I. Trademarks, Corporate Names and Trade Names Are Different
A. Basic Differences
With many businesses, names are the most valuable asset. Names are promoted with much effort and expense. In fact, company pride and viability may hinge on the fame, strength and value of its names. Yet, often the benefits of available legal protections are not enjoyed and there are no clear company directives as to how to best select, use and protect names. The proper selection, use and protection of names begins with understanding the differences between Corporate Names, Trade Names and Trademarks.
The same name may, but most likely will not, be used as a Trademark, Service Mark and/or Trade Name. Each of these uses has separate meanings, rights and registration requirements. For example, the Corporate Name (or legal name) of one company is Edo Japan, Inc. Yet, when the company does business it generally uses the shorter Edo Japan1 on its letterhead and invoices. This use is considered a Trade Name. The same shortened name is also used on its package labels as a brand name for the sale of its sauces and pre-prepared foods. This use is considered a Trademark. When the company uses the name on its signage to designate the name of its restaurant or in advertising to promote its franchise system, the use is considered a Service Mark. A slogan used in advertising to promote the restaurants or franchise system can also be a Service Mark. There are also other types of protection. For example, the look of the company's restaurants and the unique packaging of its goods are protected as Trade Dress, (and the nonfunctional designs can also be subject to Trademark or Service Mark protection). The actual text of the company's operating manual is the subject of Copyright protection. The recipes for its unique food dishes are the subject of Trade Secret protection.
Each of these categories is a separate type of use and registration and protection is different for each, i.e., you cannot obtain a Trademark or Service Mark on the name Edo Japan, Inc. if it is only used as the Corporate Name, you cannot obtain a Trademark on Edo Japan., unless it is actually used with the private label sale of its products, and you cannot obtain a Service Mark on Edo Japan. unless it is actually used with the sale of services. The mere registration with a state of a Corporate Name or Trade Name does not of itself confer Trademark or Service Mark ownership or even necessarily the exclusive right of use in that state. A name must be used as a Trademark or Service Mark to enjoy Trademark or Service Mark protection.
In this case, Edo Japan. is a franchisor; it enjoys protection of each of the above and vigorously enforces its various rights to its Corporate Names, Trade Names, Trademarks, Service Marks, Trade Dress, Trade Secrets and Copyrights. Let us now compare Trademarks, Corporate Names and Trade Names.
B. Trademarks, Service Marks and Trade Dress - defined.
A Trademark is any word, phrase, symbol, logo, group of letters or numbers, package design, product shape, color, sound or aroma, or combination of these, that identifies one's goods or services and distinguishes them from the goods or services of another. The primary purpose of Trademark laws and protections is to prevent consumers from being confused about the source or origin of a product or service. "Trademarks" is actually a general term referring to the following categories of Marks:
C. Corporate Names - defined.
A Corporate Name is the term we use for the legal name of an entity, be it a corporation name, limited partnership name, partnership name or limited liability company name. Most states (there is no federal Corporate Name registration in the U.S.) permit the registration of a Corporate Name in that state if it is merely distinguishable from the names of other entities, even if the name is confusingly similar to another. Registration generally only authorizes one to use that exact Corporate Name in that state and does not necessarily grant ownership or ensure protection from infringement by another. The standards for registering a Corporate Name are different from the standards as to what constitutes ownership or what constitutes infringement of a Trade Name or Service Mark. One may have authority from the state to use a Corporate Name but still may not own the name and still may be sued as an infringer. Therefore, we recommend a Corporate Name search be conducted before registering a Corporate Name. These searches conducted by our office are described below.
D. Trade Names (also known as assumed business names or dba's) - defined.
A Trade Name is any name used in the course of business that differs in any respect from the full legal Corporate Name. This is usually the name a business (including a sole proprietorship) uses on its letterhead or invoices. Registration of the Trade Name is accomplished in each applicable state (there is no federal registration in the U.S.) but this does not confer ownership and does not necessarily provide protection from the use of the name by others. In fact, some states may permit registration of the same or similar Trade Name by different people. Therefore, we recommend a Trade Name search be conducted. These searches conducted by our office are described below.
Registration of a Trade Name is imperative, since most states forbid a company from bringing suit, unless the Trade Name is registered. A registration only permits a company to do business in the state under that name and does not necessarily grant ownership or infringement protection. The standards for registering a Trade Name are different from the standards as to what constitutes ownership or infringement of a Trade Name or Service Mark. A company may have filed its Trade Name but still may not own the name and still may be sued as an infringer.
The state of Washington uses the following example to help a company know what Trade Names need to be registered:
Registration of Trade Names
Registered Corporate Name
Do Not Need to Register as Trade Name
Need to Register as Trade Name if Used
Ginger's Sweets Emporium, Inc.
