By Sasha Bau, Esq., and Danielle Comanducci, Esq.
A brand is often one of the most valuable assets of a business. A trademark is essentially a brand name: a word, phrase, symbol or design that identifies and distinguishes the source of the products of one business from those of competitors. A “service mark” is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product. For the purposes of this article, we will refer to “trademarks” as meaning both “trademarks” and “service marks.” Having a unique and distinctive trademark is important because recognizable trademarks add to a brand’s value by uniquely identifying the source of a particular product or service. No matter how large or small the business, it is crucial for each business to take steps to protect and maintain its trademark rights because, without the proper protections, use and enforcement, the value of the trademark can be undercut, and sometimes the trademark and the ability to prevent other businesses from using a similar mark could be lost altogether.
The following are some basic but important rules that businesses should keep in mind when it comes to trademarks.
- Choose a trademark that is unique and distinctive
When building a brand businesses should choose a unique and distinctive trademark as it will help to significantly distinguish the relevant products or services in the marketplace from those of competitors. Trademarks are judged on a spectrum of distinctiveness, meaning not every trademark is created equal. In fact, some marks may be denied protection altogether, while others may be granted only limited registration and protection. A trademark’s distinctiveness affects the level of protection it receives: generally, the more distinctive the mark, the more protectable it is.
Under U.S. trademark law, there are five categories along this spectrum of distinctiveness, ranging from “strong” marks that are entitled to trademark protection to marks that are weaker and entitled to less protection or even no protection at all. These categories are (from strong to weak):
1. Fanciful marks: are trademarks that are made up of terms that have been invented for the sole purpose of functioning as a trademark and do not have a known meaning (e.g. KODAK®; PEPSI®). They have the strongest trademark protection.
2. Arbitrary marks: are trademarks that are comprised of words that are part of common linguistic uses but, when used to identify particular products or services, do not suggest or describe a significant ingredient, quality, or characteristic of the products or services (e.g. “APPLE®” used to identify a computer maker).
3. Suggestive marks: are trademarks that indicate a characteristic or quality of the product or services, but the connection is not immediately obvious and would require the consumer to use his or her imagination, thought, or perception to reach a conclusion as to the nature of those products or services (e.g. NOBURST® for liquid antifreeze and rust inhibitor for hot-water-heating systems). It is important (but not always easy) to distinguish between a “suggestive mark” (requires some imagination) and a “descriptive mark” (which immediately tells something about the products or services).
4. Descriptive marks: are trademarks that describe an ingredient, quality, characteristic, function, feature, purpose, or use of the products or services associated with the mark (e.g. “BED & BREAKFAST REGISTRY” is merely descriptive of lodging reservations services). Generally, entirely descriptive marks are not entitled to trademark protection and will only receive protection if they acquire “secondary meaning.” Secondary meaning occurs when consumers have come to associate the descriptive name of a product with only one source.
5. Generic terms: are terms that the relevant consumers would understand primarily as being the common or class name for the products or services. Generic terms alone do not receive any trademark protection because they cannot function to identify a particular source of products or services (e.g. using “bicycle” for the sale of bicycles or “hotel” for hotel services).
Accordingly, businesses should avoid the temptation of choosing a descriptive mark or generic terms (e.g. under the belief that this will reduce the initial effort and cost required in order to educate consumers about the brand). Failure to adopt a “strong” mark for a brand can have unintended consequences in the long run including, difficulty or impossibility of registering the trademark and difficulty in stopping others from using similar marks that cause consumers to be confused (which in turn can harm the business).
Instead, businesses should choose a unique and distinctive mark. Such mark (i) should be entirely or partially fanciful, arbitrary or suggestive; (ii) should not merely describe the products or services associated with the mark; and (iii) should be distinct and different from other marks that are used in connection with similar products and services.
- Perform proper trademark clearances prior to adopting a trademark
Before adopting a trademark and expending considerable amounts of money on branding and marketing, any given trademark should be properly cleared, as identical or confusingly similar trademarks presently in use by others will pose a problem. If another business is already using the same or similar mark (in connection with similar products or services) such business may have a legal claim against the subsequent user for infringing on its trademark rights.
Trademark clearance searches are varied in scope but typically include a review of state and federal trademark registers, industry publications and databases, business names, internet domain name registries, and international trademark registrations under international treaties.
- Secure domain names early on and take initial steps to protect the brand online
Before adopting a trademark, businesses should purchase the domain names that contain the business’ core trademarks. This can be done through one of the many “domain name registrars” (e.g. GoDaddy®, Network Solutions®) that facilitate the buying and selling of domain names. The price for purchasing a domain name can vary among the various providers. In some instances, there can be other requirements depending on the “top level domain names” desired (e.g. the “.nyc” top level domain name is reserved only for persons or companies having a valid New York City address).
Businesses should also consider whether to register their trademarks in the Trademark Clearinghouse (“TMCH”). TMCH is a global repository for trademark data, established by ICANN in order to assist trademark owners in preventing infringing behavior in the Domain Name System. It is important to note that TMCH does not grant any trademark rights. Instead, it is a database of registered trademarks which offers protective mechanisms for trademark owners including, giving priority rights to those trademark owners to register new domains related to their trademarks (before the domain registration process opens up to the general public) and alerts them if anyone else attempts to register a domain name containing the identical mark. Although not unlimited, this can help businesses reduce the risk that third parties will unlawfully use the brand online in connection with domain names.
Businesses should also protect their trademarks on social media. When establishing a brand, a business should register usernames on the major social media platforms that correspond with its core trademarks (and key variations of those marks).
