Trademarks are often one of a business’s most valuable assets and a strong trademark can be a key to the success of the business. We each encounter thousands of brands every day attached to all kinds of different goods and services. So how do you go about building a strong brand you can grow and protect for years to come? In this article, we’ll review what trademarks are and what they protect, the legal framework for trademark rights in the United States, and the process of applying for, obtaining, and maintaining a federal trademark registration.
What Are Trademarks and Why Are They Important?
Trademarks are words, symbols, phrases or designs (sometimes even colors and sounds) that identify a product or service as originating from a single source. Trademark owners have the exclusive right (within certain limits) to use a trademark in connection with the products or services covered by the mark. The ability to keep other people and businesses from using the same or confusingly similar marks assures trademark owners that only they receive the benefits of investing the time and resources to create a brand - like recognition, loyalty, goodwill, and marketing efficiencies.
Trademarks also serve a second dual purpose of allowing consumers to distinguish one business’s products and services from those of its competitors. While a consumer might not know the identity of the source, they can rely on that mark for goods or services that they expect a consistent level of quality from. When consumers purchase a product from Apple or Nike, they have a very good idea of the quality they can expect from those products.
The Legal Framework of Trademark Protection in the U.S.
In the United States, trademark rights exist at 3 levels: federal, state, and common law. At the federal level, trademarks are protected primarily under the Lanham Act. The US Patent and Trademark Office (USPTO) is the federal agency that administers the Lanham Act and regulates registration of trademarks on the federal trademark register. At the state level, trademarks are protected by common law principles of unfair competition and, in some states, by statute. Rights in unregistered trademarks, known as common law rights, are typically quite limited in scope and usually extend only to the close geographic area where the mark is being used.
In many countries, trademark rights are granted to the first person or company to file a trademark application for a particular mark, regardless of whether it is currently being used. In the U.S., however, trademark rights are granted to the first person or company to actually start using the trademark in commerce in connection with a product or service.
While a federal application can be filed in the U.S. based on a legitimate intent to begin using a mark in the near future, a federal trademark registration is not granted, and no rights attach to the mark until the applicant begins using it in connection with the products or services specified in the application.
The Scope of Trademark Protection
In general, trademark protection extends to the scope of use, which is defined both geographically and by the goods or services used in connection with the mark.
1. Geographic Scope:
Unlike common law rights, which are limited to the immediate geographic region where the mark is being used, a trademark registered on the federal register gives the owner the exclusive right to use the mark nationwide.If you expect to use your trademark(s) outside the U.S., you should consider conducting trademark clearance searches and registering the mark(s) in the foreign jurisdictions where you will be using them. Deciding where and how to register marks internationally can be a very complex undertaking and you should always consult with a qualified trademark attorney to learn about the process, costs involved, and strategies.
2. Classification of Goods and Services
Generally, trademarks protect and can be registered for the specific goods and services they are being used in connection with. There are 45 different “classes” of goods and services that are recognized by the USPTO and trademark owners register their marks in the classes that correspond to the products or services they offer.
3. Likelihood of Confusion
The “likelihood of confusion” standard for trademark infringement allows trademark owners to prevent others from using a similar mark on goods or services that are similar or related, but not necessarily identical, to those of the trademark owner. For instance, if you have a federal registration for “Discount Den” in connection with “auto repair services,” you may have a strong argument for preventing someone else from later registering “Savings Den” in connection with a business that does car washing and detailing.
Requirements for Federal Trademark Registration
1. Use in Commerce
As previously discussed, trademark rights in the U.S. are obtained by being first to use the mark in commerce in connection with the relevant goods or services. Under the Lanham Act, “use in commerce” means actually using the mark in the ordinary course of trade. This could include, among other things, selling goods with the mark displayed on the product packaging or on a tag/label, on documents associated with the goods, or using it in advertising or sales materials for the goods and services being offered.
To be protectable as a trademark, a word, logo, design or phrase must be distinctive, which means it must be capable of identifying a product or service as originating from a single source. Marks can be evaluated and grouped based on a continuum that goes from highly distinctive to generic. The five general categories along this continuum are: (i) Fanciful; (ii) Arbitrary; (iii) Suggestive; (iv) Descriptive; and (v) Generic. Let’s take a look at each of these in turn.
a. Fanciful Marks
Fanciful marks are terms that are created specifically to function as trademarks and have no other common dictionary meaning. Examples include “Kodak” for cameras and photographic products and “Exxon” for oil and gas.
