Trademarks – Forging a sword and shield around your goodwill

So you’ve formed a new company, launched a new product/service offering, added a new feature to an existing offering, or maybe your company has been doing business and offering products/services for a while now but you still haven’t thought about trademarks.  If so, it could prove to be a costly mistake down the road.

What is a Trademark?

A “trademark” can be anything that identifies and signifies the source of products or services.  Most typically, one thinks about a trademark as a company name (e.g. NIKE), a slogan (e.g., JUST DO IT), or a logo (e.g., the Nike “swoosh” design).  But trademarks can be any symbol that indicates the source of goods or services, including, the look and feel of a franchise (like the unique layout of an Apple store), color (think light blue for Tiffany jewelry), sound (think of the NBC jingle), or even smell.

What does a Trademark do?

Trademarks distinguish your products and services from others and symbolize the goodwill and reputation of your business, including the consumer recognition, trust and loyalty that your brand enjoys.

As a practical matter, trademark rights function both as a sword and a shield:

• Sword: Trademark rights enable you, the brand owner, to stop others who are using the same or similar marks to cause consumer confusion, usurp or freeride on your reputation, or harm you by potentially associating your brand with an inferior product.
• Shield: Trademark rights protect you from others who might object to your use or registration of your brands.

Choosing a Strong Trademark

Not all terms can be trademarks, and not all trademarks are created equal.  The inherent strength of a trademark (as opposed to commercial strength that must be cultivated through sales, marketing, and word-of-mouth) is determined by where on the “spectrum of distinctives” the mark falls.  At one end of the spectrum are fanciful marks—made-up terms that are entitled to the broadest protection; at the other end of the spectrum are generic terms, which are just words for categories of products or services, and for which no business can claim exclusive rights.

Why Is Trademark Protection Important?

In the United States, rights in a trademark begin to accrue as soon as you start selling products or services under that mark.  However, unregistered “common law” trademark rights are geographically limited to those regions in which your customers are located and those rights can be difficult to demonstrate in litigation.  A federal trademark registration validates your common law rights and expands on them.  In particular, the benefits of a federal registration include the following:

• Confers a legal presumption that the mark is valid and the owner is entitled to the exclusive right to use mark
• Establishes nationwide priority as of the filing date of the application
• Enhances ability to deter and stop use and registration of confusingly similar marks by third parties
• Help attract investors, buyers, partners, licensees
• Ability to use Customs to seize counterfeits/infringing products with Customs
• Automatic access to federal courts, possibility of enhanced remedies for infringement
• “Incontestable” status can be obtained after 5 years of registration and continuous use, and confers additional defensive benefits

A federal trademark registration is a valuable asset and a way to maximize protection for your brand.  A registration may be helpful in defending infringement and dilution claims, potentially reducing risk of litigation and/or forced rebranding, and make it easier for you to enforce your rights against infringers.  In short, securing and protecting your trademark from the outset is a relatively inexpensive process that could save you time, money, and heartburn down the road.

What Steps Are Involved In Securing Trademark Registration?

There are three main steps to securing federal trademark registration: clearance, filing, and prosecution.

• Clearance: Clearance is the process through which we evaluate the risks associated with adopting a new trademark, and identify potential obstacles to registration.  You should conduct clearance on all marks that you plan to use, even if you choose not to seek a federal registration.
• Filing: If you determine that you are comfortable with the risk profile of a proposed mark and want to process with seeking a federal trademark registration, your attorney will prepare and file applications based on either current use or future intent to use the proposed mark.  One of the most advantageous things you can do to protect your brand is to file an application as early as possible.
• Prosecution: Trademark applications mature to registration after a review by an Examiner at the U.S. Patent & Trademark Office, a “publication” period during which third parties may object to the registration of your mark, and satisfaction of other prosecution formalities.

If you’re interested in undertaking this process on behalf of your business, please reach out to your attorney for further guidance.