Blog

Understanding Trademark Rights

Intellectual Property

12/11/2015

By: Brad Harrigan

Every business owner knows that a trademark is a crucial part of creating brand awareness and communicating product quality to consumers.

Trademarks are not limited to words. Characteristics like the distinctive shape of a Coca-Cola bottle, NBC’s three-note chime or the roofline of Pizza Hut locations all serve as valuable marks that are vigorously defended, and with good reason. Unlike patents or copyrights, properly used trademarks can stand forever.

On the other hand, consider that at one time terms such as trampoline, aspirin and escalator were all trademarks. Due to years of improper use, however, these terms lost their trademark significance and eventually morphed into generic descriptions of the respective products.

Filing is beneficial
While trademark laws can vary widely among different countries, the United States is known as a use-based market, meaning rights are not granted until a trademark is actually used in commerce.

That said, businesses planning to use a certain mark can file an ITU, or intent-to-use, trademark application with the U.S. Patent & Trademark Office before ever actually using the mark in commerce. Although the trademark office doesn’t grant rights until the mark is used in commerce, once that use occurs, the trademark’s priority date will revert to the day the ITU application was filed.

Indeed, registering with the Patent & Trademark Office is the best way to protect your company’s trademark. A federally registered mark gets nationwide priority. When registered, you can also use the “®” symbol, which is extraordinarily helpful in keeping would-be infringers at bay.

Moreover, five years after federal registration, a trademark is considered incontestable in subsequent litigation, meaning the strength and registration of the mark can be questioned only in extremely limited circumstances.

When trademarks are challenged, how do courts determine rights?

Common law rights
Let’s say a New Orleans-area restaurant chain goes by the name of “FoodCo.” Unfortunately, the owner failed to file a federal trademark application and a competitor subsequently opens its own restaurant with the same name.

A certain degree of protection can be found under what is known as common law trademark rights, though there could be some drawbacks in claiming them.

Common law rights are usually limited to the geographic area in which a product or service is sold. In our example, the original FoodCo chain might be protected in New Orleans, though a competitor could be able to open a similar restaurant with a similar name in another market.

In addition, proving what the relevant market is for a common law trademark can be difficult and expensive.

Strength levels
The strength of a trademark is generally determined by its distinctiveness. Generic terms are considered weakest. If you sell butter, for example, don’t expect to trademark the word “butter.”

Descriptive terms are better. These include ChapStick, a product for chapped lips, or American Airlines, an airline that serves the United States. Descriptive terms may or may not be protectable, depending on how the terms are perceived by consumers.

Similar to descriptive are suggestive marks like Coppertone or Chicken of the Sea. Suggestive marks may still describe an aspect of the product itself, but they require a cognitive leap to make the connection between the trademark and the product itself. 

Still stronger are arbitrary trademarks, those with no connection with the product or service they represent. Apple is considered an arbitrary mark because apples have nothing in common with computers and electronics.

The strongest trademarks are fanciful or coined words. These are usually invented for the brand and have no other significance or meaning – words like Kodak, Reebok and Starbucks.

Remain vigilant
When seeking and protecting trademark rights, keep a few points in mind.

Save yourself some time by searching the Internet or the Patent & Trademark Office records for similar terms. Other services like SAEGIS and Thompson CompuMark offer online searches as well. 

A trademark won’t be approved if it’s likely to create confusion with an existing trademark for similar goods or services. When a trademark is ultimately approved, using it in commerce is crucial. Trademark rights are based on use, not registration.

Above all, be prepared to actively defend your right to a mark against third-party use, even if you already own a federal trademark registration. 

__________________________________________________________________________________________

Lugenbuhl offers extensive experience with trademarking matters. Shareholder Brad Harrigan focuses on intellectual property and insurance defense. He has managed trademark portfolios for Fortune 500 companies, small businesses and individuals, covering hundreds of domestic and international trademark applications and registrations. Click here to learn more about Brad’s experience. More information about Lugenbuhl’s intellectual property practice is available here.

The content of this article is not intended to serve as an exhaustive review of the laws, statutes or issues related to trademarks and is not intended to provide legal advice. The opinions expressed through this article may not reflect the opinions of the firm, individual attorneys or clients.