Fanciful marks are considered to be the strongest marks and provide the broadest trademark protection because the product or service is the only meaning associated with the mark and it is generally easier to prove infringement by other users.
b. Arbitrary Marks
Arbitrary marks are words that do have common meanings, but do not have any connection to the goods or services they are being used with. Examples of arbitrary marks include “Apple” for computers and “Omega” for watches.
c. Suggestive Marks
Suggestive marks suggest a quality or characteristic of a good or service but do not explicitly describe it. There has to be some thought or logical jump of imagination required between the mark and the connected goods or services for a mark to be considered suggestive and not descriptive. Thought, imagination, and perception are required to connect the mark with the product or service. Examples of suggestive marks include “Mustang” for cars and “Coppertone” for sunblock.
d. Descriptive Marks
A mark is descriptive if it describes a good or service or one or more of its features, such as its ingredients, quality, purpose, or function. Descriptive terms are not inherently distinctive and are not initially entitled to trademark protection because they do not immediately identify the source of a single product or service. However, over time a descriptive mark can acquire distinctiveness as it comes to be associated in consumers’ minds with a certain source of goods or services. In these cases, the mark is said to acquire secondary meaning and can be protected as a trademark.
Examples of descriptive terms that have acquired secondary meaning include “Best Buy” for a store selling electronics, and “International Business Machines” (IBM) for computers.
Descriptive marks cannot be registered on the Principal Register without a showing of secondary meaning. However, descriptive terms that are capable of distinguishing the goods and services may be registered on the Supplemental Register.Determining whether a term is descriptive or suggestive is not an exact science and often involves subjectivity. Oftentimes, different arguments can be made for either suggestive or descriptive with regard to a particular mark. Generally, a term is considered suggestive if it requires some thought or imagination to reach a conclusion about the nature of the goods or services offered. On the other hand, a term is generally considered descriptive if it immediately conveys information about the nature of the goods or services.
e. Generic Terms
A generic term is the common or dictionary term for a product or service. Generic terms can never function as a trademark because they do not identify a particular source. For instance, “Auto Repair Shop” and “Grocery Store” can never act as trademarks. A term's distinctiveness needs to be evaluated in the context of the goods and services for which it is used. For example, while APPLE is arbitrary for computers, it is generic for the fruit.
3. No Likelihood of Confusion
The standard for whether trademark infringement exists is “likelihood of confusion.” A likelihood of confusion exists between 2 marks with unrelated owners if consumers are likely to believe that the products or services come from the same source. The main factors to consider when determining whether there is a likelihood of confusion are: the similarity of the marks; the channels of trade being used; the relative strength of the marks; the similarity between the goods and services being offered; the intent of the user; and the sophistication of the consumers being targeted by the mark owners.
It is important to note that a finding of likelihood of confusion does not require the conflicting marks, or the goods and services on which they are used, to be identical. Likelihood of confusion generally will be found if the marks are similar and the goods or services are related.
4. Eligibility for Trademark Registration Under the Lanham Act
Not all words, symbols, logos, and devices can be registered as trademarks. Certain types of subject matter can’t be registered at all. Other categories of materials may be registered, but only if they meet certain criteria. This second group of categories includes, among others, names, government insignia, descriptive terms, and terms that are primarily geographically descriptive.
The Federal Trademark Registration Process
Assuming the application proceeds to registration, obtaining a federal trademark registration usually takes between one and two years from filing the application. However, timing depends on several factors, including the extent to which the USPTO or third parties object to registration of the mark and the size of the backlog of pending applications.The full process generally consists of: 1) Conducting a search and clearing the trademark for use and registration; 2) Preparing and filing the application; and 3) Responding to and addressing issues raised during the application review process.
Benefits of Registration
It is not necessary to register a trademark on the federal trademark register. Federal registration, however, provides the trademark owner with substantial benefits and more expansive rights than those available for unregistered or state-level marks.
1. Principal Register
The advantages of registration on the Principal Register include:
- Constructive nationwide right to use the mark;
- Federal court subject matter jurisdiction over infringement and other trademark claims;
- Statutory remedies for federal trademark infringement claims, including, under certain circumstances: treble damages;
- recovery of attorneys' fees and costs; Constructive notice of ownership, which eliminates the defenses of good faith use and innocent adoption;
- The right to use the ® symbol and other notices of federal registration;
- After five years the registration may become incontestable and be deemed conclusive evidence of the owner's exclusive rights to use the mark;
- a registration may be recorded with US Customs to stop the importation of infringing, counterfeit, and gray market goods; and
- A registration may provide a basis for registering the mark in foreign countries.
2. Supplemental Register
Some terms that do not qualify for registration on the Principal Register may be eligible for registration on the Supplemental Register. To be included on the Supplemental Register, a mark must be: Capable of distinguishing the applicant's goods or services; Unregistrable on the Principal Register; and not otherwise unregistrable.
