Practice Spotlight – On Your Mark, Get Set, Think: Considerations in Selecting a Trademark

December 2015

By: Nathan Harris

For many businesses, dreaming up a trademark—whether for a new offering or a company-wide rebranding—is an exciting time. This excitement often fuels an urgency to register the mark with the U.S. Patent & Trademark Office (USPTO). A federal trademark registration offers many advantages. For starters, registration gives the mark owner nationwide priority, as of the filing date of the trademark application, against later users of the mark. The familiar registered-trademark symbol (®) itself is often a powerful deterrent to would-be infringers. For those infringers who don’t take the hint, a trademark registration increases the monetary damages available to the registrant in an infringement lawsuit, and creates a legal presumption that the registrant is the legitimate owner of a valid trademark.

Before investing the time and money in launching and attempting to register a new mark, though, ask yourself: how protectable is the mark, who will own it, and how will that owner be using it? Asking these questions at the outset will help identify issues early and avoid unnecessary expense and uncertainty down the road.

Question #1: Is the mark protectable?

 A trademark (or service mark) is a designation used by a business to identify and distinguish its goods or services from those offered by others. This article is mostly focused on word marks (which broadly cover a word in any format, color, or typeface), though it’s important to note that a mark can also be a symbol, design, color, scent, or sound.

To be registrable, a mark must be distinctive of the covered goods or services. Inherently distinctive marks, such as coined terms (EXXON for oil) and arbitrary terms (APPLE for computers), are among the strongest types of mark. Suggestive marks, which require thought or imagination to draw a conclusion about the nature of the goods (NOBURST for liquid antifreeze), are also inherently distinctive, strong marks.

However, terms that are descriptive (APPLE PIE for scented potpourri) or that are primarily merely a surname (SMITH’S, or GOULD HOTEL) are not inherently distinctive, and are generally not registrable unless one can demonstrate that the mark has acquired distinctiveness through extensive marketing, sales, or exposure to consumers who have come to associate the mark with the goods or services at issue. Similarly, marks that contain well-known geographic terms (NEW YORK WAYS GALLERY for an art gallery in New York), while not initially protectable, may be registered upon a showing of acquired distinctiveness. But geographic marks that are deceptive (SONOMA for a wine grown and bottled in Los Angeles) are never registrable if the geography-goods connection implied by the mark is material to a consumer’s purchasing decision. Generic terms (COMPUTER for computers), or “immoral or scandalous” terms are also not registrable.

In short, where descriptiveness (or a surname, or a geographic term) is a feature of your chosen mark, demonstrating acquired distinctiveness may be possible. Doing so takes time and money, and success is far from guaranteed. You may still be able to use a mark that is not registrable; but when selecting a mark to invest in and protect, remember that an inherently distinctive mark is your best bet.

Question #2: Is the mark likely to cause confusion with another mark?

A mark is not entitled to be registered or used when it would create a likelihood of confusion with an earlier mark. In the United States, trademark rights can arise through common-law use of the mark in commerce, or through filing a trademark application and registering the mark. The earliest priority wins, and the first person to use or apply for a mark will generally have priority over later users wherever the first user has actually used the mark, or, if a trademark application has been filed, across the entire United States.

In considering whether a likelihood of confusion exists, the USPTO and the courts will consider similarities between the marks, similarities between the parties’ goods and services, and any overlap in the channels of trade in which the goods/services are offered, among other factors. There is no magic formula, but generally speaking, the more similar the marks (or goods/services), the less similar the goods/services (or marks) need to be for a likelihood of confusion to be found.

When considering a potential mark, the first step is to do some web research. Perform Google searches, visit domain names incorporating the mark, and search the USPTO’s trademark database, available at Internet searching may be more fruitful for some areas (such as software or online offerings) than others (Amish furniture). But if you do some searching and don’t come across any ongoing, earlier uses of the proposed mark in connection with goods or services related to your own, that’s often a good sign.

If these initial search results are promising, you can ask your trademark attorney to commission a more exhaustive search. Commercial search companies provide comprehensive searches of federal and state trademark databases, the web, yellow pages across the country, corporate and regulatory filings, and domain name registrations. By performing the initial searching yourself, you can save a lot of time and money by identifying potential issues before embarking on the more costly comprehensive search, which can easily cost $1,000 for the search results and attorney fees to review and summarize the results.

Question #3: Who will own the mark?

While patents and copyrights can, with some exceptions, be readily bought and sold, trademarks are different. A trademark must be used by either the owner or the owner’s licensee. Failure by the mark owner to adequately control use of the mark may lead to loss of the trademark and cancelation of the registration. This “control” aspect can quickly become unwieldy when a trademark registration is owned by multiple entities.

Practically speaking, a mark used by a corporate entity should generally be registered in the name of that entity. Many times, a mark is selected around the same time the corporate entity is being formed, and the idea often arises to file a trademark application in the name of one or more individual founders, to be transferred to the corporate entity after it is formed. This introduces a number of potential pitfalls. First, this strategy may raise questions later about which entity was using the mark when, possibly jeopardizing the registration. Second, an intent-to-use application cannot be transferred until after use of the mark has begun; attempting to do so earlier will render the application void, so the planned transfer of ownership may be delayed for months or even years. In the meantime, individuals come and go from companies, so giving them ownership rights in a mark is therefore inviting a future dispute as to who owns the mark.

Unless there are compelling reasons to file a trademark application without delay, it’s advisable to take the time to create the corporate entity first, then file the trademark application in that entity’s name. Also, avoid having multiple owners of a mark unless you have a very good reason to do so.

Question #4: How are you planning to use the mark?

In order to register a mark, one must prove that the mark is in use “in commerce.” In the case of goods, that means the mark must be printed on goods actually sold to the public, labels or tags affixed to the goods, or point-of-sale displays where the goods are sold. Service marks must be displayed in the sale or advertising materials of services being offered in commerce.

This relatively narrow definition of “use” precludes certain categories of would-be marks from being registered. For example, filing a trademark application in an attempt to merely grab up the latest catch phrase or Internet meme will be unsuccessful without proof that the mark is being used as a source identifier of goods or services. Similarly, the corporate name of a company that conducts business under a fictitious trade name (or “d/b/a”) will likely be unregistrable if the corporate name is not being exposed to consumers in connection with the offer of goods and services. Finally, words or slogans used solely in an ornamental way, such as on the front of a t-shirt, are not registrable because consumers would likely view the wording as expressive content, not a source identifier.

During pendency of the trademark application—which may last for several months or even years—it is especially important to use the mark properly, as the USPTO may (and often does) access an applicant’s own materials, such as webpages, to ascertain how the mark is being used. Be sure to use your mark as an adjective modifying a noun (GOOGLE search or RAY-BAN sunglasses), not as a verb (“Google it!”) or a noun (“Ray-Bans”). Be wary of language on your website or in marketing materials that may give rise to a mere descriptiveness rejection. Consider using the TM symbol after the mark, which lets the world (including would-be infringers) know that you consider the mark to be a source identifier.

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By asking these initial questions about a proposed mark, issues can be identified early in the trademark process. Selecting a strong and protectable mark, ensuring that the ownership of the mark and related registrations is properly reflected, and using the mark correctly are crucial steps in creating and protecting a mark that will continue to accrue good will and value in the years ahead.