Trademarks 101

If you are a Start-up designing your creating a unique recognizable name, slogan and/or logo or other distinguishing mark, you are going to want to protect it from use by competitors.  Where do you begin?

There are four types of marks: Trademarks are used for goods (OREOS® or LEXUS®); Service Marks are used for services (STARBUCKS® or HYATT®); Certification Marks are used to certify some quality of a product or service (FARMWORKERS AFL-CIO UNION LABEL®); and Collective Marks indicate memebership in an organization (AMERICAN BAR ASSOCIATION®).

Lets focus on the popular Trademark for your goods. The statutory definition of  Trademark is that is “a word, name, symbol or device or combination thereof, used by a person (including a business entity), or that a person has bona fide intention to use in commerce to identify and distinguish his or her goods from those manufactured or sold by others and to indicate the source of those goods.15 U.S.C. § 1127.

For example, COMET® for cleanser, CHEERIOS® for cereal or JIM BEAM® for whisky are all Trademarks that distinguish their goods from that of thier competitors; AJAX®, FROOT LOOPS® or JACK DANIELS®.

Not all words letters and symbols are protectable. Generic words cannot be trademarks (PEANUTS, or COFFEE) and descriptive words can only be trademarked upon proof of secondary meaning (COASTAL WINERY). Also, marks that are deceptive (WESTPOINT for Guns), functional (a mark consisting of the flavor orange) or gepgraphically misdescriptive (ALASKA for Bananas) cannot be protected.

If you determin that you mark is protecable you have two options, Common Law Trademark Protection and Trademark Registration.

Gaining Trademark Protection- Common Law

Luckily for you, you don’t have to be General Mills® to be able to protect your intellectual property. Unlike other countries, in the United States,  Trademark rights arise from the adoption of the use of the mark, not from regstration.  Thus, if you use your mark, you may have valid and enforcable rights in that mark even though the mark is not registered with the USPTO. You will have priority even over a subsequent user who has secured a federal registration for a mark.

The “use” required to establish trademark right is more than just token use; it must be public. While sales are not required, there must be a bona fide business transaction, not merely some articfical, sham use.  For example using the  mark or selling the product one time to someone within the compay or to  close personal friend is not usually sufficient; but creating a website where the mark is used and where the public customer can submit order requests or buy the product may be sufficient to show commercial use.

You should attempt to document the “date of first use” as such date is critical to show that you, as opposed to your comepetition, were commericially using the mark first. Priority of trademark rights is measured from this date.  The senior user/first user will be able to preclude the junior user/second user from using a confusingly similar mark.

Trademark Registration

While not necessary, it is usually advisable to secure federal registration of a mark with the USPTO. The filing fee is about $225 per class and the application process takes about one year.  Doing so offers your business several advantages:

  • Registration last for 10 years and is renewable;
  • The right to use the  registration symbol ® with the mark;
  • The right to bring action in federal court for trademark infringment and recover lost profits, damages, costs and possible triple damages and attorneys fees;
  • The possible basis to claim priority in an internet domain name;
  • Incontestable status of the registration after five years of continuous use subsequent to the registration;
  • The public is assumed to have notice that the registrant has nationwide priorty of use of the mark as of the filing date;
  • The ability to bar importation of goods bearing infringing trademarks (assuming the resitration is given tot he U.S. Customs and Border Protection);
  • The right under the Paris Convention to obtain a registration in various foreign countries based on U.S. registration; and
  • Prima facie evidence of the validity of the mark and of the registration, the registrant’s ownership of the mark and the registrants exclusive right to use the mark in connection with the identified goods.

After registration you will be required to prove use between five and six years and every 10 years.

State Registration

It is possible that your mark may not qualify for federal registration, generally because it is not used in interstate commerce (commerce that crosses state lines). If so, you may seek to register for use within a state. This is generally a quick and inexpensive process and each state has forms on the Secretary of State website.  State registration usually confers use for 5-10 years depending on the state.

Trademarks and other intellectual property oftentimes become one of the most valuable assets of your business. Registering them and protecting against infringment can help make your business much more successful.

 

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