What’s In A Name? Everything When Using and Protecting Your Business’s Most Important Asset
Brands or marks (trademarks for goods and service marks for services) (now collectively referred for this guide as “Mark(s)”) are a company’s most important asset and can generate consistent and substantial revenues.
The importance of branding your goods or services and protecting those brands can’t be understated. Brands or marks (trademarks for goods and service marks for services) (now collectively referred for this guide as “Mark(s)”) are a company’s most important asset and can generate consistent and substantial revenues.
All companies have and own Marks. Many companies, especially small and start-up ones don’t know this, let alone how valuable Marks are. They don’t think about whether the Marks they want to use are available for their use and if they are, how to protect them to effectively monetized and retain their value. One can also “reserve” a Mark, even if the goods or services haven’t yet been used in commerce.
What’s A Mark?
Basically, a Mark is a monopoly on a word, phrase, symbol, sound, moving image, name, fragrance, color or combination of these used to designate and identify the source and origin of particular products or services. It can’t be used by competitors for similar goods and services. Some famous examples of Marks are Xerox® for photocopy machines and the color pink for building insulation.
Why Is It So Valuable?
Without a Mark to serve as a source identifier, how do your customers or clients know who you are, what you do, what you stand for and that they want your products or services, instead of your competitors’? Imagine selling a Coke ® if it couldn’t be identified as a “Coke®”. Without the “Coke ®” brand, it’s just another cola-flavored soft drink. People buy a Coke® because they want a Coke®. They have a certain expectation of what a Coke® is, what drinking a Coke® means and they want to experience and participate in it.
Additionally, owners of “famous” Marks can often exclude anyone from using them to promote or sell any products or services, even non-competing ones. A great example is Apple®’s Mark of the bitten apple silhouette. This Mark has become very recognizable to consumers, through Apple®’s unique products and their enormous marketing expenditures to promote them. This uniqueness or distinctiveness in the minds of the public through a Mark’s use in commerce in connection with its goods or services is called “secondary meaning” and is the very essence of a Mark. Were Apple® associated with any other goods or services, the average consumer would probably believe it was manufactured or provided by Apple® and would likely buy or use it solely for that reason.
But what if it wasn’t? What if an infringer was using Apple®’s valuable Mark to sell clothes, which were of terrible quality? Not only would the infringer be trading without permission on Apple®’s valuable Mark and all of the marketing money it spent to build it, but the infringer could damage Apple®’s reputation by selling inferior products under Apple®’s brand.
First—Can You Use or Continue To Use Your Mark?
There are two ways I look at Marks– offensive and defensive. By offensive I mean being able to claim a Mark as your own and use it as your brand. By defensive I mean being able to identify if a planned Mark or one you’re already using is available to use as your brand or if it’s already owned by another, whether or not a competitor. You never want to be in a position where you‘ve used a Mark for a period of time, spent time and money to advertise and promote it and begun to create that invaluable “secondary meaning”, only to find yourself threatened with an infringement action if you don’t stop using it immediately.
Infringing another’s Mark can put you out of business. Even if you immediately stop using it when threatened with an infringement action, the infringement’s already occurred. Monetary damages, legal fees and costs can be high and other available damages draconian. Then, if you still wanted to sell your goods or services, you’d need to rebrand them with a non-infringing Mark and again spend enormous time and money to try and re-establish your brand in them.
Both protecting your Mark and determining if someone else has beaten you to it are very cost effective, especially in light of the tremendous value a properly used and protected Mark has. This is not only true when you want to use a Mark in connection with an existing product or service, but also when you want to be first to market with a unique product or service that competitors will want to offer if it’s successful. The iPad® for tablets and “Uber” for alternative taxi services are two examples of the most popular and “go-to” products in their classes.
The Stronger Your Mark, The Easier to Protect.
Trademarks have different strengths, which are determined by the connection of the Mark to their goods and services. Some Marks are so weak, they can’t function as Marks in certain instances. But to be protectable, even strong Marks must be used in a manner that distinguishes their source or origin from those of others.
The various types of Marks, from strongest to weakest are:
- Newly Coined. Made-up words with no connection to their goods or services and which are meaningless without them. “Mattel®” for toys and “Exxon®” for gasoline are examples.
- Arbitrary or Fanciful. Existing words, phrases or symbols, with no connection to their goods or services. “Google®” or “Firefox®” for a computer search engine and “Lucky®” for jeans are examples.
- Suggestive. Marks that require thought or imagination to understand the message being conveyed about their goods or services. They create an indirect mental image of their goods or services, usually through exaggeration or incongruity. “Rent-A-Wreck®” for car rental and “Monster® for energy drinks are examples. These marks are popular with companies because they allow protectable but easy and effective communication with consumers.
