Being first in time to use a particular business name, mark or logo for a particular type of product or service is the most important aspect of protection for business names in the United States. A user who is first in time and continues using will have rights superior to any other user’s rights, even a user with federal registration.
What happens if I come up with a name or logo for my company, product or service, but don’t register it or do anything else?
The common law of trademarks protects business and product names and logos from duplication and infringement in many states. If you’re the first to use a protectable name or logo “in the manner of a mark” you’re the owner of that mark. It’s that simple.
What’s the definition of a trademark?
A trademark is
- a word or design
- actually used by you, with respect to a particular company or product (goods or services)
- which identifies you as
- the source of the product, and is
- distinctive enough to set it apart from a simple description of the product qualities.
- Where does trademark law come from and why is it so important?
The idea of protecting consumers from confusion or fraud in the use of brands and marks is very old. Trademarks came first from the common law, shaped by court decisions, rather than from legislation.
Then state and federal registration systems were created to track ownership. As a result, today’s US trademark law is very complicated, controlled by common-law court decisions as well as registration laws, at both state and national levels — simultaneously. Where there is a conflict, US federal law will control, to protect the reliability of the national system. This makes federal registration for marks advisable as well as desirable. Trademark law is important because right now, trademarks are being recognized in all legal systems around the world as the superior set of property rights in the commercial use of images and words. This is especially true for domain names: trademark owners will always take priority over domain name registrants.How do I know if I have a protectable trademark or a weak trademark?
Protectability is determined by a court or by the US Patent and Trademark Office by classifying a mark into one of the following categories of mark “strength”:
- coined marks
- arbitrary marks
- suggestive marks
- descriptive marks — describe qualities, characteristics or functions of the
product — WEAK
Example: “THE WRITER” for word processing software
— made-up designs and words — VERY STRONG
Examples: “XEROX” and “KODAK”
— everyday designs and words which do not describe a quality, characteristic or function of the product — STRONG
Examples: “APPLE” for computers and “APPLE” for a record label, “ARROW” for shirts
— do not directly describe, but suggest qualities of the product — SOMEWHAT STRONG
Examples: WHITE CLOUD” for toilet tissue and “AUTHOR” for typewriters
Trademarks which are coined, arbitrary or suggestive are eligible for registration. Trademarks which are descriptive are generally not capable of registration until “secondary meaning” has been proven. This means that the mark has been in use long enough that there are people who recognize the mark as the “second” meaning of the word, after the “primary” (dictionary) meaning in the language.
How do people know I am claiming a trademark?
In order to be able to enforce common-law rights, you must provide notice of the trademark by using the name with a notice symbol (“TM”)— and you must enforce your rights against others who use the mark on similar goods or services. If you don’t enforce your rights, you may lose the right to stop others from using the same mark. Common-law protection is usually enforced in state court, but may be enforced in federal courts. While the cost of common-law protection is minimal, the protection it gives is also minimal. Common-law protection is limited to the geographical area within which you can prove that your business is actually using the mark. And, if you go to court, you have to “prove more” to win a common-law case than where a registered mark is at stake: you have to prove in court that the other user actually had notice of the trademark. Where a mark is registered, registration serves as “constructive” notice and others are required to know whether they actually do or not.
What’s an “assumed name”?
This is also called a “fictitious name” or a “d/b/a” (doing business as) registration. All US states have laws which require this kind of registration before funds can be held or transferred under the name in a bank account. (This is also true of partnerships.) You register your name at the county level in most states; for a corporation or LLC, your assumed name is registered automatically at incorporation with the state. Although most counties and states will not register two identical or highly similar business names, others will, so you can’t rely on an assumed-name registration as proof that no one else in the county or the state is doing business under the name. Your date of first use is usually kept on file, and registrations must be periodically renewed.
Isn’t an assumed name the same as a trademark?
“Assumed name” registration does not give legal protection against use by others or guarantee that the use of a name does not infringe others’ rights. Because the right to use ultimately comes from being first in time, you should check existing registrations at the county level before selecting a company name, to determine if there are already other users. A bonus: if you sue to protect common-law trademark rights in a business name, an assumed name provides an independent verification of the earliest date of use.
When does state trademark registration make sense?
All US states have a trademark registration system. State registration eliminates the need to give notice to others who may begin using a similar mark or name after you. Protection extends to the state borders. An added advantage: state registrations are picked up by the computerized name-searching databases, so others searching for conflicts will know of your trademark use. Also, states usually allow the registration of business and trade names as trademarks, while the federal system does not. Although your state registration doesn’t “beat out” a prior user of the same mark under the common law, many states provide that a name or mark which is registered and not opposed for a period of time becomes “incontestable.” State trademark fees are typically very low.