Ginger's Sweets Emporium, Inc.
Ginger's Sweets Emporium
Ginger's Sweets
Ginger's Emporium
Ginger's
Sweet Emporium
GSE
E. Trademarks, Patents and Copyrights are Different.
While Trademarks, Patents and Copyrights each involve intangible property rights, each differ significantly from the other.
Note: Trade Secret Laws protect unpatented inventions and know-how that have been kept secret against unauthorized use or disclosure, i.e., the formula for a soft drink is best kept as a Trade Secret, since disclosure is required for most Patents.
Comparison
Trademarks
Copyrights
Patents
Nature
Words, phrases, designs, symbols, logos, groups of letters or numbers, package designs, product shapes, colors, sounds or aromas or combinations of these that identify one's goods or services
Original literary and artistic expressions, i.e., books, paintings, music, records, plays, movies, and software
New and useful inventions and configurations of useful articles
Protection
Likelihood of confusion
Copying
Making, using or selling the invention or design
Rights
Use
Create work and fix it in intangible form
Apply for Patent
Basis
Use or intent to use
Originality
Novelty, unobviousness, utility
Notice
Optional TM or SM if unregistered or state registration; . if federal registration
Optional after March 1, 1989; (c) with year of first publication and name of owner if used (use of copyright notice recommended by us)
Optional Patent Pending after application; Patent plus number after grant
Term
As long as used; federal registration must be continued in 6th year and renewed every 10 years. State terms differ, usually 5 to 10 years.
Creations after January 1, 1978, author's life plus 50 years, or if anonymous or work for hire, then earlier of 75 years from publication or 100 years from creation
17 years for utility Patents subject to maintenance fees and 14 years for design Patents
II. How to Select a Strong Name
A. The Relative Strength of Marks
When selecting a Trademark, one should not only be concerned with infringement but also be aware that unique words or logos are easier to enforce than words that simply describe one's products or services. The five types of Marks and the relative protection of each are listed below. Note that generic terms cannot be registered.
1.
Generic or Deceptive
2. Descriptive or Laudatory
3. Suggestive
4. Arbitrary
5.
Unique
Protection
Not protectable
Narrow - no protection until it acquires distinction or secondary meaning in the marketplace
Immediate Protection
More Protection
Broadest Protection
Examples
Generic
lawn mower, razor, candy
Descriptive
Seattle Plumbing,
Japanese Cuisine, Fast Copy
Caterpillar for tractors, Coppertone for tanning lotion, Whirlpool for washers
Apples for Computers
Kodak for cameras, Exxon for petroleum products
Deceptive
French for wine from Washington
Laudatory
Blue Ribbon for beer, Gold Medal for flour
Surnames
Gallo for wines
Definition
Generic word for a type of goods or services can never be a Trademark, since the generic word only describes the goods or services and not the source or origin.
Describes the goods or services or a characteristic of them and thus can not be a Trademark until the mark becomes known as a source in the marketplace.
Words that suggest some attribute of or benefit of the goods, but do not immediately describe the goods can be Trademarks.
Existing words that have no relation to the goods or services.
Words made up that have no built-in meaning.
Finding the right name can be difficult. Our firm has relationships with specialized companies that help select names, logos, and looks. Some of these services can be very expensive. Many names have been used but a creative company can often find the right name by studying synonyms, colloquial terms, slang, or new words (neologisms). A name should be unique, attract the eye, be pleasing to the ear, be easy to remember, be short, convey something tangible about the company, product or service, and elicit desirable consumer responses.
If a Mark is to be used in international markets, one should be sure the Mark does not translate into an inappropriate or undesirable term in another language. For example, Chevrolet introduced the NOVA in South America not thinking "No va" in Spanish means "does not go" or "does not work." Our firm has a great deal of experience and can help you find the right name.
B. Trademarks, Service Marks and Logos Searches
Due diligence in selecting and clearing a name or logo prior to actual use can significantly reduce the risk of infringement, damage claims, and wasted time and marketing expenses. A Trademark search should be conducted to provide needed information to make a decision on whether to proceed with use. A search, however, is not a guaranty that no one is using a similar Mark. The question of whether two Trademarks are confusingly similar is not a black and white scientific formula but the weighing of risks by one and their experienced Trademark professionals. Still the search, and a letter from legal counsel, can also constitute a good faith defense of due diligence and can often preclude a claim for damages by proving one was a good faith or innocent infringer.
Before investing in and using a Mark, one should obtain a Trademark search and have such interpreted by a professional.