- Descriptive. Marks that immediately convey something concrete about their goods or services, like ingredients, purpose or qualities. “Chap-stick®” for lip balm and “Best Buy®” for consumer products stores are examples. These Marks are considered weak. Their scope of protection depends on whether they acquire “secondary meaning”.
- Generic. Marks that aren’t registerable, because they’re the word or words that something is called to describe it. “Paint” and “candy” are examples. Even a strong Mark can become generic if it’s used as a generic term for goods or services and steps aren’t taken to protect it. “Zipper” and “aspirin” are examples. Companies also need to be careful they don’t turn their Marks into generic nouns or verbs in their marketing for them.
Educating the Public.
“Secondary meaning” isn’t automatic. It requires teaching the public about your products or services, why they’re unique, special and of high quality and why they should get them from you and not a competitor. This education usually involves extensive eye-catching and memorable marketing to strongly connect you and your Mark in the public’s minds.
Why Registration Is Important Protection.
Rights in Marks don’t depend on registration in the U.S. Trademark Office. Even though limited “common law” rights exist when a Mark is used in commerce in connection with the desired goods or services, registration has valuable protection benefits that common law rights don’t, isn’t expensive and should be done promptly. Some of these benefits are:
- nationwide exclusivity and protection of your Mark, even if you’re not using it in every state;
- registration of a Mark before a prior user of the same Mark for the same goods/services can
- a strong presumption of ownership and validity, which is especially helpful in litigation;
- some websites only deal with claims of a Mark’s infringement and voluntarily remove that Mark from their site, if it’s registered;
- the owner can only use the “R” in a circle” (®)next to the Mark if it’s registered , instead of the “TM” (for goods) or “SM” (for services) symbol, which is for unregistered Marks . The “R” notice is constructive notice to all and allows the owner to recover profits and damages for infringement;
- a Mark registered for five years on the Principle Register can become incontestable by third parties that want to use or cancel it;
- a Mark can be registered with the U.S. Customs Service for protection against counterfeit or gray market goods bearing the Mark coming into the U.S.
- the ability to register the Mark outside the U.S., often using only one application in as many countries or areas of the world as you want.
Common law rights are geographically limited to where you’re actually using your Mark. For example, if you’re not using the Mark in California, anyone else can use the Mark for similar goods and services there and you couldn’t stop them. But you could if your Mark was registered.
Why Enforcement is Important Protection.
A condition of being granted the monopoly that is a Mark registration is the obligation to police and protect the Mark from infringers. This obligation is designed to protect the public from the potentially harmful effects of infringements of the Mark, including such things as being unsure of the actual source of the products or services they acquire and counterfeit or sub-par goods and services being offered by an infringer under the Mark. Failure to properly and diligently enforce a Mark can dilute your ability to protect it, making it easier to attack by others. In extreme cases of dilution, a Mark can completely lose its protection and be available for use by anyone.
Proper enforcement generally consists of monitoring licenses and other allowed uses of your Mark to assure quality control is maintained and that none of the Mark’s “goodwill”—the propensity of consumers to continue purchasing whatever the Mark identifies--is lessened. A Mark owner should monitor for potentially infringing or confusing similar Marks in commerce and issuing prompt cease and desist letters and takedown notices as necessary. It’s also a good idea to enlist your employees, customers and vendors to alert you to any infringing activity or similar Marks they come across in their daily lives.
One thing is common to all businesses—their brands. Whether you own a restaurant or clothing store, provide digital media marketing or manufacture or sell something, what gives your business value isn’t the food you serve, the fact your provide those marketing services, the clothes you sell or the goods you make. Plenty of other folks sell or provide the same types of things, sometimes the identical things. What gives your business value is that the public wants your food, your particular marketing services, your clothes or your goods, not someone else’s. They can find and get yours because they know your Mark’s associated with them and what it stands for in their minds. But, your brand’s worthless unless you find one that’s available for you to use, you protect and defend it properly and spend the time and money to educate your consumers that the particular product or service they want the most and must have, is yours.
Meet the author: Paul Menes
I provide Creative Law For Creative Endeavors ℠. What’s “Creative Law”? Bringing my unique background and over 30 years’ experience to my practice. What are “Creative Endeavors”? Anything having to do with all areas of transactional entertainment (in music, TV and film, for artists, creators, production, licensing, distribution, live events) and digital media matters (such as social media marketing, content licensing, companies’ online presence, app developers) and related branding and copyright matters.
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