- Register the trademark with the United States Patent and Trademark Office
In the U.S., trademark rights are acquired by actually using the trademark on or in connection with particular products or services. While it is not a requirement to register a trademark in the U.S., there are several advantages in registering a trademark on the federal level with the United States Patent and Trademark Office (“USPTO”). For example, a federal trademark registration provides several advantages, including:
1. Discourages others from using or applying for registration of the same mark or confusingly similar marks by making the mark easy to find in a trademark clearance search;
2. Protects against registration of confusingly similar marks, as the USPTO will cite prior registrations against subsequent applications for confusingly similar marks and will refuse to register such marks (if it determines that the marks are too similar so as to create the risk that consumers could be confused as to the source of the products and services associated with such marks);
3. Provides nationwide public notice of the business’ ownership of the mark and its exclusive right to use the mark nationwide on or in connection with the products or services listed in the registration (with heightened protection after five years and the possibility of becoming “incontestable”);
4. Grants the right to use the “®” symbol (upon registration);
5. Grants the right to sue in federal court and, in certain cases, obtain increased damages and attorney fees;
6. Empowers U.S. Customs and Border Protection to block imports that infringe on the mark or are counterfeits once the registration is separately “recorded” with Customs; and
7. Can provide a basis for trademark registration in foreign jurisdictions, thus facilitating protection of the mark internationally as business expands.
Once properly filed with the USPTO, it can take anywhere from a few months to several years to obtain a trademark registration with the USPTO (depending on whether or not the business is using the mark in commerce and the issues that could arise during the prosecution of the application). A trademark attorney can help assist businesses with this registration process as well as the required post-registration steps needed to maintain the trademark registration.
- Protect the trademark internationally
Trademark rights are territorial, meaning that such rights are acquired on a country-by-country basis. For example, a U.S. trademark registration may not offer any protection against infringement by others outside of the U.S. Thus, if a business provides products or services anywhere outside of the U.S., has a globally recognizable brand or is seeking global recognition of its brand, then it is important for it to protect its trademark in the countries where it does business or is planning to do business. Businesses that fail to do so may lose their rights to protection or have to fight for the right to use their trademarks in those countries (e.g. third party infringers may try take advantage of the success of a brand by registering that brand’s trademark and then using it in connection with lesser quality products or services thus misleading customers into thinking that a particular business is at the origin of these products or services).
There are both national and multi-national options available to businesses who wish to protect their trademarks in other countries depending on the countries of interest.
1. Multi-national registrations under international treaties
There are several international treaties that can help simplify the process of filing trademark applications abroad by using U.S. trademark rights as a basis for obtaining protection of a U.S. trademark in more than one foreign country. However, the most popular multi-national option for protecting U.S. trademarks in foreign countries is the Madrid System for the international registration of trademarks that is administered by the International Bureau of the World Intellectual Property Organization (“WIPO”) located in Geneva, Switzerland.
Under the Madrid System, the owner of a U.S. trademark can use its U.S. federal trademark application or registration as a basis to file a single application, called an “international application”, in several countries at once. This process can be done from the U.S. directly through the USPTO (which then sends the application to WIPO). However, the Madrid System is not a means to obtaining an “internationally effective” trademark. The U.S. trademark owner must still choose the specific countries in which it wishes to protect its mark (currently the Madrid System can cover over 90 countries). Once properly filed, each chosen country reviews the application and applies their own rules and laws to determine whether or not a particular trademark may be protected in their jurisdiction. This means that each designated country has the right to refuse registration of the trademark if the application does not comply with its national registration standards.
One of the advantages of the Madrid System is that it is a more streamlined process that does not require the trademark owner to hire local attorneys in each country. The fees payable for registering a trademark internationally vary depending on the specific countries designated, but are not exorbitant thus rendering international trademark protection accessible and affordable for small and large businesses alike.
2. National registrations
In the event that a business cannot take advantage of an international treaty such as the Madrid System, it may need to seek national protection in each country in which the business currently offers its products or services or where it intends to offer its products or services in the future. When seeking national protection in each country of interest, a business must file an application for registration of its trademark directly with the intellectual property office of each country in which it wishes to obtain trademark protection. In such case, it is often necessary to retain a local attorney or agent in each country to file such application.
- Use the trademark and monitor against infringers
Trademarks rights must be maintained through actual lawful use of the trademark. Businesses that fail to properly use or “police” uses of their trademarks run the risk of losing their trademark rights. Once a trademark is registered with the USPTO, the owner of the trademark must prove continued use of the mark by making certain filings and submitting proof of continued use to the USPTO (between the 5th and 6th year after registration, and every 10 years after the registration date). Non-use of a trademark for three consecutive years is considered abandonment unless somehow proven otherwise. Once a business’ trademark is deemed to be abandoned, anyone can use it. Therefore, in order not to lose its trademark rights, a business must be mindful to continue to actually use the trademark in connection with its products and services.
In addition to continuing to use the mark, businesses must also actively monitor against unauthorized uses of their trademarks and take steps to protect their marks when they discover cases of third party misuse or infringement. Businesses should for example, (i) regularly monitor the USPTO’s “Trademark Electronic Search System” for third party applications for confusingly similar marks; (ii) conduct regular internet search engines searches and use online notice alerts to notify them of uses of their marks; (iii) carefully control any licenses they grant to third parties; (iv) be on the lookout for improper uses of the mark and implement clear trademark use polices for their employees and business; and (v) after consultation with an attorney, take steps against third parties that unlawfully use their marks (e.g. by sending “Cease and Desist” letters and when appropriate initiating legal action against infringers).
In summary, there are many important factors to consider in determining how to select and how to protect a trademark. At Shiboleth LLP, we have vast expertise in the complexities of U.S. and international trademark protection and registration and the knowledge to guide our clients to make informed decisions on what best fits their goals.