Registration on the Supplemental Register is most common for marks that are merely descriptive where the applicant hasn’t been able to demonstrate secondary meaning. Benefits of registration on the Supplemental Register include:
- Federal court subject matter jurisdiction over infringement and related unfair competition claims;
- Registration may be cited by trademark examiners against later applications to register similar marks;
- Inclusion in trademark search results, which may deter third parties from adopting similar marks; and
- the right to use ® and other notices of federal registration.
Intent to Use Applications
The Lanham Act permits the filing of an intent to use trademark application for a mark that is not yet being used if the applicant has a legitimate intent to use it for the goods or services listed in the application. The benefits of filing intent to use applications include: If the mark becomes registered, the filing date of the application is deemed to be the date of first use, providing a priority date that is earlier than the first actual use; and the owner can determine whether the mark is registrable and address any obstacles to registration before making substantial investments in the mark.
Before applying for federal trademark registration or using the mark, the brand owner should go through the trademark clearance and search process. This involves conducting one or more trademark searches to see whether the proposed mark is likely to infringe on any existing rights, analyzing the search results, and getting an opinion on whether the proposed mark qualifies for trademark protection and federal registration and whether there are any risks presented by existing or proposed uses of the mark.
Performing trademark clearance in the initial phases of adopting a new mark allows a trademark owner to avoid or reduce the investment in a trademark that is unavailable for use or registration. It also helps reduce the risk of third-party objections to use and registration of the proposed mark. Lastly, it can help uncover potential issues and risks and allow the application to be drafting in the best way possible to address those issues.While a well-structured trademark search should identify the most significant risks of using a mark, trademark owners should understand that no search or clearance process can identify all possible issues. An analysis of eligibility and availability for use and registration requires knowledge of trademark law and is typically performed by an experienced trademark attorney.
Although the scope can vary, trademark searches generally include a search of: The federal trademark register administered by the USPTO; State trademark registers; various other publicly available publications and databases relating to relevant products and services; and the internet.
A trademark search is usually performed in two stages: a preliminary (or “knock-out”) search, followed by a comprehensive (full) search, if necessary or desirable.
1. Knock-Out Search
The purpose of a knockout search is to identify marks that are visually, conceptually, and phonetically similar to the proposed mark and that are being used with the same or similar goods or services. While the scope of knockout searches is usually limited, they can help a brand owner avoid the expense of a full search if a clearly conflicting trademark is uncovered and allow the brand owner to choose from a selection of alternative trademarks, especially if there are budget concerns.
The scope of a knockout search is usually limited to information that is free and easy to access online, including online searches of the USPTO database of federal registrations and applications using the USPTO's Trademark Electronic Search System (TESS), basic internet searches for direct hits, and WHOIS domain name registry searches for specific domain names. Brand owners, particularly those planning to rely on social media for advertising, will also benefit from checking to see whether names/handles are available on those platforms (Instagram, Facebook, Twitter, YouTube, etc.).
2. Full Search
Full searches can sometimes be necessary to conduct a more thorough risk assessment of existing registrations, pending applications, and common law uses of similar marks. They involve a more thorough search of federal applications and registrations and cover a wide range of additional publicly available information, including databases of state trademark registrations maintained by state trademark offices and common law uses, including searches of the internet, business/trade name directories, databases of periodicals, domain name registries, and dictionaries.
If the business expects to use the mark internationally, a full search may also include registries and common law uses in selected foreign jurisdictions. Some law firms that specialize in trademark law have in-house search capabilities, and several third-party vendors also offer trademark searching services. However, most third-party vendors do not provide an analysis of the search results or an opinion on the risks associated with using and registering a proposed mark.
3. Analyzing Search Results and Opinion
A trademark attorney typically requires one to two weeks to conduct a full search and provide a use and registration opinion, though expedited searches can be obtained for a higher fee. International searches typically take longer and should be analyzed by local counsel for the relevant jurisdictions.
Understanding the Application Process
1. "Use in Commerce" Applications
A “use-based” application is based on existing use of the mark. The claimed use must be a legitimate use in the ordinary course of trade and not for the sole purpose of reserving trademark rights.
2. "Intent to Use" Applications
An “intent to use” (ITU) application is based on a legitimate intent to use the mark in connection with the goods or services listed in the application even though actual use has not yet taken place.
The USPTO examines and publishes ITU applications in the same manner as use-based applications. However, a registration for an ITU application will not be issues until the applicant files an Amendment to Allege Use or Statement of Use along with appropriate evidence showing that the mark is now actually being used in commerce.
1. Applicant Information and Drawing
A federal trademark application must include the applicant’s name and address, legal entity or citizenship, name and address for correspondence (Either you or your attorney, if you are using one), and a clear drawing or depiction of the mark. If the trademark is not used or intended to be used in a particular format the applicant can use a standard character (block letter) format. The applicant should use a special form drawing if the trademark includes a particular style, lettering, color, or design.
