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Starting a new company or launching a new product or service always involves planning, hard work, and dedication. It should also involve the selection and development of trademarks and domain names as early as possible in order to build and protect the company’s intellectual property portfolio. For a new company, the company name should be cleared for trademark protection prior to incorporating or organizing the company. For a new product, the product (or service) name should be cleared for trademark protection as early as possible, but certainly prior to investing any money or other resources in producing marketing materials. In addition, it is important to register any domain names that relate to the name of the company or important product names.
As consumers, we all have at least passing knowledge of trademarks and domain names. Even if a trademark doesn’t include an appropriate notice such as the familiar ™ and ® (more about this later), we are conditioned by the marketplace to ask for products by name. The very idea of brand awareness is based on the concept of distinguishing the products and services offered by your company from those of your competitors in order to generate customer loyalty and to increase sales. In addition, domain names have become ubiquitous as a means of promoting a company’s image and selling its products and services over the Internet.
What is a trademark?
A trademark can be any word, name or symbol that serves as a source identifier of the related product or service. That is, the trademark connects the product or service with the company that supplies the product or service and the associated goodwill. Technically, products are associated with trademarks and services are associated with service marks, but for the purposes of this article, I will refer to both as trademarks. Note that it is not important that the consumer of a product know what the source of that product actually is, only that it can be distinguished from products from other sources.
A trademark can be a word, a marketing tagline, a word in a stylized script, a design such as a logo, a combination of a word and a design, a color, a sound or even a fragrance. Companies often seek protection of similar marks in more than one form, such as the variations registered to Intel Corporation for the wordmark "INTEL INSIDE", the design mark that includes the words "INTEL INSIDE" and the audio mark described as "a five tone audio progression of the notes D flat, D flat, G, D flat and A flat" (think of Intel’s television ads, and you’ll be humming the tune). The vast majority of trademarks are word marks since a word mark generally affords a company the broadest protection. In other words, the holder of a word mark can subsequently use that word mark with any font, any color, or any stylized representation.
How do I choose my trademarks, and why is it so important to seek clearance for my trademarks?
There are two main issues to consider when choosing a trademark. First, it is important to determine whether or not your company’s proposed mark is already in use by another entity in association with similar products or services. Trademark attorneys refer to this issue as the "likelihood of confusion" metric. The question is whether the relevant consumer of the product or service would be confused as to the source of the product or service. Although there are many examples of multiple companies using identical trademarks, the "likelihood of confusion" issue must be evaluated in light of the specific product or service. One example of identical marks associated with different products and services is "DELTA" for passenger air transportation services and "DELTA" for plumbing fixtures.
The second major issue relates to the distinctiveness of the proposed mark in relation to the associated product or service. Trademarks span a continuum from arbitrary to generic, with arbitrary marks being exceptionally strong marks and generic marks being unprotectable. In between arbitrary and generic are fanciful marks, suggestive marks, and descriptive marks. Generally, arbitrary and fanciful marks are those marks that bear no or little relationship to the actual product or service, and are entitled to a relatively broad scope of protection. Suggestive and descriptive marks suggest or describe some attribute of the associated product or service, and are generally entitled to protection only upon proof that the relevant consumers associate the mark with the associated product or service. Generic terms are simply words that describe the associated product by its common name and are therefore entitled to no trademark protection. Examples of the different types of marks include the arbitrary / fanciful mark "APPLE" for personal computers, the suggestive mark "BEST BUY" for retail store services, and the descriptive mark "AIRTRAN" for air transportation services. Note however that even arbitrary marks can become generic if the trademark’s owner neglects to ensure the proper use of its marks. Examples of once-valuable trademarks that are now considered generic include "ESCALATOR" for moving stairways and "ASPIRIN" for analgesic preparations.
Other issues to consider when choosing a trademark relate to certain types of trademarks that are generally not protectable. These include marks that consist of "immoral, deceptive or scandalous matter", flags or other insignias of the United States, any state or municipality, or foreign nation, the names of living individuals, mere surnames, or geographical identifiers associated with the region of origin of the product.
