Trademarks
Trademarks are an important tool for companies that develop and maintain brand names. Well-known brand names are used to forge direct ties with consumers or a diverse distribution system. Brands reduce the marketing costs of companies as end users rely on the reputation for quality embodied in the brand.
A trademark is any word, name or symbol used by a manufacturer to identify and distinguish its products from those manufactured by others. A trademark identifies the source of the product rather than the product itself. For example, DELL is a trademark for a generic product—the computer. The DELL trademark indicates that the Dell Corporation is the source of the computer bearing the trademark, which serves to distinguish it from computers manufacturer by others.Unlike patents, where the federal government is the only power that creates and enforces the rights, trademarks exist and can be protected under state and federal law. Also unlike patents, legal rights in a trademark are established only by using the mark in commerce. Finally, it is not necessary to register a trademark with the government to obtain legal rights, although federal registration provides a number of advantages.
Federal trademark registration gives a company the exclusive right to use the mark throughout the entire United States, even though the product may be sold only in one region. Federal registration plus five years of consecutive use is conclusive evidence that the mark is valid and that the owner has the exclusive right to use the mark in commerce. Finally, a registered trademark often deters others from using the same or a confusingly similar mark, as most companies search the register of federal marks when making a name selection.
A trademark must be distinctive. A distinctive mark is one that is unique when used with a particular type of goods. Distinctiveness is measured along a spectrum, from those that are fanciful (like EXXON for gas) and arbitrary (like APPLE for computers) to those that are merely descriptive (like YELLOW PAGES for phone directory). Marks that are descriptive, like TENNIS SHOE for tennis shoes, are not trademarks at all, since they merely describe the goods. In the middle of this spectrum lie suggestive marks, words that tend to reveal or hint at an attribute of the goods, such as COPPERTONE for suntan lotion. Marks can upgrade their status over time if they acquire secondary meaning as consumers grow to recognize the mark as identifying the source. Substantial expenditures on advertising and continuous use for a number of years can create secondary meaning.
A trademark must not cause confusion with a pre-existing mark. Conflicts may arise where two marks will be used in the same market for related products or services. Similar trademarks that are used on very different products can generally be registered, unless one of the marks is very famous. The following factors are used to determine whether one trademark is confusingly similar to another:
1. Whether the marks are similar in appearance, sound, and impression.
2. Whether the products to which the marks are attached are similar.
3. Whether the channels of trade in which the goods are distributed overlap.
4. How consumers purchase the goods.
5. The fame of the prior mark.
6. The extent of any actual confusion among consumers
A federal trademark owner has the exclusive right to use the mark on the specified products throughout the United States. The right can last forever, but it can be lost if the mark is no longer used or if the mark becomes generic. Marks can become generic if the owner is not vigilant about enforcing the mark against obvious infringements. The trademark owner can sue the infringer to stop the conflicting use and may also recover damages, profits, court costs and attorneys’ fees.
Federal trademark protection is secured by filing an application with the Patent and Trademark Office. Trademark examiners review the application and the database of prior registrations to determine whether to grant the application. Although federal registration provides certain advantages, only actual use of the mark grants enforceable rights.