Intellectual Property Primer Series Part 2: Trademarks

The Intellectual Property Series is back this week with Part 2, where I will cover trademark law.

Trademarks are symbols intended to identify a product, designate its maker, and distinguish it from other products. Trademark symbols include words, phrases, designs, images, and sounds. When a trademark denotes a service provider it is known as a service mark. When the packaging of a product or the design of the product itself, rather than a phrase or image, is intended to identify the maker and distinguish it from other products, it is known as trade dress; however, in recent years, the concept of trade dress has expanded to include the total image of a business’ establishment (such as a restaurant), the look and feel of its website, or its sales techniques, which has resulted in the area of trade dress law becoming unsettled. Other types of trademarks include collective marks, which are symbols that organizations’ members use to identify themselves and their goods and services as being part of that organization; and certification marks, which are symbols used by others to identify to consumers that the goods or services so labeled meet the standards of the organization that owns the certification mark.

In order to qualify as a trademark, a symbol must distinguish goods or services bearing the symbol from the goods or services of others. Consumers must identify the good or service as coming from a single source. The test used by courts to determine whether a symbol suffices as a trademark is whether the symbol creates a distinct commercial impression in consumers that identifies the source of goods or services. For example, “Chocolate-Chocolate Chip Pancakes” may not be distinctive enough to be a trademark (as the phrase can identify any pancakes made from chocolate batter with chocolate chips, regardless of the source), but “Samantha’s Chocolate-Chocolate Chip Pancakes” may likely be distinctive enough to serve as a trademark (since it is able to designate a singular source). It is important to note that trademarks must designate the source of the goods or services, not the actual goods or services themselves — for example, a clip of Reading Rainbow cannot serve as a trademark for the show, but the Reading Rainbow logo, or the show’s famous theme song, can serve as a trademark.

Many famous trademarks are arbitrary or fanciful words that can serve to easily distinguish the source of goods or services. For example, Nike was originally a Greek goddess, and therefore has little to do with the modern world, let alone athletic shoes. Similarly, “Apple” has little to do with computers or consumer electronics, and can therefore serve as a trademark in that industry. A company can use a nonsensical word, like “Blobbobadoopbop”, as a trademark.

A trademark must be distinguishing; therefore, descriptive elements of a symbol cannot be trademarked. In the pancakes example above, the “Chocolate-Chocolate Chip Pancakes” portion of “Samantha’s Chocolate-Chocolate Chip Pancakes” likely cannot be trademarked, as “Chocolate-Chocolate Chip Pancakes” is descriptive, and trademarking it would render other makers of chocolate-chocolate chip pancakes unable to describe their product to consumers — only “Samantha’s” can be trademarked. However, occasionally, a descriptive term can become some well known as a trademark that it ceases to function as a descriptor and instead becomes an identifier of the source of the good or service. As a compromise with descriptive terms, a company can use a “suggestive mark” — a lumber manufacturer might be able use “Paul Bunyan”, the folklore lumberjack, as a trademark to suggest that the product is lumber.

Sometimes symbols become eligible for trademarking only through acquired distinctiveness. A famous example of this process is Coca-Cola — the term originally merely described a cola drink made from the coca plant, but ultimately came to identify the source of a particular brand of cola. Other types of marks that become eligible through acquired distinctiveness include geographic marks (for example, Poland Spring), deceptively misdescriptive marks (for example, Turtle Wax car wax — consumers are not likely to think the wax is intended for turtles), and surnames (like the pancakes example above, or more famously companies like McDonald’s or Sears).

It goes without saying that in order to be eligible for a trademark, symbols must be distinctive enough in order to not likely cause any confusion with an existing mark; in addition, marks cannot concern a deceptive matter material to a consumer’s decision, cannot falsely suggest a connection with an entity or individual, cannot be geographically deceptively misdescriptive, or cannot be immoral/scandalous, disparaging, or a government symbol.

A trademark is established through bona fide, lawful use of the mark in commerce; use cannot be made merely to secure the trademark. The symbol must be used on the goods or goods’ packaging or containers, or with goods and services can be used on associated documents, displays, or advertising. However, use alone is not enough to acquire a trademark on symbols that are not inherently distinctive; they must first acquire distinctiveness before a trademark can be secured. Trademarks theoretically last indefinitely, although prolonged disuse of a mark may be evidence to show that the holder has abandoned the trademark; marks can also lose their distinctiveness when they become so generic they become a standard term for a good or service, like Xerox (for photocopying) or Kleenex (for facial tissues). Like copyrights, trademarks can be licensed and sold, but over-licensing of a trademark can cause it to lose its distinctiveness and render the mark unenforceable.

Like with copyright, trademark holders may elect to formally register their mark with the Patent and Trademark Office; registration offers many significant benefits, including: establishing constructive use of the mark nationwide; establishing prima facie evidence of the validity of the mark, which becomes incontrovertible after five years of continuous use; providing actual notice of the mark to those who perform trademark searches and establishes constructive notice by all infringers; and providing for statutory damages and legal fees in an infringement suit. If registration occurs before use, the trademark does not become valid until use. Moreover, descriptive marks that still need to acquire distinctiveness may be registered; however, the mark will not be enforceable until it acquires distinctiveness.

Infringement of a trademark occurs when the use of the second mark is likely to cause confusion or mistake, or deceive consumers — note that the mark does not have to actually do these things, just be so likely that a reasonable person would conclude there is a probability of confusion. Even a mark that is similar may be infringing. Factors in the infringement analysis include: strength of plaintiff’s mark, degree of similarity between marks, proximity of products in the marketplace, likelihood that priority trademark owner will enter the other’s market, the sophistication of consumers and their actual confusion, and defendant’s bona fide intent to establish its own mark.

Of course, it is possible for two companies to own the same or similar trademarks; in fact, it is possible for two companies to successfully register the same mark. If the mark owners are geographically separated, both of their uses may be upheld. It is also possible for two companies in different industries to use the same mark; the most famous case testing this principle is the long-standing dispute between Apple, Inc. (formerly Apple Computers, Inc.) and Apple Records, the Beatles’ record label — for years Apple Records attempted to restrain Apple’s use of the “Apple” trademark, until the companies ultimately agreed that Apple was entitled to use the mark as long as it didn’t enter the music industry (the controversy was briefly reignited when Apple introduced the iPod and iTunes!)

Trademark law should be a priority of start-up companies — coming up with the name and mark of the company is one of the first, most important things entrepreneurs will do, and coming up with a trademark that doesn’t qualify as a trademark or is already in use can be a major issue if the company has devoted time, money, and resources towards building up goodwill in the trademark.

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