Introduction
If you’re setting up a business with another person, it’s important to understand what that means for the ownership of your company. If you have an equal partnership, then each partner has 50% ownership in the company. However, many partnerships aren’t so clear-cut and there may be other factors that affect who owns what percentage of the business. For example, if one person co-founded the company years before their partner joined them, they may have more say over how certain decisions are made or which aspects of running their business are handled by one individual versus another—all this will come down to how you’ve structured your partnership agreement.
When more than one person co-owns a business, they must decide how to divide the ownership of the company.
A trademark is simply a word or phrase that identifies the source of your goods or services. In order to register a trademark, you must have proof of use in commerce and must comply with the relevant regulations of the US Patent and Trademark Office (USPTO). In this article, we’ll go over what trademark registration is and how it can help your business grow.
The first question that comes up when talking about trademarks is: What does “trademark” mean? The term refers to any distinctive name, symbol, or device used in commerce by an individual or organization to identify its products or services as coming from it alone (unless otherwise authorized by law). The United States Patent Office (USPO) handles trademarks under two different categories: common law marks and federal registration marks. Common law rights protect an unregistered mark against infringement while federal registration allows you exclusive use on all goods/services within specific industries defined by classifications such as clothing lines under Section 44111201 through 44113309 or arts & entertainment services such as literary works under Section 101 through Chapter 9999; however there are some exceptions for certain industries like Agriculture Industry Codes 0100 through 2399
- Is cost an issue? Applying for a trademark may be cheaper when done individually than as a corporation or LLC, but there are drawbacks to this option.
- Are all partners listed on all documents? If only one person’s name is listed on the application and documents, then that person will be listed on all official records and correspondence from the USPTO (United States Patent & Trademark Office). If another partner were added later on down the road, he/she would not be able to access any existing files even though their names were never added in those records.
There are two ways two partners can apply for a trademark.
One partner can be the owner of the trademark, while the other partner is listed as co-owner on the trademark application. Or, both partners may be listed on their own separate applications as co-owners of the same name. The advantage of this method is that it allows each partner to have control over their own portion of ownership after they’ve created and built up their brand together.
It may be cheaper to register the trademark in one person’s name, but there are drawbacks to this option.
So what’s the downside? Even if your partnership lasts for decades and your business goes from strength to strength, there will come a time when one of you wants out. If one partner leaves or dies, they can’t take their half of the trademark with them—it stays with their former partner. This means that if you’re considering splitting up but want some kind of financial compensation for not being able to share in future profits (and possibly having had no say in how these profits were earned), then it may be cheaper and less risky to register the trademark under one person’s name alone.
If both people want to be listed on the trademark, they should each file separate trademark applications for it. This way, they won’t have to pay a filing fee twice and they can each get their own certificate of registration when their application is approved. Each person must submit a separate application even if their business name is a joint venture or partnership name and not an individual intellectual property right.
Each person must submit:
- A copy of the other party’s declaration (signed by both parties) that confirms that he or she agrees to share ownership in the trademark and has contributed something important to its creation or development
- A specimen of use showing how the mark has been used in commerce by all three parties
The partners may have different ideas about who should own the trademark in the event that one partner wants to leave the company.
You can only sell your interest in a trademark to another party. If you are the sole owner of a trademark, you can sell it to another person. However, if you are not the sole owner of a trademark and your partner has an equal or greater interest in that trademark than you do, then he or she will have to agree with any sale. This can lead to problems if one partner wants out of their business relationship and wants to sell their interest in the business name but is unable for whatever reason (such as lack of money) or does not want for some other reason (like wanting more control over company decisions).
It’s possible for two people to trademark a business name, but this arrangement requires some thought and planning.
If one partner wants to sell off his or her share in the business and quit, there needs to be a clear process for handling trademarks that are jointly owned by two people. A third party cannot step in and purchase just one owner’s shares; if this were allowed, then only one person would retain control over any trademarks that were registered before that split took place. In addition, whoever is left with sole ownership of such trademarks would then have complete freedom over how their mark was used going forward—including whether or not he or she chose to license it out as part of larger projects like video games or clothing lines.*
Conclusion
If you and your co-founder are ready to register a trademark for your new business, it’s important that you decide how to divide ownership. This is especially true if you want to apply for trademark in only one name—it’s not enough to simply say that there are two partners; the application must specify who will be listed as such on the document and why.