I have a corporation and it has an assumed name. Doesn’t the state guarantee that no one else can use my corporate or assumed name?
Each state “certifies” its corporate names. If you are already a corporation for liability purposes, name certification is a bonus. Generally, you can keep other corporations from using your name by being the first to incorporate or qualify to do business as a foreign corporation (if your corporate home is in another state). Corporate name certification exists side-by-side with the state’s trademark registration system—neither system legally affects the other. States generally have policies against allowing more than one company to do corporate business under the same name, but there are no guarantees. A warning: corporate certification does not release you from liability for trademark or trade name infringement of another’s name. If a state certifies your corporate name and there is already a company which has been using the name and has trademark rights, you have no right to sue the other user, or the state for making you an infringer.
Do I need a federal trademark registration if I do business all over the US?
Federal registration provides the ultimate in protection—protection from others using the same name or mark on similar products or services, across the entire US. You can register slogans, colors, sounds and overall shape, as well as names and designs. You must be doing business across state lines to qualify, or intending to do so within 6 months. However, the federal system does not explicitly include business names, so they are usually not eligible for federal registration unless they are used on goods or services “in the manner of a mark.” Determining whether a use is “in the manner of a mark” is legally complex, and if it seems likely that you are using your name or mark as a trademark—rather than as a business name only—then federal registration is worth pursuing.
If you have an Internet presence, your domain name is probably one of your most important and strategic business assets. Because of changes to the trademark law regarding domain names (ACPA, the Anticybersquatting Consumer Protection Act) and because of the way the Uniform Dispute Resolution Policy (UDRP) for domain names is written, federal trademark registration is absolutely critical to support a domain name registration.
Why should I search to see if a name I am already using is being used by someone else?
Because someone already using a business name you wish to use has superior rights, and could make you immediately stop using at any minute. You should always investigate whether a name is available before adopting it and relying on it. The business attorney’s failure to counsel the client about name searching and availability as a critical legal step prior to incorporation or product roll-out, is the most common form of malpractice in business law today. The most comprehensive type of name availability investigation is ordered through a professional searching service, which covers the federal and state trademark registers, the Yellow Pages in most of the larger cities, and trade and industry journals and press releases. This type of search is absolutely essential where an Internet website, a national marketing campaign, or expensive investment in inventory marked with the product or company name are involved.
I can do an Internet search and look for trademarks myself, and it’s free. Isn’t an Internet search just as good as a professional trademark search?
Unfortunately no. Google, the best of the search engines available on the Internet , only indexes around a third of the web pages available at any one time. Further, many trademark owners still do not have a web presence and neither their company name, nor their trademarks, are listed. The Patent and Trademark Office’s official government website has a searchable list of registered and in-process trademarks. Unfortunately, this list is at least three months behind at any point in time. Most importantly, this official government website does not list abandoned applications. (In most cases where a federal application is abandoned, the user is still using the trademark—it’s just the formal process of applying for federal registration, which has been abandoned.)
The Internet is international—can’t I just forget about US trademark law if my main concern is my domain name?
Unfortunately no. Because the Internet is international, many courrts have held that an Internet site owner is not only subject to the laws of the country they are in — but also the laws of any country in which the site can be accessed. Here’s how domain names fit into the US trademark law. Domain names are given out by domain name registrars. When you register a domain name, you agree to the registrar’s contract. Each registrar’s contract specifies that the ICANN’s Uniform Dispute Resolution Policy (UDRP) will apply in the case of disputes. Under this policy, you are agreeing to arbitrate any domain name disputes in a WIPO arbitration forum. Because of the way these policies and laws were passed, these contracts and procedures almost always favor a prior US federal trademark owner. Because trademark law is more permissive than the UDRP (“DOMINO” for sugar and “DOMINO” for pizza are both OK because the companies sell different things), many large companies routinely find that their trademark has already been taken as a domain name. They will either bring an arbitration action, or a lawsuit under ACPA (Anti-Cybersquatting Consumer Protection Act), a law passed in 1999 to protect trademark owners against domain name holders who have no trademark rights. For this reason, it is absolutely imperative that you search for trademark uses of your domain name before selection, and then pursue a federal intent-to-use registration upon adoption, for maximum protection.
Copyright 1999 – 2007 Carol Ruth Shepherd.
If you have issues concerning trademarks and trademark ownership and you need to consult a trademark attorney, you can reach Carol at (734) 668-4646.