By Jeffrey L. Michelman
The St. Louis Business Journal recently ran an article on how to select an Intellectual Property attorney, yet solely focused on patents. There are other areas of IP that are equally important. I’d like to focus on trademarks, which are a unique proprietary right for several reasons.
A brand or trademark never wears out; with reasonable care, it can be a perpetual asset. Unlike most forms of property, a trademark becomes more valuable with use. The trademark is a reasonably liquid asset that can be sold or licensed. It is also a powerful merchandising shortcut, inducing consumers to purchase the company’s goods or services.
Yet some myths abound. A business sometimes attempts to protect its name by incorporating, qualifying to do business, or reserving the name in various Secretary of State offices. However, the scope of brand name protection afforded by such measures is rather limited. Such methods do not mean that the company’s name is available for use as the brand on products or services because the company name may still infringe another’s pre-existing trademark. Further, incorporating or reserving a business name does not necessarily create the right to exclude others from using the same or similar name on goods and services. A better method offering more comprehensive coverage at a substantially lower cost is federal trademark registration.
You need not register a trademark to have a protectable, exclusive right to it. Under common law, you can acquire trademark rights in the narrow geographic area of your use. State registration of trademarks provides no more protection than is afforded by common law rights.
However, federal registration of a trademark or service mark provides certain distinct advantages. Federal registration of a mark reserves the mark in the entire country for future use by the registrant, even if its owner’s present use of the mark is currently limited to a small geographic area. Such registration provides evidence of the registrant’s exclusive ownership right, shifting the burden of proof to anyone challenging those rights. In addition, it gives the federal courts jurisdiction to hear infringement claims, thus providing a sophisticated forum and the likelihood of a speedier resolution of any claim of infringement. Federal registration also provides a basis for registration of that mark in foreign countries; and permits a business to record the mark with the United States Custom Service to prevent importation of foreign goods by third party infringers.
The procedure to register a mark in the United States Patent and Trademark Office is somewhat complex and applications for registration are often rejected both for substantive reasons or for technical defects. Thus expert advice should be sought. You can base an application on your actual use of the mark in interstate commerce, or based upon the fact that you have a bona fide intention in the future to use the mark in commerce (but the mark subsequently must be used in the ordinary course of trade, and not merely to reserve a right in the mark, before the actual registration certificate will be issued).
The application to register a trademark is subject to an extensive examination process in the Trademark Office that, among other things, determines whether or not the particular mark you chose is capable of distinguishing the applicant’s goods or services from those of others.
Trademark rights continue indefinitely as long as you do not abandon the mark and you file the necessary affidavits of use and renew the mark every 10 years. It is equally important to police the use of the trademark to prevent it from losing its trademark significance by becoming a generic term. For example, aspirin and escalator were once proprietary marks until they lost their distinguishing characteristics. You must maintain a federal trademark registration by filing a declaration during the sixth year after issuance that the mark is still in bona fide use in interstate commerce in the ordinary course of trade. You must also renew the registration every ten years as long as the mark is still in use. Thus you may own the mark indefinitely if you continue to use it properly.
A careful trademark search should be conducted to determine the availability of the mark for your specific purposes. In fact, any new corporation or LLC name that will be used to identify a product or service should be checked to see if someone can stop you from using your business name because it infringes some other entity’s trademark.
From a marketing standpoint, a mark should be pleasing to hear and see, easy to pronounce and remember, and without unfavorable associations or connotations. From a legal perspective, coined or fanciful words, such as Exxon or Kodak, or words unrelated to the goods or services, such as Apple, form the strongest marks and are entitled to the broadest scope of legal protection. You will find out quickly that marketing specialists often resist such marks, however, believing them to be more difficult to achieve consumer recognition.
Marks that are suggestive of the associated products’ or services’ features (e.g., Whaler fish sandwiches) are entitled to a narrower protection but may facilitate initial consumer acceptance. Marks that describe a quality or element of the goods or services with which they are used, are merely laudatory, are geographically descriptive of the source of the goods and services, or are generally known as surnames cannot be protected unless through extensive use, a relevant purchasing group has come to associate the marks with a source of goods or services. This is known as acquiring secondary meaning. Generic words (i.e., an item’s common everyday designation) cannot be protected as trademarks because no one can monopolize such designations.
If you contemplate foreign sales, you need to assess your trademark for its international viability. For instance, consideration should be given to the literal, slang and symbolic meanings of trademarks in other languages. Seemingly inoffensive trademarks in English might have negative cultural, nationalistic or religious overtones in other countries. Unfortunately, there is no worldwide consensus on trademark laws and laws vary extensively. Thus, legal consultation is required to be sure of successful entry into new foreign markets.
Establishing and protecting your trademark rights and avoiding liability for infringing third party rights may very well be the key to transform potential market opportunities into business and financial success.
Posted by Attorney Jeffrey L. Michelman. Michelman represents clients in intellectual property and entertainment law matters. His practice involves the protection of intellectual property, trade secrets and “know how” and legal issues regarding E-commerce and social networking activities. Michelman’s entertainment law practice involves everything from endorsement, recording and appearance/reality TV contracts to movie/TV options to book deals.
07/25/12 12:40 PM
Filed under Business Law, Intellectual Property, International, Manufacturing and Distribution | Comments Off