What is a Trademark?
Trademarks are often among the most important and valuable assets of a business. It is a visual symbol of good will and reputation. A distinctive trademark allows a business to build public goodwill and brand reputation in the goods or services it sells. Trademarks are words, names, symbols, sounds, slogans and/or colors that distinguish goods from those manufactured or sold by others and to indicate the source of those goods. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms "trademark" and "mark" are often used to refer to both trademarks and service marks. Trademarks, unlike patents, can be renewed forever as long as they are being used in commerce.
Trademarks perform four basic tasks:
1) they identify one seller’s goods or services and distinguish them from the goods or services sold or offered by others;
2) they signify that all goods or services bearing the trademark come from or are controlled by a single source;
3) they signify that all goods bearing the trademark, or services offered under the mark, are of an equal level of quality; and
4) they are a key part of advertising and selling the goods and/or offering the services.
There are important issues to consider when choosing a trademark for a new product or service, or even when choosing a new trademark for an old product or service.
Types of Trademarks
When considering what would denote a good trademark, the distinctiveness of the mark matters since the stronger or more distinctive the mark, the easier it is to register and the easier it is to enforce against unauthorized use by others. Generally there are four categories of strength or distinctiveness. From strongest to weakest these are:
- Fanciful or Coined Marks: A coined or made-up term that has no meaning, other than as a trademark, is the strongest kind of mark. Think of KODAK for cameras, PEPSI for soda, ROLEX for watches or GOOGLE for online services. These marks have no dictionary meanings at all. Because of this, fanciful or coined trademarks are generally afforded the broadest scope of protection against third party use of the mark.
- Arbitrary Marks: Marks that are made up of words that have a dictionary definition, but that definition is completely unrelated to the product or service with which the mark is used. A well-known example of an arbitrary mark is MACINTOSH for computers, OLD CROW for whiskey, DOVE for chocolate or AMAZON for online services. Like fanciful or coined marks, arbitrary marks are afforded a broad scope of protection against third party use of the mark. However, an owner of an arbitrary mark would not be able to stop others from using the mark for goods that are part of the dictionary definition.
- Suggestive Marks: These are marks that are suggestive of an attribute or benefit of the goods or services, but fall short of merely describing the attributes of them. Examples of suggestive marks are AIRBUS for airplanes, NETFLIX for streaming services and GREYHOUND for bus services.
- Merely Descriptive Marks: These are marks that describe an ingredient, quality, characteristic, function, feature, purpose, or use of the specified goods or services. Rights in these marks are very limited and are generally unregistrable and not granted trademark protection. For example, APPLE PIE for potpourri or COASTER-CARDS for a coaster suitable for direct mailing. These marks were not granted registration, as the phrases merely described an attribute of the product. However, a descriptive mark can ultimately function as a source identifier if it acquires secondary meaning. In other words, if a descriptive word is used and advertised exclusively as a trademark for a sufficient period of time, it may come to identify the mark as being associated with a single source of origin for that product or those services, such as SHARP for televisions and HOLIDAY INN for hotel services.
- Generic Terms: These are terms that the relevant purchasing public understands primarily as the common or class name for the goods or services. These terms are incapable of functioning as registrable trademarks denoting source, and are not registrable. Sometimes a registered mark has become the common term associated with a particular category of goods or services to which it relates, thereby ceasing to function as an indicator of origin. This is referred to as “genericide”. Escalator, cellophane, zipper, laundromat and aspirin have all lost their trademark status to genericide. Owner companies of other famous trademarks such as BAND-AID, KLEENEX and XEROX work very hard to prevent their famous trademarks from becoming victims of genericide. Generic designations are not registrable or protectable and once a mark becomes a victim of genericide, its status as a trademark is lost forever.
Trademark Searches
Once you have decided on a trademark, you should make sure that the mark is available. This is accomplished by undertaking a trademark search. A trademark search is a review of publicly available information designed to determine whether a particular trademark is (a) available for use without serious risk of infringement of the rights of a prior user, and (b) available for registration, referring to the criteria for registrable trademarks under U.S. laws.
Searching first helps to ensure that the use of the trademark will not infringe the rights of another party reducing the risk of any challenge or lawsuit from the owner of prior rights in a trademark or trade name. Searching will also help to determine whether the mark is registrable by considering both whether there are prior confusing applications or registrations that might block your application for registration, and whether certain words will not be acceptable for registration.
When undertaking a search, the standard for determining whether a mark is available for use and registration is whether the use of that mark is likely to cause confusion, in the mind of the average consumer, with a previously used or registered trademark.
Generally, searching marks for use and registration in the U.S. is a two-step process: A preliminary search followed by a further more comprehensive search. A preliminary search is a review of pending and registered trademarks on the U.S. Trademark Office (“U.S. TMO”) database to identify marks that are visually, phonetically, or conceptually the same as, or very similar to, the trademark that is to be adopted and that cover the same or similar goods or services.
If the preliminary search does not uncover any obstacles, the next step is a review of common law usages, commercial and marketplace resources, on-line resources such as domain names, digital use of marks, trade directory databases and business name databases in addition to a more in-depth search of the records of the U.S. TMO database. Based on the results of the preliminary search, we will advise as to whether all of the foregoing need to be reviewed or whether a review of the common law usages should be undertaken as the next step.
