Protect what’s yours: How to create a strong trademark with a new product or business name

Smart Business

(by Jayne Gest with Carl Ronald)

A trademark or service mark identifies a company as the source of a particular set of goods or services. It protects the association, in a consumer’s mind, between goods or services and the company that sells or produces them.

“We try to protect the goodwill a company has earned by registering and enforcing their trademarks to make sure no one obtains an unfair business advantage by trading off our clients’ goodwill in the marketplace,” says Carl Ronald, shareholder at Babst Calland.

Smart Business spoke with Ronald about adopting trademarks.

How long do trademarks last?

Theoretically, trademarks can last forever. Realistically, though, trademark protection lasts as long as you continue to use a name or logo in the marketplace. There are two types, registered and unregistered, and the latter is often called “common law” marks.

A registered trademark is a text or design mark that a company applies for with the United States Patent and Trademark Office. So long as the business continues to use the mark and appropriate maintenance procedures are complied with, the registration will be good for an unlimited number of renewable terms of 10 years each.

Common law marks, on the other hand, last as long as they continue to be used in commerce but convey less protection.

What’s the procedure for protecting a new product or business name?

First, identify the word or logo you wish to use with your product or service, and decide whether you’re likely to use it longer than a few years, in order to justify the cost. Is this a name for a core product, or a slogan that plays off a current event or product line that may change seasonally or annually?

Next, evaluate the strength of the mark. The strongest are made-up word(s) that don’t describe what you sell, like Xerox or Apple. Suggestive marks convey a characteristic of the goods or services being sold but don’t exactly describe them. An example of this slightly weaker mark is Netflix. Descriptive marks describe product features, such as Cold and Creamy for ice cream. It’s natural to want to use descriptive words in the name of a new product or business. Unfortunately, this tendency can lead to the adoption of trademarks that are weak source indicators.

After you’ve selected a mark, a clearance search can ensure your use of the mark won’t create confusion in the marketplace due to another pre-existing mark for similar goods. Assuming there are no conflicting marks, you’re free to begin using it in association with your products and services, while, ideally, filing a trademark application.

What if you expand into a new geography and someone’s already in that market?

This classic conflict is another reason to do a nationwide search and obtain a federal registration. If you’re an unregistered user of a mark, you’re likely out of luck. If you’re a registered user, you’re in a much better position if you registered before the other company began use of its identical or confusingly similar mark. You can likely compel them to stop using the mark. If they started using it first, your federal registration still provides some leverage. While you probably can’t force them to stop using the mark, you would have the power to keep them from expanding.

Where do businesses misstep with this?

Some companies confuse a corporate name with a trademark. The two overlap but aren’t identical. When adopting a new name, the exact name may not be taken, but that doesn’t mean a particular mark won’t infringe on the rights of another.

The question isn’t whether the marks are identical. The issue is whether adopting a mark in association with those particular goods or services is likely to cause confusion in the marketplace. Will consumers not understand the true source of those goods or services? Will they think there’s an affiliation or sponsorship between the two entities? A confusingly similar trademark can create just as many problems as an identical one.

What’s your takeaway for business owners?

When introducing a new product or service name or founding a new company, have a clearance search performed prior to adopting the new name. If the goods or services are offered on the internet or in more than one state, file a federal trademark application to protect your rights.

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