Attorney Advice: Understanding Trademarks

We are pretty lucky to have an attorney in the Sola community who just so happens to be not only a well-established barber but also one of our 2018 Faces of Sola. You may remember Chris Matthew from Dillinger’s Hair Company and his astute business advice he provided our community with a couple months back. Well, he’s back and he is going to give us a lesson in understanding trademarks.

To help you navigate the wonderful world of trademarks, we proposed a series of questions that one would ask to have a better understanding:

Do I need a trademark registration to be in business?

“No,” he explains, “but if you want to be a brand, registering your mark may be the move.

“Contrary to popular belief, not every business needs a registered trademark. You can be perfectly successful without registering your mark or using a common or descriptive name for your business. There are probably thousands of successful Gino’s Pizzas in the country but only a handful have bothered to attempt to register their marks.”

What exactly then is “a trademark?”

“By definition,” Chris shares, “a trademark is a distinctive symbol, design, word or phrase, used by an individual, business, or other entity to indicate that the product or service with which the trademark appears, originates from a specific source.”

Okay, can you maybe put it in a simpler way of understanding?

“Simply put, a trademark serves to link a product or service to a particular company or provider,” he explains. “Your trademark says: ‘buy me’ because I come from ‘ABC’ company. It’s a symbol of the goodwill (or lack thereof) of the owner's goods or services. Your hope is that someone will hear your name or see your logo and immediately think, ‘I like that company. I’ll buy from them again.’

Why would a business or brand then need them?

“The overarching purpose of a trademark is to allow the public to recognize the goods or services as those of a particular company. First, it seeks to prevent the public from being confused about the source of the goods or services. This way, every time you eat a Big Mac you know it came from McDonald's and not some imitation burger joint, like McDowells. Further, by making products easier to identify with trademarks, companies have an incentive to invest in the quality of their goods. If they don’t, the public will associate their mark with poor quality or service.”

“Secondarily,” Chris continues, “a trademark helps to ensure that the trademark owner, and not an imitative competitor, will reap the rewards associated with a desirable product. Let’s use Big Mac again as an example. The idea is to protect the provider of the goods and services; the companies. By allowing a trademark owner to monopolize a particular phrase, logo or symbol, creators can profit from their work. Imagine if a low-quality hair company was able to freely use the Vidal Sassoon name or something similar. The public would be misled and Sassoon’s reputation would suffer as well as their bottom line. By acting as source indicators, trademarks attempt to promise a consistent level of quality thereby helping the consumer to decide whether to purchase a product or service again or to avoid an undesirable one.”

Well, that makes more sense. But what makes a mark capable of protection?

“Two basic requirements must be met for a mark to be eligible for trademark protection: it must be in use in commerce and it must be distinctive.

“The main requirement for something to be capable of trademark protection is that it is distinctive and thereby capable of identifying a particular good or service. Distinctiveness is the reason ‘Google’ can be a registered trademark and Pizza cannot. Before Google decided to use the term to identify its search engine, the term didn't exist; so it's very distinctive. The term Pizza does not and can never identify a particular pizza parlor or brand because “Pizza” is necessary to identify Pizza. If a single owner could monopolize a term like pizza then the rest of the pizza places in the world or at least in the country would have to come up with a new way to describe their pizza-like product –and that would just be stupid right?”

What are some strengths of marks?

“All trademarks are not equal,” Chris adds. “Some are strong, some are weak and most are somewhere in between. When first registering a mark for protection, we look at the mark along a spectrum. The spectrum ranges in strength from generic to descriptive to suggestive to arbitrary/fanciful.

“The more distinctive a mark is, and the more well known the mark becomes, the wider the mark’s scope of protection will be:

• Generic: A generic term for a product or service cannot be registered for trademark protection. Remember our pizza example? You cannot protect the word “pizza” for your pizza parlor or “salon” for your salon. If the United States Patent and Trademark Office (USPTO) allowed you to monopolize pizza, other pizza businesses would not be able to describe their product. On the other hand you could probably use “Pizza” for a line of shaving creams if you wanted since it is not generic or descriptive of shaving cream. You probably wouldn’t…but you get the idea.
• Descriptive: A descriptive mark is one that describes the qualities, ingredients, or characteristics of a product or service. Descriptive marks do not receive trademark protection unless the mark user can show it has gained a secondary meaning. Descriptive terms can acquire distinctiveness through extensive use and advertising. An example of a mark achieving secondary meaning is the fast food restaurant ‘McDonald’s.’ Generally a surname will not be registered as a distinctive trademark, however, McDonald’s has become so famous and recognized that it has acquired distinctiveness and become an extremely strong trademark.
• Suggestive: Suggestive marks are marks that suggest a quality or characteristic of the goods and services. In practice, suggestive marks may prove difficult to distinguish from descriptive marks. Suggestive marks require some imagination, thought, or perception to connect the mark to the goods or services. Descriptive marks allow one to reach that conclusion without such imagination, thought, or perception. Microsoft is an example of a suggestive mark. Android is another. They both allude to the products offered but it takes a bit of a mental leap to connect them.
• Arbitrary: An arbitrary mark utilizes a term having a common meaning that has no relation to the goods or services being sold. A great example of an arbitrary mark is Apple for computers. You could not register “Apple” for apples, but it worked for computers and is one of the biggest trademarks in the universe.
• Fanciful: Last, fanciful marks are devices that have been invented for the sole purpose of functioning as a trademark and have no other meaning than acting as a mark. They are usually made up words or terms. Fanciful marks are considered to be the strongest type of mark. “Google” is a great example of a fanciful mark.

