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Trademark law is becoming increasingly important as businesses seek to protect and enhance the value of the goodwill that has built up as a result of the business' products and services. Each year, several hundred thousand applications for trademark registration are filed, many of them for federal trademark registration. Indeed, applications for trademark registrations are seen by some as a good leading indicator of economic conditions (a steep drop in federal trademark applications, for example, preceded the 2001 bursting of the Internet bubble).
While trademarks are important to businesses, many business people don't know much about them. Here is a brief primer on trademark law to help steer you towards choosing the right trademark and protecting it well.
is any word, phrase, shape, design, color, sound or even smell that identifies
one party's goods or services from those of others.
A service mark
is similar to a trademark, except a service mark identifies and distinguishes the source of a service rather than a product. Both trademarks and service marks are often referred to under the rubric "trademarks."
Trademarks can be among a company's most important assets since they represent the goodwill that a company has amassed, often over the course of many years. When properly used and protected, a trademark lasts forever. However, when misused or abandoned, a trademark loses its practical value and legal protection.
To be valuable, a trademark must be distinctive. Trademarks vary in the amount of legal protection that the courts give them with the most distinctive being the most protected. Marks fall into several categories (listed below from most to least protected):
fanciful - a term created solely for the purpose of being a trademark (such as Exxon);
arbitrary - a term that neither suggests nor describes any ingredient, quality, or characteristic of a product (such as Apple, for computers);
suggestive - a term that indirectly suggest something about the product or service (LinkSys, which is used for a brand for networking equipment); or
descriptive - a mark that describes some element of the goods or services (for example, Kentucky Fried Chicken). Descriptive marks can only be federally registered they develop what's called a "secondary meaning" (which means that when people use the term, they associate it with a particular business).Generic terms (for example, "car") cannot be trademarks. Once a company has settled on a trademark, it should use the mark consistently and make sure its competitors aren't using marks that might be confusingly similar with the business' mark.
Trademark rights arise from either actual use of the mark or the filing of a proper application (following which actual use must eventually occur) to register a mark with the United States Patent and Trademark Office (USPTO). The cost of the application is typically under $1000 if done through an attorney.
Unlike copyrights or patents, trademark rights can last indefinitely if the owner continues to use the mark. The term of a federal trademark registration is 10 years, with an unlimited number of 10-year renewal terms available.
Trademarks may be registered with the USPTO. Once a trademark has been registered, the owner of the registration is the only one who may use the mark in the United States in conjunction with the goods and services for which it's registered. After registration, the symbol ® should be used in conjunction with the mark. The ® is a company's "no trespassing" sign, giving notice to potential "trespassers" that a company is claiming property rights in the mark, and reduces the risk of infringement.
The right to an exclusive use of the trademark may be lost if a mark becomes the generic
name for particular goods. (For example, aspirin, thermos, and cellophane all began as trademarks, but are now generic terms with no legal protection.) Trademark infringement
occurs when one business uses a trademark in a manner that is "likely to confuse" the relevant consumer into thinking that the goods or service associated with that mark originate from the same source as those of another person's mark. Bad intent is not required for a finding of infringement. Trademark dilution
is different from trademark infringement in a number of ways. Under federal law, only "famous" marks are subject to dilution. Under state law, a mark need not be famous in order to give rise to a dilution claim. No likelihood of confusion is required for a dilution claim (in other words, the consumer seeing the allegedly diluting mark need not believe that the owner of the famous mark is the source of the goods or services being offered under the allegedly diluting mark), rather trademark dilution law is designed to protect marks from subsequent uses that blur
the distinctiveness of the mark or tarnish
or disparage it. Blurring
occurs when the strength of a mark is undermined through its association with dissimilar goods. For example, Tiffany branded snowmobiles or McDonald's branded garden tools would be likely to be seen as "blurring" uses of those well known marks. Tarnishment
occurs when the mark is, well, tarnished. This usually occurs when a mark is used by another in connection with inferior or unseemly products or services. A common example would be the use of a well know mark (or a mark similar to a well know mark in connection with a pornographic website (e.g., Toys "R" Us versus the owners of the Adults R Us web site). In cases where marks are not identical, the Supreme Court recently held that actual dilution (i.e., lessening of the selling power of a mark) must occur before a successful dilution claim can be brought.
When trademarks and trademark law are used properly, both businesses and the consumer will benefit. It pays to do your homework in choosing a mark and protecting it from misuse by competitors.
is a partner at the law firm Michael Best & Friedrich, LLP, focusing his practice on intellectual property law with an emphasis on trademark law as well as software and licensing agreements. He can be reached at firstname.lastname@example.org
The opinions expressed herein or statements made in the above column are solely those of the author, & do not necessarily reflect the views of Wisconsin Technology Network, LLC. (WTN). WTN, LLC accepts no legal liability or responsibility for any claims made or opinions expressed herein.