Many business owners are interested in creating a brand new name for a business and then trademarking that name, but you can in fact buy an existing trademark from another entity. It’s not very common, but it is possible. You can buy a trademark if you want to use it for the same goods/services (class) and you are active in business. There are a few ways to buy a trademark, but you may be wondering: why would you want to buy an existing brand name rather than inventing your own?
Branding Is Romantic
Whiteboards, brainstorming, coming up with that perfect name and then celebrating with some beers on the deck of your Airbnb that you rented for a long weekend with your co-founder. I’ve been there. Or at least, I’ve had these fantasies. There’s a whole story line in the sitcom The Other Two where Brooke Dubek and Cameron Colby spend a whole exciting day coming up with a business idea and name it Impact Group. They get high on the ideation of a charity, but cannot deliver on what the organization does when approached by investors. This is what business ideation, and yes, even branding, usually amounts to: nothing.
Too many aspiring entrepreneurs are preoccupied with the brand name before they actually have any paying customers or even an idea of what their business does. If you actually have a serious business idea, or are operating a real business, then you know how important and urgent it is to have a registered trademark. You probably are not as concerned about coming up with a business name on your own, but rather having a name that you can protect and that you can invest in.
Why Should You Buy a Trademark
These are the top reasons to buy a trademark:
- You need protection fast. For example, you sell products on Amazon and you want to join Amazon Brand Registry. The USPTO office has been backed up and instead of taking under a year for a trademark to reach registration, it’s now taking at least 14 to 18 months (if nothing goes wrong).
- You don’t want to waste money. Many businesses invest a lot of money in developing a brand around a business name before they have a registered trademark, which sometimes means shelling out four or five figures for a matching .com domain name. This can cause a lot of pain and serious expense down the line if you find out that you either cannot register that name as a trademark or you are infringing on someone else’s trademark rights. At Communer, you can buy both a trademark and domain name together, which is often much cheaper than buying both separately.
- You are serious about growing your business. When you purchase a trademark that is already registered, you can immediately focus on running your business and making money, which is the main purpose of a business. Brainstorming and researching a new brand name can disrupt your business’s momentum and delay its growth. Buying an existing brand name lets you keep your momentum going so you can start making, or continue making, money. You can also find out sooner whether your business will ever succeed or if you need to move on to another idea. As a bonus, if your business fails, you can sell your trademark in the future and recoup your losses.
- You want to get acquired. Owning a trademark adds value to your business and helps get your affairs in order if you want to get bought by another company at some point. A company is much less likely to acquire your business for the price you want if you can’t legally sell ownership of your brand name.
How to Buy a Trademark
You can buy a trademark from another business or entity via word-of-mouth, an online marketplace, or a trademark broker.
Communer is a trademark broker and online marketplace. We have all of our inventory online so you can search by various criteria to find your ideal trademark. We verify the ownership and validity of all trademarks we list. We also give you a sense of a trademark’s market value by giving it a Markhound® Appraisal, which you can compare to the listing price.
If you’re buying a trademark outside of Communer, you’re probably looking at places like eBay or dealing with an old-school trademark or business broker. These are valid ways to buy a trademark, but you will not know if the trademark is legitimate. The USPTO is cracking down on fraudulent trademarks and you don’t want to accidentally purchase a trademark that you can’t even own. Another common mistake is purchasing a domain name and thinking this allows you to use it as your brand name, but domain names are not brand names.
Here’s how to buy a trademark:
- The first step in buying a trademark is figuring out which class of goods/services you need. All trademarks are registered for one or more trademark classes. This is the category of your goods or services. You can browse this list of all trademark classes and you can search for your goods or services using the USPTO’s ID Manual, which will show you what classes are associated with that good or service.
- Next, determine what other assets you would ideally purchase with the trademark. For example, do you also want to have a matching domain name or logo?
- Decide how much you want to spend. At Communer, we display a Markhound® Appraisal that will help you determine if a trademark listing price is reasonable, similar to how a Zillow Zestimate can help you determine the value of a house.
- Search Communer.com, reach out to a trademark broker, or search eBay. On Communer, you can search by trademark class, specific goods and services, and whether or not you want the trademark to include a domain name. You can also start typing brand name ideas or letters into the search bar and see what comes up. Maybe something very close to your dream name is available!
- Purchase. If you’re buying on Communer, this is very easy. You simply add the trademark to your cart and check out, paying with credit/debit card, PayPal, or even Affirm, which allows you to spread out the cost over time. We’ll email you the trademark assignment agreement for e-signature and we’ll hold your funds securely until the trademark assignment agreement is signed by both parties. Once the contract is signed, the ownership change is now legal. After we’ve waited a few days to make sure everything went smoothly, the funds will then be released to the seller.
- Record the change of ownership with the USPTO. If you purchase via Communer, we’ll email you a valid trademark assignment agreement using language the USPTO will recognize as changing the ownership of the identified trademark. You will need to record this with the USPTO if you want the transfer made public. We can help you with that if you’re unsure how to do it yourself.
What to Beware of When Shopping for Trademarks
Buying a trademark can be easy and reliable on Communer, but you need to beware of other online marketplaces or business brokers that may be selling fraudulent trademarks.
Here are some tips:
- Never buy a business name on a brand or domain marketplace, like GoDaddy, BrandBucket, or Squadhelp, if you want to actually own your name. These marketplaces are selling domain names, not trademarks. Purchasing a domain name does not give you any legal ownership over the actual name.
- Make sure the trademark you are purchasing is valid and actually owned by the person or entity you are buying it from. This can be very risky when buying through a third party that does not guarantee the purchase.
- Research the trademark before you purchase it. Any legitimate trademark seller will provide you with the registration number and a link to the USPTO’s database entry so that you can review all of the trademark details yourself.
- Inflated pricing. A non-famous trademark’s value is based on many factors, but it is highly unlikely that it will be worth more than $20,000. If it is, there needs to be a clear reason.
- Sketchy websites or sellers. If a website or seller does not clearly say that you will own the US registered trademark, does not check the trademark’s validity and verify the seller’s ownership of the trademark, or does not hold the funds in escrow until the transfer is complete, then buy elsewhere.
Focus on Your Business
Once you’ve purchased a trademark and updated the ownership with the USPTO then you can go back to growing your business. Every business owner wants to get up and running as soon as possible. By buying a trademark, you can focus on the growth of your business and be confident that your business already has value via your newly secured intellectual property.