The Essentials of Trademarks

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What is a Trademark?

A trademark is a word, name, symbol, or device or any combination thereof, used or intended to be used to identify and distinguish a company’s goods or services from those goods or services sold by others, and to indicate the source of goods.  Basically, a trademark is a brand name that is the name of a company or the name a company’s product or service, and it can be one of the most vital assets to a company.  Can you think of McDonald’s without the golden arches or Nike without the swoosh?  Or can you think of the gold arches without McDonald’s or the swoosh with Nike?  The names of these companies and the symbols that they use are trademarks that these companies have used and built up through extensive use and marketing to establish what is known as “goodwill” that helps distinguish their entire brand of goods from other parties’ that offer the same or similar goods or services under different brands. 

And whether you realize it or not, trademarks are everywhere!  You see them in every facet of your life, from when you wake up and use toothpaste, to when you take the cereal out of your kitchen cabinet, to when you drive to work and see business signage and advertisements.  And depending on the brand recognition and reputation that has been formed through marketing activities, these brands can drive the sale of a company’s products, in some cases, more so than the products themselves.

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How Do I Come Up With and Protect My New or Existing Trademark?

A. Create a Distinctive Trademark

The first step to protecting a trademark is to develop a mark that is distinctive, in that it will sufficiently distinguish your goods or services from those offered by other companies.  Trademarks generally fall within four categories: (1) a fanciful or coined mark; (2) an arbitrary mark; (3) a suggestive mark; or (4) a descriptive mark.  Marks that fall within first three of these categories (fanciful or coined, arbitrary and suggestive) are considered to be “inherently distinctive” marks, meaning that generally speaking, they are automatically be entitled to the highest level of protection under U.S. Lanham Act (the federal trademark statute) and state unfair competition statutes.  For this reason, when developing your mark, it is always best for it to fall within one of these categories. 

Of course, many business owners choose to use descriptive trademarks, at least in part, as names for their company to allow customers to immediately know what services or goods they offer and where they are located.  And despite the descriptive nature, these trademarks may be entitled to protection under the law, but in most cases, this trademark protection is limited to the town or county that they are located in.

Here are descriptions and examples of the four general categories of trademarks:

  1. Fanciful or coined mark – This is a mark that is comprised of an invented term and has no meaning at all outside of its use a trademark for a particular product or service.  Examples of fanciful or coined marks are Xerox® copiers or Cisco® telecommunications equipment.
  1. Arbitrary mark – This is a mark that is comprised of actual defined term that is used in a way that it does not describe the product or service or any of its ingredients or characteristics.  Simply, it is using an arbitrary term to label your goods or services.  Think of Fuji® film or Apple® computers.  The term “apple” has no connection with computers, but since it is used in an arbitrary sense in connection with computers, it is able to be a distinctive trademark.
  1. Suggestive mark – This is a mark that is comprised of a term that indirectly describes a product or service and requires a certain level of imagination or mental leap to associate the term with the product or service.  An example here is Coppertone® suntan lotion.   
  1. Descriptive mark – This is a mark that is comprised of a term (or terms) that describes a product or service that it covers.  Descriptive marks are usually not entitled to a high level of trademark protection.  The reason for this is that no one party should be able to prevent another party from using a descriptive term in connection with the sale of their products.  For instance, while the term “fuji” is arbitrary in connection with the sale of camera film, it is descriptive in connection with the sale of apples.  And simply because one apple orchard uses the trademark “Fuji Stand,” this does not mean that it can then prevent any other apple orchard from using the term “fuji” in the promotion of its own fuji apples that it has for sale. 

Nevertheless, even where a trademark is descriptive, it might still be able to function as a distinctive trademark if enough of the purchasing public recognize the mark as identifying one source or company.  A prime example of this is The Container Store®.  This is a store that sells containers, and therefore, by all accounts, The Container Store® mark is descriptive of the goods that are sold there.  And yet, this mark was granted federal registration by the United States Patent & Trademark Office (the “USPTO”) on what is called the Principal Register.  This is due to the fact that the mark has been used since 1978 and the company has been able to garner significant consumer recognition and reputation during that time. 

