By: Barry J. Heyman, Esq. and Avery Gibson
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A business’ success depends on more than just its goods or services. In fact, one of the most valuable assets a business has is its trademark.
What is a Trademark?
According to the United States Patent and Trademark Office (“USPTO”), a trademark or service mark (“trademark” or “mark”) includes any word, phrase, symbol, design, device, or any combination thereof that identifies and distinguishes the source of goods or services of one party from those of others. A trademark can be anything from a company name, logo or tagline, to its product packaging and appearance. A trademark can even be a distinguishable noise or color – the Coca-Cola name, McDonald’s golden arches, Aflac quack, and UPS brown color are all examples of federally registered trademarks.
How Valuable is a Trademark?
In 2011, Brand Finance estimated the value of Google’s trademark at $44 billion, or 27% of the company’s overall value, making it the most valuable trademark in the world. A study done in 2010 found that Coca-Cola, a similar trademark heavyweight, owes nearly 80% of the company’s value to its reputation and well-protected trademarks. While not all trademarks are worth billions of dollars, the value of a trademark should not be overlooked as it strongly correlates to a company’s goodwill (and vice-versa), which is an aspect of the company that keeps people coming back for repeat sales.
What is the Purpose of Trademark Law?
Trademark law helps prevent consumers from being misled into purchasing undesired products because of a mark that is similar or confusing to the mark of a trusted brand. Trademarks also help assure quality control with consumers relying on a standard of quality established by the association of a trademark with the owner’s goods or services.
In addition, trademark law protects the business’ investment by preventing confusingly similar competition in the marketplace by applying a test of consumer confusion and providing rights and remedies to the owner of the mark. Trademark registration follows the legal standard of “likelihood of confusion,” with the USPTO denying applications for marks likely to conflict with marks that are pending or already registered.
What is the Difference Between a Trademark and a Copyright?
A trademark protects a brand’s identity, whereas a copyright protects original works of authorship –such as a piece of art, a song, a movie, an author’s book, and a computer program. As an example, think of a TV commercial. Copyright law would protect the individual advertisement while trademark law would protect the company’s brand being advertised in the commercial. Trademarks and copyrights are covered under the broader arc of intellectual property law (“IP law”), which generally deals with the ‘intangible’ properties resulting from creations of the mind, as opposed to ‘personal’ or ‘real’ properties, which are tangible. Patent law, for example, is another area of IP law, which is dedicated to the protection of inventions.
Do I Have a Trademark? If So, Do I Have to Register It?
If you already have or are thinking about starting a business, consider these questions:
- Does your business provide goods or services?
- Does your business have a name, symbol, or logo associated with it that distinguishes it against competitors?
- Are there any specialized packaging, slogans, or taglines involved in your business?
If you can answer yes to one or more of the above questions, you may have a trademark and should consider protecting it.
Trademark registration with the USPTO is not mandatory and while you can establish rights to a mark based on legitimate use, known as common law rights, there are significant advantages to having a federally registered mark, as well as disadvantages for not having a registered mark.
Benefits of a Federal Trademark Registration
- National scope: Unlike common law rights, which are limited in scope to the geographic area of use, federal registration confers a nationwide priority of right in the use of the mark, regardless of the actual geographic use. It is important to note that federal registration does not protect the mark in foreign countries and if the trademark is used internationally, international applications should be considered.
- Notice of your rights: Registration provides constructive notice of your rights in the mark and prevents others from acquiring any common law rights to the mark in connection with a similar product or service. Once registered, the trademark will appear on the USPTO’s online database giving actual notice to anyone searching the database, which will further deter infringers and prevent costly legal disputes.
- Stop others from using your mark: In the event that a competitor does infringe on your trademark, having the mark registered provides you a legal presumption of ownership of the mark to the extent described in the registration. Also, while registration of your mark may not be conclusive in itself if an ownership conflicts arises, in many cases, the other party will not pursue the matter if you have a registered mark.
- Ability to recover money: In the event that someone infringes your mark, it may be possible to recover profits in addition to your actual damages and attorney fees. While the highest rewards will require a showing of willful trademark infringement, it is in these very instances that you will want the power to recover the maximum amount, which is only possible with a registered mark.
