Selecting a Trademark
Under U.S. trademark laws, a trademark is anything that can identify a source of a product or service. Almost anything can serve to identify a source such as words, logos, colors, sounds, restaurant designs, product packaging, or product designs. (This is a non-exclusive list of potential types of trademarks.)69
A trademark having one or more words is known as a wordmark. Examples of wordmarks include Apple, Microsoft, and General Motors. Each of these wordmarks are associated with a corresponding logo, which can also be protected by trademark rights. Other types of trademarks are more nuanced. For example, Tiffany’s cyan color on its boxes, bags, and catalogs is a trademark. Microsoft trademarked its operating system’s boot up sound. Coca-Cola trademarked the shape of its bottle.
However, many startups and companies do not seek protection for those more nuanced types of trademarks without good reason and funds to do so. Startups and companies more often attempt to trademark wordmarks and logos. In many cases, wordmarks are more important than logos because trademark infringement typically arises due to confusingly similar wordmarks, which is less common with logos. Moreover, consumers generally discuss products and services by referring to the wordmark and not the logo, and internet searches are usually conducted by wordmark rather than logo. The following discussion therefore focuses on how to select a trademark in terms of a wordmark.
Not all wordmarks are equally strong. Some trademarks afford less strength or breadth, whereas other wordmarks are attributed with broad protection. The strength of the trademark is dependent on its ability to be recognized as a trademark and the existence of other, similar marks already in commercial use.
Wordmarks are characterized on a scale that includes generic (not protectable), descriptive, suggestive, arbitrary, and fanciful wordmarks. The inherent quality of a mark depends on its position on this scale, which ranges from “generic” on one end, to “fanciful” on the other. “Generic wordmarks” cannot be registered or enforced against others even under common law. Examples of generic terms would be “aspirin” for a headache medicine using acetylsalicylic acid or “apple” for selling apples. “Descriptive wordmarks” describe a quality or character of the goods being sold. Descriptive wordmarks can be registered on the principal register with the United States Patent and Trademark Office as long as they are distinctive enough that consumers recognize them as a trademark rather than a descriptive term. An example of a descriptive mark is “Crystal Clear” for water. Since the law does not want to remove a competitor’s ability to use these descriptive terms to describe their own goods, competitors can still use the descriptive terms in descriptive ways. For example, competitors could describe their water as “crystal clear.” Suggestive, arbitrary, and fanciful marks are considered strong. The law affords broad protection for these marks since they are not very useful to competitors for marketing competing goods and services. Moreover, consumers can immediately recognize suggestive, arbitrary, and fanciful marks as inherently used as trademarks (i.e., source identifier) and not merely tools to educate the consumer of goods’ qualities or characteristics.
Some companies choose to adopt marks that afford broad protection. EXXON® is a made-up word and therefore a “fanciful” mark. Apple® (computers) is an “arbitrary” mark for a term that appears in the dictionary but has no apparent link to computers or electronic devices. The law provides these marks with broad trademark protection.
EXXON® and Apple® enjoy extra protection for being famous marks. Typically, a trademark owner can assert a claim of trademark infringement against another trademark if two marks and their respective goods and/or services are similar enough that consumers would likely confuse them. Owners of famous trademarks (e.g., marks that are household names) can sue others based on dilution or weakening of a trademark’s strength or unsavory association, even if there is no likelihood of confusion. In other words, even if the goods are different from each other, but the marks are similar, the law affords the famous mark a claim of trademark infringement under the “theory of dilution.” For example, the “McSweet” mark for pickled cocktail onions, pickled garlic, and pickled asparagus was found to dilute the McDonald’s trademark for its family of “MC” based trademarks. When selecting a trademark, be aware of where the proposed trademark lies on the generic–fanciful scale and avoid any similarity with famous trademarks.
Because online marketing is crucial for the success of most products, it is important to consider whether the trademark should correspond with an available domain name. Not all companies incorporate their trademark into their domain name. However, for those that wish to, if a domain name that corresponds with the desired trademark is not available, a different trademark should be selected.
Trademark search and application process
The trademark process has two steps. The first is a search to uncover other trademarks already used in commerce that may be similar enough to the proposed mark that likelihood of confusion would occur. Evaluating the likelihood of confusion is not an exact science. Some trademark owners may be more aggressive than others, and people’s opinions differ regarding whether their trademarks are similar enough to confuse customers.
If a similar, existing trademark is found, the proposed trademark could be infringing on the rights of the existing trademark owner and should therefore be changed and a new search conducted for a different trademark. The search attempts to avoid potential trademark infringement on senior marks, which are likely to be confused with the proposed mark. It is easier to change a trademark before beginning sales. Although this process might be frustrating, businesses should undertake the search process as many times as necessary to end up with a product name that is unlikely to conflict with others.
Established businesses may have been using a trademark extensively and have built up significant goodwill around it without registering it. It would nonetheless be beneficial for those businesses to conduct a search since it could identify potential, future problems that can be addressed immediately instead of under a later threat of litigation. If a “senior mark” is identified early, a business can slowly switch to a different mark and address issues on its own timetable.