If the mark is going to be used in connection with goods or services that will be distributed both in the U.S. and in countries outside the U.S. (such as Canada, the EU or South America), we may advise that a third search of the databases in those jurisdictions be undertaken, sometimes called a World Identical Screening Search (WISS) or a Global 63, depending on the search firm undertaking the search.
Filing a Trademark Application in the United States
If the proposed mark has been cleared, an application should then be filed with the U.S. TMO. There are two types of applications that can be filed: One in which the mark has already been used in connection with the goods or services (a “Use Based Application”) and one where there is a bona fide intention to use the mark in connection with the goods or services in the future (an “ITU Application”). If an ITU Application is filed, the application will not mature to registration until proof that the subject mark has been used in commerce in connection with the goods or services has been provided to the Trademark Office.
In addition to the mark (or design or both) to be registered, an application must contain the identity of the applicant, a listing of the goods or services, and the basis on which the application is based. Current per class filing fees paid to the TMO can be found at www.uspto.gov. The fees may vary depending on how the application is filed.
What Happens after the Application is Filed?
The application will be reviewed by a Trademark Examiner who will make a determination as to whether the mark is entitled to registration. Most applications will be reviewed by a Trademark Examiner about 8 months after filing. If necessary, the Examiner may issue an Office Action requiring clarification of certain information or objecting to registration of the mark based on various factors. These can be that the mark is descriptive or that the Examiner uncovered a mark which he/she believes may be confusing to the mark in the application for example. The applicant will be granted an initial 3 months from the mailing date of the Action, in addition to a 3 month extension (for a fee), to respond to the Office Action or the application will be abandoned. When an application is abandoned, the only option is to file a new application. No rights exist in an abandoned ITU Application; the only rights that exist in an abandoned Use Based application are the common law rights that may have accrued in the mark by virtue of the prior use.
After the application has passed examination, the TMO will publish the mark in the Official Gazette to allow interested parties to oppose registration of the application. Interested parties have 30 days to file a Notice of Opposition or an Extension of Time to Oppose registration from the publication date.
If the application is not successfully opposed, the TMO will issue one of two documents: Either a Certificate of Registration for a Use Based application or a Notice of Allowance for an ITU Application. The applicant has 6 months from the mailing date of a Notice of Allowance to either file a Statement of Use or a request for an extension of time to file a Statement of Use. Either document requires a per class filing fee. A maximum of 5 timely filed extensions may be granted; however a “good cause” statement must be made in the second through fifth extension requests and the applicant must also state it’s continued bona fide intention to use the mark in each extension request. Each extension is good for 6 months. Once proof of use is submitted and accepted, the TMO will issue the Certificate of Registration in due course. If use is not made within the 3 year period after issuance of the Notice of Allowance, the application will be declared abandoned.
It generally takes around 15 months for a registration to issue for a Use Based Application if no substantial objections are encountered or oppositions lodged; longer if the application was an ITU Application. The ® symbol can be used only in connection with marks that are registered with the TMO. See below under “Common Law Rights” for use of the ™ symbol.
U.S. Post-Registration Maintenance and Renewal
Trademark registrations remain valid for a 10-year period following the registration date, subject to certain requirements. In the U.S., evidence of continued use of the mark must be submitted to the TMO between the fifth and sixth anniversaries of the registration. (In certain situations, non-use of the mark will not result in cancellation of the registration. The is termed “Excusable Non-Use, but these situations are extremely proscribed and very rare.) If this is not done, the registration lapses and is cancelled before the ten-year anniversary date. Evidence of use must be filed every time the registration is renewed. The registration cannot be maintained if the mark is not being used in commerce in connection with the goods and/or services in the registration. If the registration is not renewed before the due date, the registration will expire. When a registration expires, the only option is to file a new application, which can be a costly exercise since your prior rights are lost forever.
A registration can be removed from the Register upon the challenge of a third party if there has been a prolonged period of non-use. To avoid being vulnerable to cancellation there must be continuous or at least periodic, genuine use of the mark, that is, use not created purely to protect the registration. If the mark is not used, the registrant risks having the registration cancelled for non-use. So long as the mark is in use, trademark registrations are renewable indefinitely.
Common Law Rights
An unregistered trademark or “Common Law” trademark is an enforceable mark that is legally different from a registered trademark, which is granted by statute. Common Law rights accrue by virtue of use of the mark in connection with the goods or services offered thereunder.
As with registered trademarks, a Common Law trademark can utilize graphics, images, words or symbols, or a combination of such, to signify the source of a product or service. Although not required by law to do so, an unregistered trademark owner can use the ™ symbol as notice to the public that the words or symbols, though unregistered, function as a source identifier by the user.
One significant distinction between a federally registered trademark and an unregistered trademark is that the owner of an unregistered trademark does not receive as much protection as the owner of a federally registered trademark, which can be enforced in all U.S. states. In addition, an owner of a federally registered mark can sue for damages (including lost profits), and significantly, recover attorneys' fees and costs incurred in protecting the trademark against infringement.
In contrast to federal registration, Common Law trademarks are usually enforceable only within the geographic region or locale where the owner is using it. When an infringement occurs, the owner of a Common Law trademark may not be able to sue and collect damages or recover attorneys fees; remedies are generally injunctive (a court order for the defendant to cease and desist the infringement).
Since the U.S. follows the “first use rule” when determining trademark priority rights, the owner of Common Law rights trademark can defeat a later-filed registered trademark, if the Common Law owner can show first use in commerce before the first-use date of the registered trademark. For more information please visit https://www.uspto.gov/trademarks