Protecting your Brand – Inception to Global Market

Owners of emerging businesses may feel there are no new marks, that all the marks have already been used. But new businesses form every year and have created some of the most memorable new trademarks, such as Facebook, YouTube, OrganicGirl, Lyft and Airbnb.

Selecting a new mark and protecting it as soon as possible by appropriate registration is an investment that creates instant intellectual property assets and some insurance against problems down the line. Effective protection involves four steps: 1. Searching for availability 2. Registering 3. Using the mark properly 4. Policing the marketplace

Step One: Searching

When you enter a market with a new product, you do not want to select a name that has already been used. The bottom line in selecting a new brand: if you find someone else using the same name for a different product, ask yourself: if I were first, would I want to stop that business from using my name? If the answer is “yes,” don’t select that mark.

In-house you can use search engines or research the United States Trademark Office website at www.uspto.gov. Look around at trade shows and in industry magazines. A thorough search may include hiring a trademark specialist to conduct the search. These services are available online, but using a lawyer familiar with you and your industry is the best bet.

Why search? It is easier to get the bad news of an already-used name sooner rather than later. Product rollout is expensive – and not the best time to find out that there is a conflict over the name in the marketplace. The cost of searching is a type of insurance and investment in your brand. Just like getting the graphics right, conducting a thorough search will pay off in the long run. The cost of searching is offset by the benefit of having a clear road ahead to be able to use your mark and develop your product line.

But I have the Domain Name

Fictitious business name filings, corporate formation, and domain name registrations are not trademark registration protection. Having the rights to a tradename does not necessarily confer rights to use the tradename as a trademark. Filing a fictitious business name statement for the tradename or adopting a tradename as a corporation’s tradename in its filed articles of incorporation does not confer trademark rights. For example, a corporation in California registered as “WHEATIES, INC.” would not thereby obtain any rights to use the mark WHEATIES on breakfast cereal. Neither would owning the domain name: www.wheatiesinc.com. The use of a domain name also does not create trademark rights.

A trademark search is advisable even if a trade name has been previously filed as a fictitious business name, is the name of an incorporated business, or a domain name has been acquired. If the search reveals a conflict, it is advisable to select a different mark to avoid future difficulties.

Step Two: Registration

The global array of goods and services is divided into 45 different “classes” of goods for trademark registration purposes. These same classes are used for registration in most countries worldwide. You will want to register in your main product classes and should consider registering in related classes. For example, fresh produce is registered in Class 31, but “packaged” fresh produce is registered in Class 29.

Costs escalate with each class you register in. Government filing fees are generally $325 per class to apply, another $100 to file “use” statements, and another $150 every six months for extension fees. Throw in counsel fees, which range from $500 to $1,000 or more per application . . . You get the idea.

Why register? Federal registration provides four main benefits: 1. Constructive notice of the exclusive right to use a mark, which means others can be prevented from using confusingly similar marks on related goods and services even if the subsequent user had no actual knowledge of the mark; 2. Authorized use of the“”symbol; 3. Access to federal courts to protect trademark rights; and 4. Prima facie evidence of the exclusive right to use a mark which may, under certain circumstances, become incontestable.

Similarly, with respect to geographic scope, you will want to start in the U.S. and then extend your registrations around the world to relevant markets. Registration is critical in foreign markets. In most countries outside the U.S., the only basis for rights is registration. This is true of China, Japan, the entire EU, and elsewhere. Only in narrow circumstances – for example, where a local distributor has wrongfully registered his principal’s mark in his own name, would local courts throw out “pirate” registrations by unrelated parties. Registering outside the U.S. in key jurisdictions is another situation where an ounce of prevention is worth a pound of cure. Costs for registration outside the U.S. are generally about $2,000 per country where no treaties are applicable, and about $1,200 where treaties are applicable.

Step Three: No Trade, No Trademark: Trademark Use

Registration cannot be completed in the U.S. until a mark is actually used on products and services. Even once registration is obtained, marks are vulnerable if they are not actually used on products. This is also true outside the U.S. In the case of registrations in the EU, for example, if you have the registration but never sell any products under the mark in any part of the EU, the mark could be subject to cancellation.

Use, not registration, creates and maintains trademark rights. Proper usage is essential to creating and maintaining a mark. Owners of a mark should observe three rules: 1. Always use a word mark as an adjective, particularly with an innovative product 2. Set a word mark apart by using a distinctive typeface, capital letters, or least an initial capital letter; 3. Identify a mark as such by using a trademark notice.

If a mark is not registered, proper trademark notice includes using the letters “TM” or “SM” or stating that “ is the trademark of “ in advertising. After federal registration, the designation “,” the phrase “Registered in U.S. Pat. & Tm. Off.”may be used.

Step Four: Trademark Enforcement

Trademarks have an infinite life, provided they are properly used, registered, and protected. Enforcement tools vary: phone calls or emails (or both) from business to business; letters from counsel; filing domain name disputes; filing oppositions to competitor’s infringing trademark applications or petitioning to cancel improperly registered marks. Qualified trademark counsel would recommend the use of one or all of the above steps in a comprehensive, cost-efficient method of enforcing valuable rights. Whenever an infringing use is discovered, the nature and circumstances of the infringement should be evaluated, and appropriate steps should be taken to stop the infringement. If caught early, problems can be solved by negotiation, or via litigation in court, the Trademark Office or in a domain name dispute, as a last resort.

The article entitled “Protecting Your Brand – Inception to Global Market” was published in the 2016 Legal & Accounting Resource Guide published by the North Bay Business Journal.