Pitfalls of Not Filing a Federal Registration
- Innocent infringement: One of the first recommended steps when filing a trademark application is conducting a comprehensive search of pre-existing or pending marks. In this instance, you can likely identify any competing and/or similar trademarks that may pose a future problem and be able to adjust the development of your brand accordingly. By not filing your trademark(s) at an early stage, you may be unknowingly infringing upon someone else’s rights.
- Loss of time and money: Unknowingly using someone else’s trademark may force you to abandon your use of the mark in exchange for a different “protectable” trademark. This effort can be extremely detrimental to your business, especially if you have to go through the additional time and expense of rehiring a logo designer, obtaining a new URL, and rebuilding your reputation and marketing plan. In addition, while you may not choose to engage in a legal dispute, you could also get entangled in a contentious legal situation, which will likely require unnecessary time and money to resolve.
- Supporting competitor success: By not registering your trademark you may be inadvertently allowing competitors to benefit from your reputation by selling similar products under the guise of your brand. Additionally, if a competitor files an application for your mark, or for a very similar mark, before you do, you will likely only maintain the rights, if any at all, to the mark in the area where the business originated, losing your ability to expand your brand throughout the country.
Should I Hire a Trademark Attorney?
Before investing money and resources into developing a brand you may want to consult with an IP attorney. While retaining an attorney is not required, he/she can be helpful in overseeing the legal aspects concerning the creation, protection, and enforcement of your trademarks. An attorney can be initially helpful in facilitating a comprehensive trademark search. The attorney also has a comprehensive and deeper understanding of the nuances in filing a federal trademark application and can strategize with you to determine the proper and relevant information that should or should not be included in the application materials. The proper filing of the application avoids unnecessary hurdles and delays. He/she can track the progress of the application throughout the registration process and if necessary communicate with the examining trademark attorney at the USPTO. An attorney can also assist you with how to best protect your trademark and ‘police it’ (i.e., ensuring others are not infringing your registered trademark) once registered, which is essential for keeping your trademark.
Practical Trademark Tips
- Search: Conduct a trademark search to ensure your mark is not infringing any other marks. Not only can this save you hundreds of dollars in filing fees (there are no refunds for a denied application), it can also protect you from legal action brought by someone with an already registered trademark that is the same or very similar to yours.
- Register your mark before it is “in use”: Before you begin using the trademark in commerce you may choose to submit an “intent-to-use” application. The advantage of filing an “intent-to-use” application is that upon registration you will obtain a filing date that pre-dates your first use date. This can give you an important advantage over others attempting to use your mark.
- Maintain control of your mark: Controlling your mark requires consistent use of the mark throughout your brand including, the spelling, appearance, and sound of the mark. If the mark is registered, make sure to align your use with what appears on the federal registration because that is what will be protected.
- Use the TM, SM, and ® symbols: Another way to maintain control and concentration of your mark is by using the appropriate symbols. If a mark is not yet federally registered, you can accompany the mark with the “TM” or “SM” designation until the mark achieves registration. Once it is registered, always use the “®” designation. Keep in mind that it is a punishable offense to deliberately use the “®” symbol or claim a trademark as registered when you know it is not.
- Keep records of relevant information: While your mark may never be challenged, in the event someone does challenge your right of ownership, it will be helpful to have evidence of your use and records relating to the first use date for each of the associated goods or services, keeping in mind that there is a specific legal definition with respect to what “first use” means.
- Use and renew your mark: Registration of your mark is only the start to defending your business’ name and goodwill. To maintain protection of your trademark, you must use it in a continuous manner and renew it upon expiration of the term.
- Monitor and enforce your mark: Once a mark has been registered, there must be a plan to monitor the mark, review other trademark applications, and a plan to enforce a trademark, especially if others are infringing the mark. It’s your obligation (not the USPTO’s) to protect your mark. Take immediate action (for example, retain an attorney to review the facts and possibly send out a cease and desist letter) if you discover someone infringing your rights.
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