C. Corporate Names Searches
Our firm conducts Corporate Name (entity name) searches with the appropriate Secretary of State or Department of Licensing. Our firm searches the approximately 45 state's records available on-line for preliminary searches or uses an outside company for complete searches. If the name will be in the public eye, we recommend a Trademark search also be conducted, since many names may be registered as Service Marks but not as Trade Names or Corporate Names. Corporate Names may also be reserved prior to incorporation, qualification or use in a state for a limited time (usually up to six months).
D. Trade Names Searches
If a name will only be used on a local basis within the state, our firm searches the state's Trade Name filings, the state's Trademark filings, the area's local telephone directories and other local resources. If the name will be used in other states, Trade Name searches can also be accomplished for most states. We recommend a Trademark search also be conducted.
E. Expanded Research
Our firm can conduct, in-house or via specialized companies further investigation into companies, their products, etc., in the case of actual or potential name conflicts. These investigations vary in cost.
III. Steps to Register and Enforce a Mark
Failure by a Trademark owner to take reasonable steps to protect a Trademark against infringers can dilute the strength of the Mark and lead to abandonment of the Mark. Registration is not a panacea but is an important protection, benefit and notice to others.
Our firm files literally hundreds and hundreds of Trademark applications at both the state and federal levels, as well as numerous foreign Marks through our network of Trademark experts throughout the world.
1. Federal Registration
A federal Trademark or Service Mark can be filed on either an "Intent to Use" or "Actual Use" basis. If one has not yet used the Mark, filing on an "Intent to Use" basis can be advantageous, since one later files a statement of use upon actual use yet the original filing date is kept intact. One could, by filing for extensions, wait for more than two years before actually having to use the Mark.
To effectuate an Intent to Use filing, we need the following:
If the filing is based on Actual Use, then we will also need:
The process is lengthy:
If there are no Office Action items then it takes approximately 9 months to obtain registration. Registration is now averaging about 15 months, so start the process as early as possible.
2. State Registration
The items needed are the same, except there is no need for interstate use. State registrations are a simple process taking 2-4 weeks and are much less expensive.
3. Foreign Registrations
Similar information is required except that you will usually need to appoint an agent and sign a power of attorney authorizing the agent to do the filings for each country.
IV. How to Obtain Rights to Trademarks
A. Obtaining Rights
1. Common Law Ownership
Trademark rights in the United States are obtained through actual use of a Mark in connection with the offering of goods or services. This is called common law protection, since protection arises from court rulings and not from statutory authority. The first person to adopt a Mark has a common law right to prevent others from using a similar Mark in a manner that is likely to confuse consumers, regardless of registration. However, common law protection may be confined to the established market and others may register a Mark for use outside that market. Necessary protections are obtained through state, federal and foreign Trademark registration, including domain name registrations.
2. State Trademark Registration
If a Mark is used only intrastate, that is, within only one state, then state Trademark registration is appropriate as opposed to federal registration that requires interstate use or use between a foreign country and a state. State Trademark registration provides constructive notice to all that the Mark is being used throughout the state and provides other protections, such as attorneys' fees, state anti-dilution protection, etc. Some states will now permit registration based on an intent to use the Mark. State Trademark registration is much faster and less expensive than federal registration.
3. Federal Trademark Registration
If a Mark is used interstate (in more than one state), or between the United States and a foreign country then federal registration is appropriate. It is also possible to apply for federal registration before actual use, based on a bona fide intent to use the Mark.
B. Benefits of Registration
Note: The laws of each state differ as to the scope of protection provided to Trademark registrants. States may provide protection not available through just federal registration so some Trademark owners file with both the states and the U.S. Trademark Office.
C. Foreign Trademarks
One important note is that while the United States is a member of several treaties, the laws of different countries vary dramatically. While in the United States one obtains rights to a Trademark by use, in some foreign countries ownership is obtained by the first to file. This has proven most difficult for many United States companies that start in the United States and then proceed to registration in foreign countries and find their Marks are already registered by opportunists.
D. U.S. Customs Registration
We can also work with companies to file Trademarks with United States Customs to help curtail gray market goods. This is a valuable process to help stop look-a-likes.
V. How to Use Names Properly to Maintain Rights in Trademarks
Proper usage may be the most important means of protecting a name. One example is the continuing struggle of XEROX to keep its name as a Service Mark and not as a generic term for a copy. If generic, there is no protection. Examples of Marks becoming generic are "escalator" and "shredded wheat."
There are a number of guidelines to protect a Mark. Here are some guidelines presented by Thomson & Thomson, a Trademark search company.
A company should consider developing a corporate identity handbook with guidelines on usage, including actual approved samples. Our firm can assist to develop such a handbook.
Footnotes: