A "trademark," for the purpose of this series of articles, refers to any word, name, symbol or device used to indicate the origin, quality and ownership of products and services. To be afforded federal protection, either the trademark must actually be used in interstate commerce or you must have a bona fide intention to use it. Not all words and symbols are eligible for trademark protection. For example, a chain of stores that repair transmissions under the name "Transmission Repair Shop" could not get a service mark because its name is too generic, yet "AAMCO" is a nationally known mark for the same services.
A properly selected, registered and protected trademark can be of great utility to a growing company that is fighting to establish, maintain and expand its market share. There is perhaps no better way to maintain a strong position in the marketplace than to build goodwill and consumer recognition in the identity selected for products and services that can be protected under federal and state trademark laws. Note that state common law protection and federal protection, while similar, are independent and may be concurrent.
Determining a Registrable Mark
One of the most important benefits to be gained from federal registration is that it serves as constructive notice to the rest of the country that the trademark belongs to the registrant. This becomes an important right if a remote company in a different geographic market subsequently decides to sell competing products under the registrant's marks, damaging goodwill and creating confusion when the registrant enters that local market. So long as a registration pre-dates another's use of the mark, the registrant has the right to demand that the other party discontinue use of the mark, as well as the right to institute a civil action for damages and even lost profits.
Before you try to register a name, a trademark search should be conducted to determine whether a competitor already has secured rights in this trade name or any similar name for the same or a related type of product. Because common-law trademark rights are grounded in actual and prior use, even federal registration does not give a registrant a right to stop others who have used the same mark in their local markets prior to the registrant's application.
Trademarks in the following categories can usually be protected.
- Arbitrary, coined or fanciful is the strongest category of mark that can be protected. The trademark is either a coined word, such as Xerox, or a word in common usage that has no meaning when applied to the goods and services in question, such as Skippy (for peanut butter), Dove (for dish detergent or body soap) or Yoo-Hoo (for chocolate drinks). These types of marks are distinctive for legal and registration purposes; however, as a result of the obscurity of the mark, the burden is on the manufacturer to establish goodwill.
- Suggestive marks (the next strongest category) require the consumer to use some degree of imagination in determining what product or service is identified by the mark. Owners of suggestive trademarks are usually not required to establish "secondary meaning" (see below). Examples of suggestive marks include Chips Ahoy (for cookies), Champs (for a chain of retail sporting goods stores) or Sun Maid (for raisins).
- Distinctiveness must be established by the manufacturer for trademarks that are descriptive; otherwise, such trademarks cannot be protected. This distinction requires the manufacturer to demonstrate that the public associates that particular mark with the goods of the specific producer (known as "secondary meaning"). This category would include names like Holiday Inn (for motels) Reddi Whip (for instant whipped cream) or Quaker Oats (for oatmeal) which are descriptive but nevertheless registered because they are distinctive.
Many marks are refused registration; however, registration will not be refused if the applicant can show that, through the use of the trademark in commerce, it has become so distinctive that it now identifies to the public the applicant's products or services.
Choosing a Trademark
The trademark you choose is the consumer's first impression of the nature and quality of the product or service offered by your company. As a result, some companies select a mark that is easily understood by the public, and in this regard, the trademark serves as a compressed advertisement. While such a mark may please the advertising staff, it is difficult to register and protect because it is often descriptive in nature. Growth companies ready to launch a new product or services should generally resist the temptation to select a trademark that is descriptive, merely because the mark is intended to intimate the nature or quality of the product in its name.
The costs of establishing that the mark has special or secondary meaning to the public, regardless of its descriptive nature, can be very high. On the other side of the spectrum, coined words, such as "Kodak," or arbitrary marks, such as "Camel" for cigarettes, independently mean nothing to a consumer until the manufacturer invests the promotional dollars to establish customer understanding and brand recognition. Some factors to consider in selecting a trademark include:
- nature of the product or service
- purchasing habits of target consumer
- difficulty of recognition and pronunciation (keep it short and easy to read, if possible)
- prior use or registration by competitors and others
- avoidance of misdescriptive, egotistical, trendy or laudatory claims
- anticipated size of promotional budget
- adaptability to various applications and media.
Andrew J. Sherman Partner Dickstein Shapiro Morin and Oshinsky LLP