2. Description and Classification of the Goods or Services
The USPTO classifies goods and services into 45 different categories (with several sub-categories within each larger category). The trademark application must include a description of the goods or services with which the mark is used or, for an ITU application, will be used. This must be specific and use common, concise, and detailed terms. For example, "clothing" is unacceptably broad. Instead, the application should list specific items of clothing, like "t-shirts, pants, and skirts."
Getting the description of the goods and services right on the first try is important because the USPTO rules allow an applicant to clarify and limit, but not expand or broaden, the goods or services listed in an application. So, while "shirts," for example, may be limited to "t-shirts and blouses," it cannot be broadened to include "pants." If you leave out an important category, you’ll be forced to file a completely new application with additional fees and you’ll lose your priority filing date from the first application.
3. Filing Fees
Filing fees are based on the number of classes covered in the application and must be paid when the application is filed. When filed online, the fee is typically either $225.00 or $275.00 per class.
4. Additional Use in Commerce Application Requirements
A use-based application must also include:
a. Date of first use anywhere.
This is the date of the applicant's first use of the mark anywhere on or in connection with the specified goods or services.
b. Date of first use in commerce.
This is the applicant's first use of the mark in commerce that Congress can lawfully regulate (for example, interstate commerce or commerce between the US and another country) as a trademark or service mark on or in connection with the goods or services.
c. Specimen of use.
For each class of goods or services, the applicant must submit a specimen (generally a photograph or screenshot) showing the mark as actually used in connection with those goods or services.
Post-Application Considerations and Procedure
1. USPTO Examination
After the application is filed, it is assigned to a trademark examining attorney at the USPTO who will review the application to determine whether: 1) The application meets formal examination requirements; 2) The trademark is distinctive and eligible for registration in accordance with the Lanham Act and the USPTO's regulations; or 3) The trademark is likely to cause confusion with any other previously applied for or registered trademark.
2. Office Actions
An initial response from the USPTO examining attorney usually takes three to four months (sometimes longer). If the application meets all formal requirements and the examining attorney has no further objections, the examining attorney issues a “Notice of Publication,” which is followed by publication of the mark in the USPTO’s Official Gazette.
Many times, the first response from the USPTO is a letter (known as an “Office Action”) from the examining attorney setting out objections to the application. Office Actions can include objections based on defects in the formal application (for example, the description of goods or services is overly broad or vague); Ineligibility for registration; Descriptiveness; or what the examining attorney believes is a likelihood of confusion with a previously registered or applied for mark. When an Office action is issued, the applicant has 6 months to either amend the application to correct any errors, or present arguments and evidence in an attempt to overcome the examining attorney’s refusal.
If an applicant is not able to overcome the initial refusal by the examining attorney, he or she may appeal a final refusal by filing a request for reconsideration by the examining attorney or an appeal with the Trademark Trial and Appeal Board.
If an application passes through the examining attorney's review without being rejected or abandoned, the USPTO publishes the mark in its Official Gazette, published weekly and available online or in hard copy. Once published, any party that believes it will be harmed by the registration of the pending trademark has 30 days to file an opposition.
5. Opposition Proceedings
An opposition is a proceeding in which an interested party seeks to prevent registration of another party's mark. Most oppositions are filed by an owner of a prior mark claiming the applied for mark is likely to cause confusion with the prior mark. If an opposition is filed, the applicant has 30 days to file an answer or the application will be deemed abandoned. The opposition procedure is similar to litigation in civil court, but is heard before the Trademark Trial and Appeal Board, which has specific rules governing the conduct of an opposition.
6. Registration of Use-Based Application
If no opposition is filed against a use-based application for a mark on the Principal Register, the USPTO registers the mark and issues a Certificate of Registration.
7. Registration of Intent to Use Application
The USPTO will not register a mark applied for on an ITU basis until the applicant files a Statement of Use and an acceptable specimen showing use of the mark in the claimed class of goods or services with the USPTO. Therefore, if no opposition is filed against an ITU application, the USPTO issues a Notice of Allowance. The applicant then has six months to file a Statement of Use with an acceptable specimen and pay the required fee. An applicant can receive up to five 6-month extensions (for a total of up to 3 years) to file a Statement of Use (including an acceptable specimen of use for the claimed class of goods or services).
8. Maintaining Trademark Registrations
Once a trademark is registered with the USPTO, the trademark owner must take affirmative steps to maintain the registration by filing certain documents showing that the mark is continuing to be used. The USPTO may cancel a registration if the owner fails to make the required filings.