Springfield Business Journal Articles


Trademark Basics

You've worked hard to establish your brand.  Now you need to protect it.  One of the primary ways to protect your brand is by trademarking it.  Here are some issues regarding trademarks of which you should be aware.

What is a trademark?  A trademark (used for products) or a service mark (used for services) is a word, phrase, symbol or design, or combination thereof, that identifies and distinguishes the source of goods or services.  Examples include "Intel," "Fly the Friendly Skies," or the Nike "swoosh."

Are there things that cannot be trademarked?  There are several items that cannot be trademarked with the United States Patent & Trademark Office ("USPTO"), including the following:

    ‚óè    Generic terms cannot be trademarked.  For example, the word "table" cannot be trademarked.

    ‚óè    Likewise, descriptive terms generally cannot be trademarked, at least initially.  For example, "Speedy Delivery Service" or "Springfield Delivery Service" could not be trademarked because "speedy" and "Springfield" are descriptive words.  Words that are geographically or otherwise misdescriptive cannot be trademarked.  For example, using the word "California" in the name of the product when the product has no connection with California and using the name "Super Silk" for shirts that are not made out of silk are misdescriptive.  Descriptive terms can be trademarked once they have acquired "secondary meaning," generally meaning that the public (or relevant market) associates the descriptive name with a particular brand.  "Best Buy" and "Beer Nuts" are examples of descriptive names that have acquired secondary meaning.

  ‚óè    Items that are "scandalous, offensive or immoral" cannot be registered with the USPTO.

    ‚óè    A mark cannot be registered if it is "likely to cause confusion" with another product or service.  Confusion is the main issue in most trademark litigation, i.e., will your mark incorrectly cause people to believe your product or service is connected to my product or service.  The USPTO will make an initial determination of likelihood of confusion in evaluating a trademark application.  However, even if the USPTO grants the application, an existing trademark holder can challenge a new mark.  In evaluating the likelihood of confusion, certain principals apply, such as a written number and the number itself are considered the same.  The word "ten" is treated the same as "10."  Words and pictures are treated the same.  The word "wine" is equivalent to a picture of wine.  Foreign and English words are treated the same.  The word "dog" is equivalent to its Spanish counterpart "perro."  Therefore, marks that are visually distinguishable may be determined to be too similar.

    ‚óè    A mark cannot be registered if it may disparage persons living or dead, institutions, beliefs or national symbols or bring them into contempt or disrepute.  For example, "Kohran" wines was denied registration by the USPTO because the office determined that Muslims would find the name disparaging.

How are trademark rights established?  Trademark rights are created in only one manner – by use.  In order to obtain trademark rights, you must use the mark in commerce, meaning a bona fide use in the ordinary course of trade.  An intent to use is not sufficient.  For example, if you created a mark using the term "Starbucks" before the Seattle coffee company began using it but you never used it in commerce, you would not have rights in the mark.

The first person to use a mark in commerce has superior rights to the mark.  The rights may be limited, however, geographically or otherwise.  For example, the USPTO website shows that the Burger King Corporation first registered its name in 1968.  If you operated a restaurant named "Burger King" in Springfield before 1968, then you would have superior rights to the name in Springfield and could keep Burger King from opening a restaurant here.  This is true regardless of whether or not you had registered the mark in Illinois or federally.  You acquired your rights by use of the name.  Your rights are limited to the area in which you operate because that is where you have used the mark.  You would not be able to stop the rest of the Burger King restaurants from opening nationally.

Establishing the date of first use of a mark can be difficult.  One of the benefits of registering the trademark is setting forth the date of first use before a conflict develops.

In the United States, your use of the mark only applies to the good and services that you produce.  This is contrary to the laws of most other countries which will apply the mark to all good and services or a wide variety of goods and services.  For example, "LexisNexis" established its computer information services in the 1970s.  When Toyota planned to introduce its "Lexus" cars in 1987, the owners of Lexis sued to stop the sale of the cars in the United States.  Lexis won at the trial level but lost on appeal.  The federal court determined that consumers were not likely to confuse the computer information service and luxury cars.

The owners of Lexis also argued that "Lexus" would dilute its brand but lost that argument as well.  Dilution applies to "famous" trademarks.  If a trademark is determined to be famous (based on criteria set out in the federal statute), then the owner can generally stop its use on any goods and services.  For example, Coca-Cola would not register its trademark with respect to bourbon because it does not use its mark on bourbon.  However, because Coca-Cola is so well known, the use of its mark on bourbon would dilute the value of its trademark and would be prohibited.

Can trademark rights be lost?  Yes, as discussed above, trademark rights are established by use.  If you cease to use your mark, it can be deemed abandoned.  Nonuse of a mark for three consecutive years is "prima facie" evidence of abandonment.  At that time, if your trademark is registered with the USPTO, another business can bring a Petition to Cancel your registration and file for a new registration of its own.

These are some basic trademark principals.  In a future column, I will discuss trademark infringement and litigation.
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