Branding, Naming, & Trademarks

 

In today’s challenging economic environment, businesses are looking for

ways to improve their competitive advantage. One important way is through

branding. Branding consists of sending a uniform message to consumers and

customers about the quality of goods and services being offered.

At the heart of any branding campaign or program is one or more

trademarks.

 

A trademark is any word, logo, symbol, device, or virtually

anything else that identifies the source or origin of goods and services. It can

be as simple and common as a word, and it can extend as far as sounds,

smells, and colors. Next time you buy some McDonalds French fries, look at

the bottom of the box. You will see a notice indicating that the design of the

box is a federally registered trademark.

 

Trademarks create:

• A common theme through a business

• Lets others know about what is being offered

by the trademark owner.

 

There are essentially two ways to encounter problems with the use of any

trademark. First, by failing to clear the trademark for potential

infringement, and second, by failing to take steps to register and enforce the

rights available to trademark owners.

 

Trademark rights accrue at common law. This means that before there

were any statutory schemes for registration of a trademark, courts found

enforceable trademark rights for the user of a trademark.

 

The first user of the trademark would prevail over a subsequent

user of another trademark that was deemed to be confusingly

similar to the original mark.

 

Registration of a trademark enhances the rights of the trademark

owner, but the general rule that the first to use a trademark prevails

is not overridden by trademark registration.

 

Given that trademark rights accrue at common law, before any new

trademark is adopted and used, a comprehensive search should be completed

to determine if there are any prior uses of an identical, similar, or otherwise

confusingly similar mark. If there are any such prior uses, then the

trademark should be abandoned, and another trademark adopted.

Caution should be used when naming a business. The standard for

reserving and obtaining a business entity name from a state agency is much

different than the standard for using a trademark in commerce. Anytime a

business name is also used to identify the source of goods and services,

which is very broad, the name is also a trademark. A business name may be

available through the applicable state agency, but the use of the mark in

commerce may constitute trademark infringement. There should be little

comfort in knowing a state agency has approved the name of a new business

entity, if the name has not also been cleared for use as a trademark.

Similarly, a domain name may also be a trademark, and the same process

should be followed.

 

Trademarks can develop significant economic value. One report indicated

that the Coca Cola trademark was valued between $65 and $85 billion. That

did not include the bottling plants, the recipe for the drink, or any other

physical assets. It was the value of the intangible intellectual property. In

addition to the number added to a balance sheet, trademarks can create

significant goodwill.

 

Consumers frequently choose one brand over another because

of the trademark. Competing products may be very similar, but

because of the goodwill of the known brand, a consumer will

frequently choose the better known product.

 

Trademarks may be protected by filing for and obtaining registration, and

by implementing a good trademark compliance program, particularly if the

trademark owner licenses the trademark to third parties. Among other

things, a trademark compliance program can minimize the risk of losing

valuable trademark rights.

 

When a trademark is used, it is important to display appropriate

trademark symbols, and to display them correctly. If a trademark owner fails

to correctly display the appropriate notice for a federally registered

trademark, no profits or damages may be recovered in any lawsuit for

trademark infringement, unless the defendant had actual notice of the

registration. Common law trademark symbols may also be used to support

the owner’s position that the term or other source indicator is being used as

a trademark.

 

Trademarks are an important means of helping a business paint a

picture of the consistency of the quality of goods and services being offered,

and how they are delivered. Avoiding potential infringement litigation and

protecting valuable trademark rights will help further the strategic

objectives of any business.

 

Trademark Rights & Benefits

»Trademark rights accrue at common law, which means that users of trade

marks have rights, regardless of whether federal or state registration is

obtained. This is both a benefit and a caution. It is a benefit,

because nothing more needs to be done beyond using the mark to acquire

some fundamental rights. It is a caution, because that means that other

users of trademarks also have rights. If you happen to be the junior or

subsequent user of a trademark, you may be infringing on the trademark

rights of others.

 

Trademark Infringement & Clearing Process

In order to avoid, or at least minimize the risk of infringement, no new

trademark should be adopted, or no trademark should be used on new

products or services without going through a clearance process. In

addition, if the mark is cleared for use and registration, consideration

should be given to registering the mark, either in the United States Patent

and Trademark Office, or in the applicable state. Here are the steps:

 

Knock out search. A knock out search is a quick and inexpensive way to

determine if the potential mark should be “knocked-out” of consideration

before spending money on a comprehensive search or developing goodwill

in a mark through use and advertising.

 

Comprehensive search. A comprehensive search consists of searching

all of the trademark records of the United States Patent and Trademark

Office, the state records for all fifty (50) states, common law databases

which are determined by the nature of the goods and services to be sold

under the prospective mark, domain names, websites, and business names.

Comprehensive searches require trained professionals who know what

and how to search.

 

After the search is completed, the search results should be reviewed and

analyzed by a trained professional and advice given on whether the mark

is available for use and for registration. It is critical to recognize that

simply because a business name or domain name has been cleared, does

not mean the same term may be used as a trademark without clearance

for use as a trademark.

 

Domain names. In today’s environment, a separate domain name

search should be conducted. If a reasonable domain name using the

applicable trademark is not available, consideration should be given to

abandoning the prospective mark, and adopting a new mark.

 

When you do a comprehensive search, and an appropriate domain name is available,

an application for registration should be filed. Although fundamental

trademark rights accrue at common law, there are significant benefits for

trademark registration.

 

If the mark will be used exclusively within a specific state,

consideration should be given to filing for registration in that

state. State registration is less expensive, and takes less time

than federal registration.

 

If the mark will be used in interstate commerce, or across state

lines, consideration should be given to filing an application in

the United States Patent and Trademark Office.

 

There are two types of applications that may be filed in the United

States Patent and Trademark Office. One is an “actual use” application.

The other is “an intent to use” application. As the name suggests, an

intent to use application may be filed if the applicant intends to use the

mark in the future, but the mark is not yet being used in commerce. If

the intent to use application proceeds to registration, then the date of

filing of the intent to use application becomes the constructive date of

first use.

 

Trademark symbols

On the first use of a new trademark, and all subsequent instances

before federal registration, the ™ symbol may and should be used. As

soon as the mark is registered in the United States Patent and Trademark

Office, the registered trademark symbol ® should be used.

 

Use as a trademark

» Trademarks should be used exactly the same each time and in their

entirety, always be used as adjectives, and not as nouns, used consistently

for the same goods or services, and should be in a prominent font and

location.

 

Questions & Contact

For more information about Trademarks and for assistance in further

research and registering with the State of Utah or Federal Government,

please contact Fluid’s friend in these matters:

John H. Rees | Attorney At Law

Callister Nebeker & McCullough

P: (801) 530 – 7388

E: jhrees@cnmlaw.com