of your contract with the designer, you may not completely own the design.

What Are the Legal Consequences of Changing Your Name?

If you decide that changing the name of your business entity is part of your rebrand, be aware. There are different ways to operate under a new name and each option carries different legal implications.

For example, you could amend your current organizational document with the respective state your entity is filed in. Amending the name of your business entity allows you to keep the same tax identification number, though the policies of most financial institutions will require a new bank account for your business. Additionally, while you will not be required to assign your current contracts to the new entity, you will need to inform contracted parties of the name change and reassure them that the original contract is still intact.

A second way to change your business name is to create a new legal business entity. If you elect to create a new entity, you will be required to obtain a new tax identification number. Unlike amending the name of your entity, you will also be required to perform the more burdensome tasks of assigning all of your current contracts to the new entity and reviewing possible tax consequences related to any asset transfers from your old entity to your new entity. You should also consider and address potential exposure from any liabilities remaining unpaid within the old entity.

Are There Other Options Available? Yes. Assumed Business Names

If changing the legal name of your business entity is not right for you, there are other options available. One such option is to use an “assumed business name,” “DBA” (doing business as) designation, or in some states, a “fictitious business name.”

Most states allow sole proprietors, partnerships, LLCs, and corporations to operate under an assumed name. Once registered, a fictitious business name allows your legal entity to operate under an assumed name while avoiding the legal implications associated with changing the legal name of your business. Perhaps you named your original legal entity intending to operate in a narrow industry, but after a few years, your operation has grown, and you want to branch out into an ancillary field. A DBA designation allows you to maintain your original legal entity while operating in a new field under an assumed name.

For example, your legal entity was formed as “Larry’s Landscaping, LLC.” But, after landscaping around so many of your clients’ pools, you have decided to offer pool installation and maintenance services under the separate entity, “Shangri-La Pools and Landscapes.” A DBA designation is an affordable and efficient option for achieving this goal.

Think trademarking a regular business is a headache? See how the Supreme Court recently ruled on the topic of "offensive trademarks."

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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