It is extremely important that a company obtain clearance for its proposed trademarks prior to use since innocent infringement of another entity’s trademarks is no excuse. In the event that it is determined that your company has infringed the trademarks of others, the penalties can include being forced to change your trademarks, having infringing goods seized and destroyed, being forced to account for lost profits, and monetary damages. Although we recommend that you have a trademark attorney perform a comprehensive trademark search prior to your use of a trademark, a simple Internet search is likely to uncover obvious problems during your trademark selection planning.
How do I protect my trademarks, and what is the scope of protection available?
Unlike other forms of intellectual property, trademark rights accrue under state law from the actual use of the trademark as a source identifier in association with the product or service. Such use-based rights are imputed to the first entity to use the trademark in a given geographic area. In order to bolster your rights in a trademark, each state allows for the registration of trademarks for a nominal fee. The state registration process involves the submission, and examination, of a trademark application, typically through that state’s Secretary of State’s Office. State registration requires that you prove your actual use of the mark at the time of registration.
The United States Patent and Trademark Office also allows for the federal registration of trademarks. In order to qualify for federal registration, the trademark must be used in interstate commerce. The federal registration process involves the submission of an application to the United States Patent and Trademark Office. The federal examination process is more involved, more time consuming, and more expensive than the various state examination processes. However, the protection granted to a trademark holder under federal law, and the remedies available for trademark infringement, are significantly broader than under state law. In addition, the federal registration process allows a company to file a trademark application based on an "intent-to-use" the trademark in commerce. This means that you can begin the registration process prior to your actual use of the trademark.
Note that the scope of trademark protection is geographic in nature. Therefore, a state registration in a given state will ordinarily be given no effect in the other states. One additional benefit of federal registration is that trademark protection extends nationwide even if your use is primarily regional in scope. In addition to state and federal registration, each country has a national system for trademark registration, so it is important to consider international trademark registration if your company plans to do business internationally.
What about ™, ® and ©?
We recommend the trademark owners use an appropriate notice in order to put others on notice that the company claims trademark rights in their marks. The ™ notice symbol may be used in conjunction with all trademarks prior to registration with the United States Patent and Trademark Office, as well as any trademarks that your company chooses not to register. The ® notice symbol may only be used in conjunction with a trademark that has obtained registration with the United States Patent and Trademark Office. Although you are not required to discard marketing and other materials that contain ™ rather than ®, we strongly recommend that you use the ® symbol whenever appropriate. The © notice symbol is used in conjunction with copyrights, but is noted here due to its similarity to the ® symbol.
What is the connection between trademarks and domain names?
Generally, the registration of a domain name by a company is unrelated to a company’s trademarks. The registration of a domain name does not constitute an intellectual property right or other legal right, but merely acts as an addressing scheme whereby a company’s website can be easily located. However, it is important to note that the owner of a registered trademark can often claim rights to a domain name registered by another entity if the domain name comprises the trademark owner’s trademark. This is usually accomplished through the use of the Uniform Domain-Name Dispute Resolution Process (UDRP) under the rules of the Internet Corporation for Assigned Names and Numbers (ICANN). Generally, such action requires that the trademark owner demonstrate that (i) the domain name is identical or confusingly similar to the trademark in question, (ii) the trademark owner has rights or legitimate interests in the domain name, and the domain name registrant does not, and (iii) the registrant registered or is using the domain name in bad faith. Many UDRP decisions have turned on whether the domain name registrant actually used the domain name in question, or offered to sell the domain name to the trademark owner for significant profit. An example of such a dispute settled under the UDRP resulted in Cisco Systems, Inc. obtaining the domain name "ciscosystems.net" from Geonill Cha of South Korea. However, recent developments under the UDRP suggest that the mere registration of a domain name that comprises a trademark owner’s trademark, without an offer for sale to the trademark owner, and without actual use, in and of itself demonstrates bad faith registration. The clearance of domain names, and the early registration of domain names that are important to a company’s success, continue to be important considerations.