There are several types of trademark searches that are usually conducted by attorneys. Attorneys can conduct a limited search in federal and state databases for marks that are similar to the proposed mark. They can also conduct a full search for trademarks similar to the proposed mark in databases beyond federal and state, including the Internet. Obviously, the more databases one searches, the more reliable the search and opinion. I recommend clients preform preliminary clearance searches at www.uspto.gov and use the TESS database to minimize legal fees for trademark searches.
If no similar trademarks are found, the proposed mark may be properly adopted and used to brand the product or invention (given that the search is reliable). Although this clears the mark for adoption and use, it is not a guarantee that a trademark infringement lawsuit will not be asserted against the trademark owner. It does, however, reduce the likelihood of trademark infringement. As stated above, the reliability of the search-based opinion is dependent on the extent and quality of the search.
Once the search clears the mark for adoption and use, the inventor may secure trademark rights. There are three ways to establish trademark rights: (1) common law, (2) state based registration, and (3) federal based registration. There are two governmental bodies where trademark applications can be filed to register and establish ownership of trademark rights (any of the Secretary of States within the United States or at the federal level with the USPTO). There are no filing requirements to secure common law trademark rights. However, to establish protectable common law rights, the trademark owner must prove prior and sufficient use of the trademark in a geographic area where there is conflicting use, which may be difficult.
To secure state trademark rights, the trademark owner may file a trademark application with one or more states. To secure federal trademark rights, the trademark owner may file a trademark application with the USPTO. After filing the trademark application, the inventor may begin to use the mark in commerce. When the application matures into a registration, the trademark registration can be used as evidence of ownership to stop others from using a mark that is substantially similar to the registered mark. Trademark rights last until the owner abandons use of the mark or a court finds that no such rights exist.
State and federal common law trademark rights versus trademark registration
In the United States, common law rights are created whenever someone uses a mark in connection with a product or service. Trademark registration is neither required nor available for common law trademark rights. If a product is sold or a service rendered in conjunction with the mark, common law trademark or service mark rights are bestowed immediately for the benefit of the entity using that trademark or service mark. This is not the preferred means of securing trademark rights because these rights are limited to the geographical area of product sales or rendered services, with some possible geographic expansion for reputation or advertising. For example, if an entity uses a mark in Orange County but does not use the mark in commerce outside of the Orange County area, common law trademark rights are limited to the geographical area of Orange County. If the owner of the trademark is commercially successful within Orange County and plans to expand business to areas outside of the Orange County area (e.g., San Francisco), the owner must use the mark in those areas to acquire common law trademark rights there.
The problem arises when a third-party (e.g., a “good faith senior user”) has already used that, or a similar, mark in a geographically remote area before the entity’s expansion. The third-party is the senior user of the mark in its own geographical area and the expanding entity cannot take away the third-party’s rights. Neither can the expanding entity stop innocent third-parties from using the same mark and acquiring trademark rights in a different area. These scenarios apply when no state or federal registrations are involved.
Even though common law trademark rights are established immediately upon commercial use of the mark, the owner must prove the existence of common law trademark rights to sue a third-party for trademark infringement. This is often difficult to do, and common law trademark rights are therefore not the preferred route to protect trademarks. To show ownership of common law trademark rights, the proof consists of documentary evidence showing sales, advertising, press recognition, etc., associated with the mark in all geographic areas of interest. These documents may, over a long period of time, be difficult to retrieve, making it difficult to assert common law trademark rights during litigation.
Federal and state trademark registration process
State and Federal trademark registration processes are usually simple and without the common law trademark rights’ limitations. State and Federal trademark rights are established through the trademark registration process, which provides statewide or countrywide rights. Federal trademark rights are usually preferred over state trademark rights, though a state trademark registration may sometimes be necessary to sue under some state laws. Moreover, Federal trademark registration costs are not significantly more than state trademark registration costs, especially considering the national geographic scope of federal protection.
Federal trademark rights
Federal trademark rights are established when the USPTO registers the proposed mark with the principal register, establishing a “rebuttable presumption” that the registration owner has the exclusive right to use the goods or services throughout the United States. An example of a federal trademark registration is shown in Appendix D. Upon federal trademark registration, the federal trademark rights relate back to the filing date of the federal trademark application. Even if the trademark owner uses the mark in only one location, the registration establishes nationwide rights so that the trademark owner can slowly expand into new geographical regions. Furthermore, the registration gives “constructive notice” of the trademark thereby divesting third parties of any rights they may have acquired through common law.
If there is a senior user who used the mark before the filing date of the Federal trademark application, the senior user may have the right to continue using the mark only in his or her geographical region. The registration would freeze the senior user’s rights to the current geographical region of use.
Federal trademark registration is an inexpensive way to demonstrate ownership of trademark rights to the mark throughout the United States in contrast to the burden of collecting and storing documents related to the use of the mark in various geographical regions to prove ownership of common law trademark rights.
State trademark rights
State trademark rights are established through a state registration process. Each state has its own registration process and trademark laws. A state trademark registration provides no enforceable rights in a different state. A state trademark application must be filed in each state in which state trademark rights are desired. It is therefore more cost effective to seek federal trademark rights if trademark rights are sought in multiple states. For a general overview of trademarks, see Chapter 3.