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INTRODUCTION TO TRADEMARK LAW
Legal Links<tm>: Chain 1, Link 3
Copyright © 1986-2015 Zegarelli Law Group. All rights reserved.
Written by Gregg R. Zegarelli, Esq.


THE FOUNDATION OF TRADEMARK LAW

Trademarks originated as devices to identify in the marketplace the craftsmen responsible for producing goods for sale. The medieval European practice of inscribing the name or mark of the manufacturer is the direct antecedent of our modern federal trademark law. As a result, trademark law evolved more naturally in the business place as a means of identifying the origin of goods or services. Also as a result, the manner in which a business acquires a trademark is different from other forms of intellectual property such as a copyright or patent. Most significantly, trademark law does not find its authority in the federal or state constitutions, but at common law in the courts.

Notwithstanding the fact that trademark law exists without any relevant statute, the federal and various state governments have passed statutes to clarify trademark law. Congress obtained its power to pass the various trademark acts by means of Article I, Section 8, Clause 3 of the Constitution, which provides: "The Congress shall have Power . . . To regulate Commerce . . . among the several States . . . ."

WHAT IS A TRADEMARK

A trademark can be any word, symbol or device that is adopted and used by a business to distinguish that business's goods or services from those of another business. "Trademark" is a generic term used to describe both trademarks, which are available for goods, and service marks, which are available for services.

It is that association—between a symbol and the origin of the goods or services—that makes a trademark valuable. Because McDonalds chose and adopted a trademark early in its business, and used it consistently, the golden arches have become one of McDonalds most valuable assets. McDonalds now derives substantial revenue merely from licensing the use of its trademarks to franchisees.

ACQUIRING A TRADEMARK

Rights in trademarks accrue on the date of first actual use. Therefore, a business should be somewhat careful to document the first date when a trademark is publicly used with its goods or services anywhere, and also the date when the trademark is used in interstate commerce. An important exception is that a recent revision to the federal trademark law now permits "intent-to-use" conditional applications for registration. If a business is reasonably confident that it intends to use a trademark in interstate commerce, then the more expensive intent-to-use applications may afford protection of a trademark not otherwise available.

Trademarks are recognized independently by the state and federal governments.

Generally, a business will obtain state trademark rights as soon as the trademark is properly used in commerce. A business will obtain federal trademark rights as soon as the trademark is properly used in inter-state commerce. A registration of the trademark is not required—although it is usually advisable. Therefore, prior to using a mark in commerce, a business should be reasonably prudent to determine whether a mark is available for use.

Following are basic questions that businesses should evaluate when deciding to acquire a trademark.

1. Is the trademark available?

A mark chosen by a business to be used as a trademark may not always be available for trademark protection. There are two basic reasons: a) the mark is generic; or b) the mark has already been adopted and used by another business.

a. Determine whether the mark is generic.

There are four categories of marks:

1. generic;
2. descriptive;
3. suggestive; and
4. arbitrary.


1. Generic marks are not available for trademark protection because generic marks are generally the very name of the product or service. For example, a business could not trademark "spoon" for a kitchen utensil.

2. Descriptive marks describe the goods or services. For example, "The Computer Store" for a computer store describes the services offered. Descriptive marks are presumptively not trademarkable. However, descriptive marks are available for trademark protection if the mark has acquired distinctiveness through the use of continuous and exclusive use of the mark generally for a five-year period.

3. Suggestive marks suggest the nature of the goods or services, but require imagination, thought and perception to reach a conclusion as to the actual nature of the goods or services. Suggestive marks, even if partly descriptive, are trademarkable. For example, "Coppertone" for suntan lotion suggests some of the features of the product, but requires imagination to develop the association.

4. Arbitrary marks are the best marks and are clearly available for trademark protection. For example, the term "Kodak" does not otherwise have any relation to photographic equipment.

New businesses often choose descriptive marks because it allows potential customers to immediately know the type of goods or services offered for sale. However, a new business is usually well-advised to adopt and use trademarks that are arbitrary.

b. Determine whether the mark been used by another business.

As in so many areas of the law, first in time is first in right. If another business has already used a similar mark for similar goods or services, then often the best advice for a new business is to choose a new mark.

The only way to obtain some assurance that a trade name, logo or other trademark has not been adopted anywhere in this or any other state is to perform a trademark search. The cost of a search generally ranges between $50 and $500 per trademark. If that seems to be expensive, consider how much it costs to develop a reputation for quality goods and services over the years, and then to find out that business cannot be expanded with that trade name or logo because it would infringe on another business's trademark.