As mentioned above, many business owners use descriptive marks as names for their business or names for the products or services that they offer.  For example, a local retail store might decide to include the name of the town in which they are located as part of their company name to allow customers to know where they are located.  They also might include the name of the type of store, such as “food market,” in their name to allow customers to know what goods they sell.  Although this is not the most ideal method for establishing a distinctive nationwide brand, this can be sufficient for local commerce purposes.  And if the store has been in business for a sufficient amount of time to garner local recognition, the name of this store should be entitled to a certain amount of protection within the town and the immediately surrounding areas under their State’s unfair competition laws.    

B.  Make Sure that Your Trademark is not Confusingly Similar with a Prior Trademark

After you have a possible choice for a trademark for your company or brand, the next step is to perform a trademark search to confirm that no other company is already using a similar mark in connection with the same or related goods or services.  Performing a trademark search is an essential step in choosing whether to use a mark, and unfortunately, it is often a step that is skipped.  Business owners invest significant amounts of money to build up their brand with new signage, inventory and marketing materials, so it is best to know that another company does not already has rights to your mark prior to investing this money.  Otherwise, the business owner could receive a cease and desist letter from a company with prior rights to the mark, and this letter can come days, months or even years later.  At that point, the business owner will need to decide whether to fight to keep its mark or rebrand and lose money that was already invested. 

For this reason, it is worth spending a little extra time and money to initially perform the trademark search.  Searching for other marks is not always easy to do, and it is useful to consult with a trademark attorney that has experience in performing trademark searches and reviewing trademark search results.

C.  Obtain Federal or State Registration for Your Trademark

Once you have picked a trademark for your brand name, the best way to protect the mark is to register it with either the federal government in the USPTO or your State government’s trademark regulatory authority.  If you are using the mark in interstate commerce (i.e., selling or offering for sale products or services across state lines), registration can be obtained in the USPTO.  If you are using the mark in intrastate commerce (i.e., selling or offering for sale products or services only within your state), registration can be obtained in your State’s trademark authority. 

Even if a trademark is not registered, the trademark may still be entitled to what is called “common law” protection under a State’s unfair competition laws. And this protection is granted simply by using the mark.  Nevertheless, federal registration of a mark ensures the best method to protect, broaden and expand trademark rights.  Indeed, common law rights only expand to the immediate geographic location in which the mark is being used, whereas federal registration will generally grant nationwide protection to a trademark even in areas and states where the registered mark is not being used.  And federal registration provides a business owner with a stronger ground to stand on when enforcing its rights against another company that is improperly attempting to use the registered mark.

Federal registration costs between $1,500-$2,500, on average, and can take between 12-18 months to obtain.  We can provide further information regarding the federal application process and the fees associated with this process upon request.

D.  Enforce Your Trademark Rights

The final step in protecting your trademark is to enforce your trademark rights.  Regardless of whether you obtain federal registration for your mark or not, you will want to monitor the marketplace to make sure that no third party has started to use your mark or a similar mark in connection with the same or similar goods or services that you offer.  Of course, if you have federal or state registration for your mark, this will bolster your rights in connection with the mark.  Federal registration will deter others from starting to use your mark in the first place.  Your mark will be listed on the online federal trademark database maintained by the USPTO.  This is one of the first places that people look when determining whether or not to adopt a trademark.  If they see that you have or have filed for federal registration for the mark, it may automatically deter them from attempting to use or apply for that mark. 

Still, enforcement may also require proactively monitoring third party use of the mark.  If you locate someone else using your mark, it may be necessary to send a cease and desist letter to the infringing party.  Further, if that third party does not stop using the mark despite receiving the cease and desist letter, it may be necessary to file a lawsuit in state or federal court claiming among other things, unfair competition or trademark infringement.  If you feel that your trademark rights are being violated by a third party or would like to know if they are, we can provide you with assistance in assessing your rights and determining your options.

Benjamin G. Taub, Esq. of the law firm Budd Larner, P.C., may be reached at 973-315-4457 or jtaub@buddlarner.com

The Chamber of Commerce is a voluntary, not-for-profit organization that strives to bring hundreds of businesses and professional firms together in order to create and sustain a healthy and viable business and residential community. The dues investment made annually by each of its members provides a wide variety of programs dedicated to the betterment of the entire Millburn-Short Hills community. 

Our office, located at 343 Millburn Avenue, Suite 303, is a resource center offering information and answers about the business and residential life in our township.  For information about our services and programs, call us at 379-1198 or visit our website www.millburnshorthillschamber.com, e-mail us at info@millburnshorthillschamber.com. And like us on Facebook.

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.

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