Legal Guide

5 Things Business Owners Need to Know About Filing Trademarks

When starting a new business or growing an existing one, deciding on an image for that business is an important step. Part of this process involves choosing a name and a logo, and one or both of these will eventually become the business’s trademarks.

As a business owner, here are five things you should know about filing a trademark.

1. What Is a Trademark?

Legally speaking, a trademark is a mark that indicates the source of a particular good or service. The mark itself can be a word, a phrase, an image, or a combination of the three; as long as it distinguishes the goods or services from those of another company, it can be a trademark. As an indicator of source, trademarks are unique in that they also carry with them the goodwill of the company. A trademark is as much as an emblem of the quality your customers expect from you as it is a visual signifier.

2. Using Your Trademark Isn’t the Same as Registering It

Trademark protection in the United States is use-based. This means that as soon as you start using your trademark, you begin building your trademark rights. However, these rights are not the same as those you obtain from filing your trademark. Without registering your trademark with the United States Patent and Trademark Office (USPTO), you get protection only against infringement by nearby businesses. A company on the other side of the country where you don’t sell your goods could still use your mark.

If you register your trademark with the USPTO, however, you can take advantage of several additional benefits, including:

  • Nationwide protection against infringement;
  • International protection against infringement in some circumstances;
  • The ability to stop foreign business from importing counterfeit goods;
  • An official record of when you started using your trademark; and
  • The ability to pursue statutory damages for trademark infringement.

As your business grows, access to these protections only becomes more valuable, making filing a trademark a smart business decision.

3. The Importance of Trademark Clearance Searches

Once you have a trademark and you’ve started using it, you can register it with the USPTO. Before completing the application, however, you need to do a clearance search.

A clearance search is the most important step you should take before filing your trademark. If you’ve considered hiring a trademark lawyer, this is the first thing they will do for your trademark. Clearance searches look through state, federal, and international databases for trademarks similar to yours. Trademarks between two businesses cannot be confusingly similar, so if a trademark already exists that looks or even sounds like yours, you won’t be able to register your trademark.

Because registering a trademark can be expensive, knowing that there are similar trademarks will help you avoid unnecessary registration costs. A trademark clearance search allows you to make an informed decision about whether to continue with your application..

4. Some Trademarks Are Stronger Than Others

Logos, business names, and other would-be trademarks in the U.S. are ranked based on their uniqueness and placed into one of four categories. In order from least protected to most protected, trademarks are

  • Generic,
  • Descriptive,
  • Suggestive, or
  • Arbitrary or fanciful.

Generic trademarks simply state the kind of goods sold and cannot be registered. For example, a business that sells t-shirts could not register “T-SHIRT” as a trademark. If it did, then no other business selling t-shirts could use the word “t-shirt” in its name or logo. This kind of use goes against the purpose of trademarks.

Descriptive marks are similar to generic marks in that they are also closely related to the products they represent. However, a descriptive trademark is more unique because it describes the quality or use of the product instead of just what the product is. Descriptive marks qualify for protection, but only if they acquire “secondary meaning” and become associated with a particular company over a period of time. American Airlines is an example of a descriptive trademark.

Suggestive marks are the second strongest type of trademark. A mark is suggestive when there is a logical connection between the mark and the products but the connection is not immediately obvious. One famous example is Coppertone for tanning products. Using the products gives your skin a “copper tone,” but the word Coppertone does not immediately tell you that the products are for tanning.

Finally, arbitrary and fanciful marks are the strongest type of trademark. These marks are not related to the products they represent in any way. Arbitrary marks are existing words that don’t relate to the product, such as Apple for a computer company. Fanciful marks use words that don’t have any other meaning, such as Exxon for an oil company.

5. You Can Lose Trademark Protection

Compared to copyrights and patents, trademark filings require a lot more maintenance over the life of your business. However, your mark is protected indefinitely as long as you follow the proper procedures. After your trademark filing is approved, you will have to maintain that trademark by filing periodic statements of use with the USPTO. You need to file these statements every ten years or else you risk losing your federal trademark rights.

You can also lose your trademark through genericide or naked licensing. Genericide occurs when your trademark becomes so well-known that people start using it to refer to the type of goods you sell. For example, “Aspirin” was originally a registered trademark. However, it is no longer protected in the U.S. because of widespread use of the word “Aspirin” to mean painkiller.

While genericide occurs because of how a trademark is used, naked licensing occurs because of the kinds of products used with it. Many businesses license their trademark to other companies to increase their distribution. When doing so, however, the owner of the trademark must make sure that the products the distributor sells using the trademark meet the same quality control standards that the owner uses for its own products. If there is no quality control, there is a “naked license” that could dilute and end your federal trademark protections.

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