What Happens to Trademarks When You Reorganize?

By Kate E. Rieber

Did you know that you can lose control of your trademarks because of a simple corporate reorganization or business name change?  Trademarks and their related goodwill are assets and need to be moved from one entity to another in the right way to avoid losing your rights.

For a variety of reasons, some business owners may decide to change their name.  Sometimes this can be because of a merger, or deciding that a corporation is more advantageous than an LLC, or simply because he or she wanted a business name that accurately reflected the goods and services of the business.  Moving from a DBA to an LLC, incorporating, or making seemingly minor changes in the wording of your business name can create confusion about who owns your brand and, on occasion, can actually undermine the value of long-held trademarks. Changing a business name can be a seamless transition with the help of a qualified attorney, but make sure you mind your trademarks.

If you have registered a trademark (or trademarks) under the first business, it is important to speak with your trademark attorney before dissolving the business and changing the name.  This is because legally the trademark is owned by that first business.  Once that business is dissolved, ownership does not automatically transfer to your new business.  In order to keep you (and your new business) as the recorded, legal owner of your trademarks, you would need to file an “assignment” with the United States Patent and Trademark Office (“USPTO”), transferring (or “assigning”) the trademark from your initial business to your new business.  Without showing a verifiable chain of ownership from the initial business to your new business, the trademark is at risk of being abandoned or cancelled.

Just as you were able to apply for and register your trademark online, the USPTO has an online form for submitting assignments.  At its most basic definition, an assignment is when a trademark, and all of its attending goodwill, is literally assigned to another owner.  For example, your trademark attorney would file an assignment, assigning your mark or marks from your first business to your new business.  Once the assignment is accepted and recorded, you would then be free to dissolve your first company, safe in the knowledge that your trademarks are still valid and under your ownership.

If you have, however, dissolved a business and are now operating under a new one, it is not the end of the world (or your trademarks).  It is imperative that you speak with your trademark lawyer about the next best steps to ensure that your trademark remains valid, and that you are still the legal owner on record.

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