Are You Hitting the Mark? Protecting Your Business with Trademark Law
For most businesses, the name is the brand. It’s how customers find them, remember them, and recommend them. But choosing a great name isn’t enough. Too many companies stop after settling on a catchy trademark—an oversight which can lead to expensive rebranding, cease-and-desist letters, or even litigation. When it comes to creating a trademark, the most important considerations are priority and protection.
Priority – If You’re Not First, You’re Last
A trademark functions as a word, name, symbol, device, or combination thereof used to identify and distinguish your goods and services from those of others. Trademark rights in the United States are based, first and foremost, on use. To establish ownership, the business must be the first to use a specific trademark in commerce in connection with particular goods or services. This is known as “priority of use” and it’s important to conduct due diligence before committing to a trademark.
Imagine someone wishes to establish a stuffed animal company in Louisiana called “Cushie Companions.” A quick online search shows a similar company in New York using the same name. Many business owners mistakenly assume it is safe to proceed with that name in their own state if they have no plans to expand into the other user’s territory. However, if the New York company has secured a federal trademark registration, it holds nationwide priority for that trademark as it applies to those goods and services, regardless of its physical location. Conversely, if the New York company never federally registered its trademark, its rights are geographically limited to the area where it conducts business. In that case, the trademark may be available to use in Louisiana, if the other company is not conducting any business or generating sales in Louisiana. Even then, it would be risky to assume that any company who is conducting business over the internet is not generating online sales and business in Louisiana.
Understanding the importance of priority of use at the onset can prevent costly rebranding, disputes, or even litigation down the line.
Protection – Registration Reaps Reward
Once it has been confirmed that priority of use is established, one should evaluate protection—this step is twofold. First, determine whether the trademark will be afforded protection under the law. Second, decide where all to file for that protection.
For a trademark to qualify for legal protection, it must be distinctive enough that consumers can distinguish it from goods or products sold by others. But what renders a trademark “distinctive?”
Generic terms cannot become distinctive because they are common terms, making it impossible for them to be the subject of trademark ownership rights. For example, “popsicle” is a generic term for a frozen dessert on a stick. If someone were to create a new frozen dessert brand called “Popsicles,” there would be no way to protect the brand’s name.
Arbitrary and fanciful trademarks are the two most secure and protectable types of trademarks. An arbitrary trademark has a meaning but does not describe the product or service it identifies, nor any of its characteristics, like “Apple” for computers. A fanciful trademark conveys no meaning other than the trademarked meaning (i.e., they’re made-up words), like “Xerox” for copy machines. Bottom line: the more unique a brand name is, the greater the likelihood of obtaining trademark protection.
Where people most often fall is somewhere in the middle—that is, a descriptive trademark. Descriptive trademarks are not inherently distinctive because they describe the product or business in a manner that requires no logical inference. For example, if someone were to create a brand of heaters called “Quality Heaters,” the brand name would be descriptive: the intent of the business is to provide products (here, heaters) that are of a suitable quality. However, a descriptive trademark can eventually become distinctive (and thus, registrable and protectable) if it develops what is known as “secondary meaning.” Secondary meaning is acquired when the trademark has been effectively exposed in the marketplace, causing the trademark to be perceived not as a common term, but as a symbol that instantly evokes the source of the business, product, or service.
Once a trademark is deemed worthy of protection under the law, the next consideration is where to file to secure that protection. Opportunities exist at both the state and federal levels, and the appropriate strategy depends on business goals and the desired legal benefits and scope of protection.
At a minimum, state registration is a prudent and beneficial step that all business owners should consider. It provides statutory protections and remedies that unregistered trademarks do not receive, while solidifying evidence of the business’s date of first use in that state.
However, if a company has nationwide ambitions—or even an internet or ecommerce presence—it is wise to pursue federal registration from the outset. This proactive step acquires the most vigorous statutory protection the law has available and puts the entire nation on notice of who owns the rights to that trademark, further safeguarding the time and investment spent in building the brand.
Conclusion – Make Your Mark, and Protect It
Because a brand name is one of the most valuable assets a business has, leaving it unprotected invites the risk of consumer confusion, competitor copycats, and costly disputes. Confirming priority and pursuing the best trademark protection for your business’s needs is a strategic investment that empowers your company to grow and operate with confidence. For more information, contact our intellectual property group at marc.whitfield@taylorporter.com and mary.coles@taylorporter.com.
