As previously discussed, the main pillars of Intellectual Property are Patents, Trademarks, Copyrights, and Trade Secrets. We are now going to discuss Trademarks in greater depth.
USED TO IDENTIFY SOURCE OF GOODS
Trademarks identify a source of goods or services.
“A trademark can be any word, phrase, symbol, design, or a combination of these things that identifies your goods or services. It’s how customers recognize you in the marketplace and distinguish you from your competitors.
The word ‘trademark’ can refer to both trademarks and service marks. A trademark is used for goods, while a service mark is used for services.”, What is a trademark? | USPTO.
(Throughout this paper, “Trademark” will refer to trademarks and service marks. The term “Goods” will be used to refer to both goods and services collectively.)
INDICATOR OF COST AND QUALITY
Trademarks are usually paired with a specific level of quality and cost. Using trademarks is a way for consumers to quickly find and purchase Goods of the cost/quality they expect. The consumer’s expectations may be formed from a previous purchase of Goods from a specific source, advertising, reviews, or word of mouth.
SHORTCUT FOR PURCHASING
Consumers use trademarks to buy Goods from desired entities. A person buying a Lexus would expect a different quality and cost than a Nissan. Trademarks are indicators of a source that typically provides consistent goods/services. Therefore, the consumer does not have to analyze the Goods and quality before making a purchase but can recognize a trademark and expect the Goods to be the same as those previously purchased, advertised, or reviewed. Therefore, a trademark is a shortcut used by consumers in purchasing.
Trademarks are based on the assumption that a consumer can distinguish the difference between trademarks and can recognize the desired trademark. If two or more trademarks are similar for similar goods, this can cause consumer confusion. The consumer is not sure if the goods he/she is buying are the same as the previous good purchased or the reviews the consumer has read.
The USPTO has an examination system in which goods are assigned to classes. When an entity files for trademark protection with the USPTO, a search is performed for similar names (or logos) in specific classes. An Examining Attorney then examines the search to judge if there is a ‘likelihood of confusion’ between the trademark sought to be protected and those found in the search. The examination considers both the similarity of the trademark names (or logos) and the goods. Trademark applications that cause a conflict with known trademarks are rejected. The only trademarks registered are those which do not cause a likelihood of confusion for consumers. Those trademarks registered should be unique in their name and associated goods.
TYPES OF TRADEMARKS
As the USPTO website indicates, Trademarks can be a “… word, phrase, symbol, design”. A word or phrase is typically standard alpha-numeric characters.
A symbol can be stylized characters, images, logos, or combinations of these.
There are also color marks, such as the shade of pink Owens Corning uses for its insulation. There are also video trademarks, such as the short clips movie production companies play to identify themselves before a movie. There are also sound marks, such as the T-Mobile five notes played on each of its television and radio commercials.
A Trademark may relate to a single Good, such as “Mustang”. A trademark may also indicate a company that produces a group of products, such as “Ford”. This trademark is also referred to as a ‘House Mark’. Either refer to the same source of Goods, the Form Motor Company.
As the reader may have noticed, we refer to a ‘source’ of Goods instead of a manufacturer, wholesaler, or retailer. A trademark owner can license the use of trademarks to various entities but is obliged to maintain a certain quality level of the Goods. Therefore, an independently owned Ford dealership has a contractual right to advertise and sell Goods using trademarked words, phrases, logos, sounds, etc. owned by Ford Motor Company.
OBTAINING A TRADEMARK
One acquires ‘Common Law’ Trademark rights by selling Goods in connection with your Trademark name (‘in commerce’). Common Law gives the Trademark owner priority in locations where the Trademark owner is the first to sell the Goods with the trademark, assuming that there are no other similar Trademarks for similar Goods previously sold in that location.
Similarly, the Trademark owner has no Common Law Trademark rights in locations where he/she has not sold the Goods.
If the Trademark owner meets the requirements of the USPTO, he/she will receive a Registered Trademark. A Registered Trademark covers all states and territories of the U.S. as of the date of registration of the trademark, even if sales were made in a given location. It also gives the trademark owner the presumption of ownership and validity, allows the Trademark owner to bring suit in federal court, and allows for statutory damages and other benefits.
ENFORCING A TRADEMARK
In the event of an infringement of a trademark, the trademark owner typically has the exclusive right to enforce (or not enforce) a trademark. Enforcement may begin by sending a ‘Cease and Desist’ letter to the alleged infringer.
If the trademark is registered with the USPTO, then the trademark owner may file a lawsuit in Federal District Court alleging infringement of a federally registered Trademark. These lawsuits can be expensive and last many months but can stop ‘knock-offs’ from capitalizing upon the ‘Good Will’ you have developed in your Trademarks. The process usually involves a ‘cost-benefit’ analysis as to whether a Trademark Infringement lawsuit is filed.
If there is an exclusive licensee, the exclusive license may grant the licensee the ability to enforce the licensed Trademarks.
Since trademarks evolve to symbolize the company’s achievements over time, they are closely related to the ‘corporate identity. This relation to corporate identity is sometimes the most valuable asset a company owns. Think of the difference in the value of a hamburger fast food restaurant named “Joe’s Burgers” vs. “Burger King”.
In summary, any accomplishments, advantages, and other “Good Will’ of a company are associated with their corporate identity and Trademarks. Therefore, companies must select and protect unique names for their products and services. Trademarks will allow them to be clearly and correctly identified by consumers and prevent others from capitalizing on your company’s ‘Good Will’.