Never overlook the importance of your nonprofit's name. A trademarked name identifies and distinguishes a brand from others and helps the public identify the source of goods or services. The identifiable name of a nonprofit can mean the difference between a successful fundraising campaign with unsolicited donations and a failed financial endeavor that is operating in the red. Don't leave your nonprofit trademark unregistered and at the mercy of chance.
Common law trademark rigghts
It is not always necessary to register a trademark to have legal protection. Protection comes from using the trademark in the course of business, not from the registration of the trademark. If your nonprofit has a name or logo that is used regularly, you already have common law trademark rights in the geographic region where you use the trademark unless another organization previously registered the mark. For example, if your nonprofit uses its name to do business in California, you have a common law trademark.
The trademark does not have to be registered for common law rights to apply. Common law trademark rights belong to anyone who can prove they actually used it first in commerce. If your nonprofit plans on doing business beyond your geographic area, you will want a federally registered trademark to secure your brand. Registering a trademark protects it in all 50 states, even if your nonprofit is not currently doing business in every state.
On the flip side, if another company previously registered the trademark — even if they were not using it in California — your nonprofit could face legal trouble in the form of trademark infringement. Trademark infringement can be avoided during the due-diligence phase of name selection.
Benefits and costs of registering a trademark
Registering a nonprofit trademark provides extra protection, added benefits, and enforceable rights. Some of the legal benefits of registering a trademark for a nonprofit include:
- Protection. The trademark will be legally protected in all 50 states.
- Expansion. Expanding beyond the local region will be possible.
- Exclusive rights. From the registration date, the nonprofit will have exclusive rights to the trademark even in locations where it doesn't do business.
- Dispute resolution. With a registered trademark, you have solid proof of ownership and rights.
- Access to federal courts. In the event of trademark infringement, a nonprofit will have access to the federal court system to stop the infringement.
- Damages, legal costs and fees. When a trademark is registered, the owner could be awarded damages that resulted from the infringement, any profits that the infringer made as a result of using the registered trademark, and legal fees and costs.
Registering and maintaining a trademark comes with a high price tag. Before registering a trademark, a thorough search is required. This should be done by a professional who knows what they are looking for and where to look. Then you have the application filing fees and maintenance fees. Hiring an attorney to handle the application and maintenance process, which is ongoing, could be the best option but also adds more cost. And in the case of trademark infringement—and if a cease and desist letter or legal enforcement is required—you will encounter attorney fees.
Registering a trademark does not come cheap. If your nonprofit has a small budget or is just starting out, it may seem attractive to go the common law trademark route. But going through the effort and cost of registering a trademark from the onset can save a lot of time, hassle, and legal trouble later on.