It is important to note that obtaining a fictitious name registration, or a state incorporation certificate, does not grant trademark rights. State corporation bureaus merely permit a business to operate as an entity. Trademark infringement is a separate issue.

2. What types of goods or services are to be sold?

As a general rule, rights in trademarks exist for types of goods or services. For example, an apple may be the trademark of Apple Computer and also the trademark of Apple Records. The basic reason is that the public would probably not be confused into thinking that an Apple Computer was made by Apple Records. It is interesting to note, however, that the multimedia aspects of computers made change the standards of legal review.

3. When were the goods or services sold, or are expected to be sold?

Rights in trademarks accrue on the date of first actual use. Therefore, a business should be somewhat careful to document the first date when a trademark is publicly used with its goods or services anywhere, and also the date when the trademark is used in interstate commerce. An important exception is that a recent revision to the federal trademark law now permits "intent-to-use" conditional applications for registration. If a business is reasonably confident that it intends to use a trademark in interstate commerce, then the more expensive intent-to-use applications may afford protection of a trademark not otherwise available.

4. Where have the goods or services been sold?

Trademarks are recognized independently by the state and federal governments. Generally, a business will obtain state trademark rights as soon as the trademark is properly used in commerce. A business will obtain federal trademark rights as soon as the trademark is properly used in interstate commerce. A registration of the trademark is not required—although it is usually advisable.

LEGAL RIGHTS GRANTED BY REGISTRATION

There are two types of registrations: state and federal. Whether one or both registrations is advisable is a function of the costs and benefits of each registration. As stated, rights accrue on the actual use of the trademark in commerce. However, the scope of the rights is usually limited to the market territory where the trademark is actually used. Therefore, without more, a business would have to do business nationally, in every market, to obtain complete national trademark protection.

The benefits of a state registration vary with the law of each individual state. Generally, state registrations cost between $5 and $40 per registration. Most often, state laws do not afford any more protection than already available without a state registration, i.e. protection in the actual market territories within the state. However, state registrations are usually entered into computer databases that are nationally available; thus, it may act as a deterrent to another business that is performing a trademark search. Furthermore, a state registration may provide evidentiary value in future trademark litigation. It is important to note that state registrations are usually filed by state-office administrative staff who do not perform any research to determine if the trademark is actually available for use.

There are many benefits of federal registration. The usual application fee is $335. On average, the total cost per trademark, including search fees and legal fees, is usually between $1,000 and $1,250. If a someone opposes the registration, fees can be substantially more. Following submission of the application, a trademark examiner will perform research to confirm that the trademark is available and that the application is otherwise proper. If there are no problems, then the trademark will be published in the Official Gazette, which is a national publication reviewed by trademark attorneys. For a period of 30 days following the date of publication, the public is given the right to oppose the registration if a registration would infringe upon a similar mark in which the opposer has interest. If there are no oppositions, then the examiner will issue a registration. The process generally takes about 9-12 months. Even a registration does not guaranty that the trademark is available, but, if registered, the law provides many procedural and substantive advantages not otherwise available.

It is common practice for a businesses to use the "TM" symbol (or "SM" for service marks) to alert the public that a trademark is being claimed. While use of that symbol does not convey any rights, it is good practice. After a federal registration, the business should then use the ® symbol to signify that the trademark as registered.

CONCLUSION

In conclusion, trademarks are of fundamental importance to all businesses. Determining that a trade name, design or logo is available for use as a trademark is part of proper business planning. The first decision of a new business is usually to choose a trade name and logo. That name shortly becomes its most important and valuable asset. To attempt to build a business with a name and logo that may not be available for trademark protection is like building a home on sand.

See also, Legal Links: Chain 1, Link 3A, Eight Common Questions about Trademarks.


Following is the new notice used by the Patent and Trademark Office for self-represented applicants:

TRADEMARK COUNSEL SUGGESTED
 
Because of the legal technicalities and strict deadlines involved in the USPTO application process, applicant may wish to hire a private attorney specializing in trademark matters to represent applicant in this process and provide legal advice.  Although the undersigned trademark examining attorney is permitted to help an applicant understand the contents of an Office action as well as the application process in general, no USPTO attorney or staff is permitted to give an applicant legal advice or statements about an applicant’s legal rights.  TMEP §§705.02, 709.06. 



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Unless otherwise specified above, Copyright © 2004,2008 Technology & Entrepreneurial Law Group, PC. All rights reserved.


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