How can I own a trademark?

“First, we have to fully understand how trademark rights are gained,” Chris goes onto explain. “Trademark rights come from use in commerce, not federal registration. Federal registration extends many important rights to the trademark owner, but registration usually comes after use. Basically, the first business to use the mark in the marketplace on a particular good or service owns it (only for those goods and services) against later users. The minute a business or product name is used with the intent to reach out to potential customers, trademark rights are gained. You don’t have to register.

“This is where trademark law gets funky. Since there are no registration requirements, it can be hard to track down others that already have rights in a trademark that you are considering. (This is where lawyers and comprehensive searches are invaluable). There may be a salon out in Montana that has been using the name you want for years. They may not have much of an Internet presence and no state or federal trademark registrations, but technically they have rights that may be superior to yours.”

What should I do next?

“If you are going to register, federal registration is the only thing that really makes sense. State registrations don’t really provide any additional benefits whereas a federal registration extends your rights significantly. First, registration provides the owner with nationwide rights to use the mark. It also puts others on ‘constructive notice’ of the owner’s rights. “

Constructive Notice? That sounds complicated.

“Constructive notice means that parties are presumed to be aware of the mark holder’s rights even if they are not actually aware, as a simple search of the USPTO register would have revealed the registration. Trademark registration also allows you to maintain a federal lawsuit. Since you own a federal trademark registration, you can sue infringers in federal court. You can also sue for attorney’s fees and treble (3X) damages if the infringement is rooted in counterfeit.”

How long is that trademark good for then? 

“After five years your registered mark becomes incontestable,” he adds.

How long does it take to actually go through the process?

“Registering a trademark generally takes between six months and a year. After filing an application, a Trademark Examiner for the USPTO will review your application, and if it passes muster, the application will publish in the Official Gazette. Once published, any party that feels that the registration will affect its own rights has 30 days to object to the registration in an opposition proceeding. (Here is where our unregistered friend from Montana could intercede if they became aware of your application). If there is no opposition, the USPTO will issue a registration certificate and you will be the proud owner of a trademark.”

Can I do this on my own or should I get myself a lawyer?

“If you decide to register a trademark, my advice is to get a lawyer,” Chris says. “If you cannot get a lawyer then do it yourself but don’t use an online trademark service. First, while the application may seem straightforward and self-explanatory, trademark practice is rife with nuance. There is strategy involved in nearly every aspect of the filing. The process is quite tricky and 75-80% of applications receive initial refusals called office actions. Many office actions can be overcome by filing a legal brief in order to persuade the USPTO to approve your application but this is not something non-lawyers and non-trademark lawyers are well versed in. Online services often do not focus on proper filing and will charge you additional fees the respond to office actions. Otherwise, you are on your own to clean up their mess.”

At one point should I go through with registering my trademark?

“Register your mark early in order to avoid expensive issues later. One of the best and most cost-effective ways to protect your trademark is to register early in the game, sometimes even before you actually use it in commerce (Intent-to-Use applications allow you to start the application and prove use later). Registering will not magically keep you from ever having to institute or defend a legal proceeding but it will put you in a position of leverage and impart a host of benefits that you would not have without registering.

“One such benefit is that the USPTO will help to prevent infringement on your marks at no cost to you. The Trademark Office has a duty to cite prior registrations against applications for marks that are confusingly similar and to refuse to register such marks. You get the comfort of knowing that it is unlikely that a similar mark will be registered in the same class as yours all for a premium price.

“Most importantly, you will not have to prove that you have superior rights in your mark. By registering it is presumed that you are the mark’s rightful owner. Anyone who wants to contest this will have to institute a proceeding and prove that they truly own the rights in the mark. So now that salon in Montana has to fight for its own rights. Often when a company decides not to invest in a trademark, they won't invest in a lawsuit to defend it either. Further, after five years your mark becomes incontestable making you the rightful owner.

“The sooner you start the clock the sooner you start banking these benefits.”

You just shared a lot of information. What should I always remember when it comes to trademarks?

“A trademark can be one of the most valuable assets your business owns,” he shares. “If you are serious about building a brand, treat it as such. Invest in it and don’t cut corners. Spending a few thousand dollars with a lawyer can save you boatloads of money later. I have had clients spend six figures fighting a lawsuit because they didn’t spend $3,000 to register their trademarks earlier.

“Contrary to popular belief, not every business needs a registered trademark. You can be perfectly successful without registering your mark or using a common or descriptive name for your business. There are probably thousands of successful Gino’s Pizzas in the country, but only a handful has bothered to attempt to register their marks. So you don’t need a trademark registration to be in business.

“But if you want to be a brand, registering your mark may be the move,” he ends with.

To get more advice from our resident barber/attorney, check out Chris’ 5 Business Tips from an Attorney here on the Sola blog.