Should you register your brand as a trademark?
If you own a business, you have worked hard to stand out from the crowd and portray your products or services as unique and high quality. From a marketing perspective, your brand is the symbol of your business and the way you are recognized in the marketplace. From an accounting perspective, your brand is part of your goodwill, the intangible asset that makes a business worth more than the sum of its furniture, fixtures and equipment. From an attorney’s perspective, your brand is a trademark, a valuable piece of intellectual property to be protected. The strongest protection available for a brand is to register it as a trademark or service mark[i] with the United States Patent and Trademark Office. Their website is www.uspto.gov.
Trademark has been recognized in the law for hundreds of years. Trademark rights were part of the common law inherited from England, and those rights still exist in state law. But we also have a federal statute, called the Lanham Act, which affords another level of protection to trademark owners.
Traditionally, a trademark was a word or series of words, or an image like a logo. Today, trademark rights are afforded to sounds, colors, and even aromas. The general purpose of the trademark is to convey both the source and the quality of the goods or services. It lets the consumer know where the goods or services come from, and how good they are.
There are two intended classes of beneficiaries of trademarks. The first is the trademark owner. The owner uses the mark to identify their goods and to convey the qualities of those of the goods. When someone sees a watch, and then sees that it is a Cartier watch, Cartier benefits from the trademark conveying its reputation, earned over many years, for high quality of design and manufacturing.
The second class of beneficiaries is consumers. One of the primary purposes of trademark is to prevent consumer confusion about what they are buying. When confronted with a display case full of different brands of watches, the consumer can look for a trusted trademark and have more confidence in his or her purchase. The consumer knows who made the product and where it comes from.
Of course, we all know there are trademark counterfeits and pirates who produce goods inexpensively and illegally slap on a well-known trademark. There are also people who buy these goods, knowing they are not the real thing, but hoping to obtain some of the cachet that goes with owning (or appearing to own) a luxury brand. Trademark registration helps the brand owner fight the pirates. A trademark owner can protect their rights using state law, but there are number of important benefits gained by registering a trademark for protection under the Lanham Act. Some of these are:
- With a registration, you are considered to be actively selling your goods or services throughout the nation and will be deemed to have priority of use, except in places where another person was using the mark before you.
- If another person knowingly uses your registered trademark without your permission on counterfeit goods, and you prevail in an infringement lawsuit, you may be entitled to recover your attorney’s fees and disbursements, and also treble damages, that is, three times the amount of economic damage you prove.
- Registration is considered to be constructive notice to the public that your trademark is protected. Therefore, even an innocent infringer who is not aware of your registration is charged with knowing about that registration and cannot plead ignorance.
- There is a mechanism for inspecting cargo ships at the dock and confiscating infringing goods that are shipped in from overseas. It may be possible to have those goods destroyed in addition to winning monetary damages from the infringer.
- The right to use ®, the symbol of a registered trademark, on the goods or the label or packaging.
There are many things to consider when designing a trademark, using it, and seeking to register it. Will your mark be words, or an image, or both? Do you want to use a specific font? Are colors an important part of your mark? What products are the mark used on? Are you using it correctly on the goods, labels or packaging? Is someone else already using it, or something confusingly similar? Is the mark strong or weak? Made-up words like Xerox and Elantra are strong marks. Weak marks are those that are commonly used (Joe’s Pizza) or generic (Laptop brand of computers) or descriptive (Sports Illustrated).
Once registered, trademarks can be renewed every 10 years. Trademarks are use-it-or-lose-it, so if the owner stops using it, they may lose the rights. But if the mark remains in use, it can remain registered for decades and even centuries.
This article just skims the surface of trademark law. If you own a business with a valuable brand, consider consulting with an attorney who has experience with trademarks.
[i] The word “trademark” is generally used in connection with tangible goods while the phrase “service mark” is used in connection with services. Nearly all of the laws and rules about trademarks and service marks are the same. For convenience, this article will refer only to trademarks, but the same rules apply to service marks.
Gary Schuster is a Partner with the firm and practices Arts & Entertainment and Business Law. He can be reached by phone at 866-303-9595 toll free or 845-764-9656 and by email.