Protect your good name

A trademark or service mark are creative ways to distinguish your business from competitors.

Trademarks and Service Marks are source identifiers. They can be creative ways to distinguish your business from others and notify your customer base that particular services and goods are provided by your business. Trademarks can be fanciful or arbitrary words, symbols or designs or a combination of any of these.

Both state and federal trademark protection is available. State trademark rights are governed by the specific laws in effect in each state. Federal trademark protection is afforded under the United States Code. Those statutes define the procedures to be followed to obtain a trademark registration as well as the remedies that are available to protect the trademark once these rights are secured.

State protection

A state trademark registration provides notice to the public and to competitors that the owner of the state trademark registration considers the trademark to be its means of distinguishing its goods or services from others in the industry. Typically, the remedies available to protect state trademark registrations are much more limited than those afforded owners of federal trademark registrations. However, to qualify for a federal registration, the goods and services must be offered and sold in interstate commerce in conjunction with the trademark or the applicant must have a genuine intent to do so in the not too distant future.

For those businesses whose operations are limited to a single state, a state registration is a way of preventing competitors in that state from copying the company’s trademark. Obtaining a state trademark registration can be the first step in securing rights to a trademark on a national basis if the company plans to expand beyond that state’s borders. The state registration puts the public on notice that the company claims rights to that particular trademark within the borders of that state. Since the procedures to secure a state trademark registration are usually less complicated and expensive when compared to the federal registration process, seeking a state trademark registration is an inexpensive way to begin staking out your rights to a trademark.

Determining your trademark

The first step in selecting a trademark is determining whether the words, symbols or designs are available for use as your business’s trademark. A business should determine if anyone else has a state or federal registration for the trademark under consideration or if anyone else has been continuously using the same or similar words, symbols or designs as a trademark. There are trademark search firms who for a fee will conduct a thorough search on a state and/or national basis of the use by others of the same or similar trade names or trademarks and provide a report of the search results.

It is highly recommended that this type of search be conducted before investing substantial resources to market and advertise a company’s goods or services under a newly selected trademark. Otherwise, a business may find itself scrapping the entire marketing and advertising campaign when one with superior rights to the selected trademark threatens to sue for trademark infringement and demands that all use of the selected trademark cease.

In the preliminary stages of selecting a trademark, a business can complete some initial searches itself or with assistance from legal counsel by searching the internet, searching the website for the United States Patent and Trademark Office (USPTO) (www.uspto.gov) and searching the corporate/trademark website for the particular state where a state registration is sought. If the search results disclose that one or more third parties are using the same or a similar trademark or trade name with the same or similar business, goods or services, it is best to drop that potential name, design or symbol and try again.

Federal protection

Federal trademark registrations issued by the USPTO can provide cost effective protection, even for companies that only conduct business in a few states. Although U.S. law allocates "common law" trademark rights to the first party to use a word, phrase or symbol to identify the source of the goods or services sold in U.S. commerce, these common law rights are limited in scope and are frequently ineffective. Federal registrations convey respect, provide significant benefits that are both defensive and offensive in nature, and contribute to a company's long term financial health and profitability. These benefits typically far outweigh the cost of obtaining and maintaining the registration, particularly when a company name or mark is intended to be a long lasting and memorable symbol of the company.

Federal registration provides the following benefits:

  • "National" in scope. The filing date of the federal application constitutes the effective date of first use of your name or mark on a national basis. Otherwise, third parties (e.g., your competitors) can use your name or marks in other geographic areas, which detracts from the distinctive value of your name and marks, and can prevent your expansion into those areas.
  • "Presumed Valid." Parties that adopt a mark that is confusingly similar to a federal registration must prove the registered mark is invalid to a court or jury. On the other hand, the owner of an unregistered mark has the burden of proving the validity of the mark. Significant costs are incurred to establish the validity or invalidity of a mark during litigation.
  • "Incontestable" five years after issuance. Incontestability pertains to allegations regarding: a) the "descriptiveness" of the mark, and b) a third party's "prior use" of a similar mark. An unregistered mark remains vulnerable to third party allegations that it merely describes the goods or services sold under the mark, and allegations that another party has the rights to the mark because they were the first to use the mark. Incontestability is particularly important for a company's name and its more valuable marks, because others who claim superior rights can attempt to hold your name or mark hostage when they learn about your success.
  • "Notify" others of your rights to your mark. If a third party is considering adopting a similar mark for similar goods or services, then its availability search should identify your registration so that it can take steps to select a different mark. If a party has innocently adopted a mark similar to yours, and then finds out about your registration, it may intelligently decide to phase out or minimize future use of that mark to avoid confusion and possible litigation.
  • Enable the USPTO to help "Police" your mark. The USPTO will advise other applicants (e.g., your competitors) of your registration if it is confusingly similar and deny those applications if the subject mark and goods/services are so similar to your registration that consumer confusion is likely.
  • Can enhance the "Damages" for infringers. Treble damages can be assessed for cases of willful infringement.
  • Help stop trademark "Piracy." Federal registrations are valuable evidence in trademark pirating proceedings when foreign competitors take your name or marks and register them in their country.
  • "Flush Out Possible Problems" concerning a company name or mark so that the company is not forced to change its name or important mark because a competitor correctly advises that it has the rights to that name or mark. Flushing out possible problems early helps minimize or avoid expensive marketing dilemmas and costly litigation.
  • Important for "Franchising." Companies considering franchising need a legally protectable trademark associated with the business to attract others to become franchisees of the business. Well recognized trademarks associated with a business can enhance the value to prospective franchisees.
  • "Potential Purchasers Prefer" that a company's name and significant marks are federally registered. Federal registrations help ensure the value of what they are buying, and help ensure they are not buying a law suit regarding the rights to the company name or its marks.    

 

A business can apply for a federal registration if it has been using a trademark in interstate commerce in association with specific goods or services or if the company has specific plans to do so in the not too distant future. If the application is based on use in interstate commerce, the applicant must complete and file the necessary legal documents and submit specimens of the use of the trademark in conjunction with the specific goods or services.

Once the application is filed with the USPTO, an examining attorney is assigned to review the application and determine if the applicant has met all of the legal requirements to secure a federal registration.

The complexity and expense of securing a federal registration can be substantially reduced if:

(1) the applicant has done its homework in searching and confirming that no similar trademarks or trade names are in use or are registered or the subject of a pending application for the same or similar goods and/or services as planned by the applicant and

(2) the applicant has carefully and accurately completed the legal forms.

If the examining attorney approves the application, the trademark will be published for opposition, giving the public a short window of time to file an objection to the registration of the trademark. If an objection is not timely filed, the trademark will be registered.

Lawyers who practice trademark law can assist businesses in selecting trademarks, searching to determine the availability of potential trademarks and preparing and filing the legal documents necessary to secure state or federal trademark protection.

If you have questions about securing or protecting a trademark, you can contact the author at schlicht@cf-law.com.

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