Can you afford NOT to own a trademark?

If you start using a trademark or a Domain Name - but there is someone out there with a similar trademark or service mark registration, they may sue and stop your use. Trademarks and service marks are frequently among the most valuable assets owned by a business. These intangible assets are a type of property included within the category commonly known as "intellectual property." Intellectual property also includes copyrights, patents, trade names, trade secrets, domain names and know-how. Every company owns intellectual property. If protected, intellectual property can build an identity and a brand for a company’s products and services. The first step is to identify the intellectual property assets that a company owns. The next step is to use trademarks and other legal means to protect them.

What’s a Brand worth?

Fortune magazine ran an article on the value of brands several years ago. The article quoted Coca-Cola’s late Chairman in their Annual Report saying, “if all our buildings were destroyed world-wide, we could borrow $100 Billion and rebuild everything on the strength of the Coke brand”.
How does that get us to trademarks? Simple, a brand is a trademark.

Start With a Trademark Search

With all respects to the Nike® mark, - Just DO It! Trademarks and service marks may be much more than words. They may be a color (such as pink for Owens Corning insulation), visual (such as stylized names or logos), slogans (such as the Nike “Just Do It”) and even aural (such as NBC's service mark consisting of the musical notes C, A and F).

If you file a trademark application and it is rejected because of an earlier trademark, you get no rights. It takes 6-8 months before your application is examined. There are several options available, from on-line, to full Federal, state and common law searches of anyone using a similar term. A good search could save money in the long run.

The law does not require searches, but you should seriously consider it. The U.S. recognizes common law trademark rights based upon use. If the client begins using its trademark and there is already someone using a similar trademark or service mark, the client risks being sued for trademark or service mark infringement. After filing an application, it takes 4-8 months before an Examiner reviews the application and provides a preliminary opinion on whether the application is acceptable to the Trademark Office. (Note, that even if the Examiner approves an application, it will later be “published” and any third party who believes they would be harmed by a registrations can object through an “opposition” proceeding.) In addition, by performing a search and receiving an opinion from a trademark attorney on its availability, you will be able to demonstrate to a court that you adopted the mark in good faith.

There are several search options available, from on-line, to Federal, state and common law searches of anyone using a similar term. If you can afford it, consider a full search of all of these.

    In deciding whether to conduct a search, there are 3 paths to follow:

    1)    No search - just file -- you are taking a risk no one else is using or has registered.

    2)    A law firm does an on-line, preliminary trademark search of Federal trademarks only. This can be done within 2-3 days.

    3)    A law firm buys a thorough, complete search from commercial companies (like Thomson & Thomson or CCH-Corsearch) that generate them from the databases of the U S Patent & Trademark Office, all 50 states, many databases of common law users and internet domain names. It takes 7-10 days to order and receive the search. The out of pocket costs for a word trademark search (logo searches are more labor intensive and cost more) are around $400 We study your search and bill you at our hourly rate.

Therefore, before making a significant investment in the selection, adoption and use of a mark, a company may be well served to order a full trade-mark search. In this way, the company will know whether the adoption and use of the mark will infringe on someone else’s rights.

Domain Names Too

You noticed that the full search option includes a search of domain names. Trademark searching used to be the last thing most companies considered when setting up a Web site. The stakes are too high and the law has developed in the U.S. so that there is a very clear overlap between domain names and trademark rights.

If you do not take the necessary legal steps before you register a domain name, you may be sued for infringing another's trademark and/or have them get a transfer of your domain name. All of your time, effort and investment in that domain name is wasted. It is our recommendation that you should always register your trademark as a domain name, and always register your domain name as a trademark. Anything less may leave you vulnerable to legal challenges.

Advantage of Federal Registration

Federal registration of a trademark or service mark provides the owner with additional, valuable substantive rights. A federal registration provides nationwide exclusive priority of use of the mark even in those areas in which the mark has not been used by the registrant. One exception to this rule is that the registration is subject to any rights acquired by others in a given location prior to the time of registration. Consequently, acquiring a federal registration can be useful strategy for a business which presently may not be selling its products or services in a particular location but has plans to do so in the future.

Acquiring a federal registration also has international benefits, as certain rights are afforded a United States regis-trant in a large number of countries throughout the world by virtue of the filing of an application for registration in the United States. Applications for federal registration in the United States also may be based in certain cases upon a prior foreign registration for the same mark.

A federal trademark application may be filed based upon either actual use or an intent to use. Under "intent to use", an application for registration may be filed if the applicant states that it has a bona fide intent to use the mark in commerce on the goods or services specified in the appli-cation. However, the applicant must begin actual use of the mark in commerce before the mark can actually be regis-tered.

The "intent to use" provision reduces the risk that a company's investment in packaging, advertising and marketing will be wasted because the mark it adopted turns out (1) not to have had market appeal; (2) not to have been protectable; or (3) arguably to have infringed another company's trademark or service mark. Even though a registration is not issued until the mark is actually used, the applicant obtains a priority over subsequent applicants for registration of the same or a similar mark based upon the date of filing of the intent to use applica-tion rather than the date of actual use.

Companies planning to use a mark that has not been registered should consider the additional protection afforded by the "intent to use" procedure to protect their marketing investment. The federal registration process under either case involves the filing of an application for registration ($335 filing fee) followed by a detailed examination by an Examining Attorney in the United States Patent and Trademark Office and, if approved, publication for possible opposition by any third party who wishes to object. Typically, the entire registration process, from filing to examination, to publication and ultimately printing the registration certificate takes between one year and fifteen months.

How Do You Register a Trademark?

The Lanham Act of 1946 is the federal law governing federal registration of trademarks, service marks, certification marks, and collective marks. The U.S. Patent and Trademark Office (PTO) administers the Act only as it relates to registration, and makes all preliminary decisions concerning the registrability of marks. (Only courts have the right to enjoin someone from actually using a mark in an infringement suit.)

A trademark application can be filed in the U.S. on the basis of : 1) commercial use in the U.S.; 2) bona fide intent to use the mark in the U.S.; 3) an application or registration in your "home" country if it has a treaty with the U.S.; or 4) under the Madrid Protocol.

The U.S. is a common law country so that federal registration is not a prerequisite to the acquisition of trademark or service mark rights, but there are many reasons to register. A federal registration gives the registrant priority of use of the mark across the country, even if it has not been used by the registrant in a specific location, and any subsequent use in that area by another company could constitute infringement.