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Proper Use of a Trademark

A registered trademark can last forever if you take the proper steps to care for your it.  A trademark owner obtains rights to a trademark because of its distinctiveness and through actual use of the trademark in the marketplace.  If the trademark ever loses its distinctiveness or the owner discontinues its use in the marketplace, the rights to that trademark may be lost.

Trademark: Actual Use

This concept is fairly self explanatory.  You must continue to use your trademark to represent the goods/services you provide the public marketplace.  If you stop using a trademark in commerce it will be considered abandoned and the federal trademark rights will be lost.  Between the 5th and 6th year following the registration of your trademark you need to file an affidavit of continued use with the USPTO.  This document simply states to the federal government that you are continuing to use the trademark in commerce.  There is another renewal document that needs to be filed in the 10th year following registration and every ten years thereafter.  This document is a renewal of the original registration.

Trademark: Distinctiveness

Just as trademark rights can be lost through discontinued use, they may also be lost when a trademark no longer distinguishes the trademark owner’s goods or services from other goods and service in the marketplace. Loss of distinctiveness usually happens in two ways: (1) trademark become generic, or (2) trademark become descriptive. When a trademark become generic it is usually due to the enormous popularity of the product or service. For example, the term “aspirin” used to be a trademark owned by the Bayer Company.  It was a brand name until its popularity grew worldwide to the point of becoming a generic term for, well, aspirin.  The same is true of escalator, cellophane, linoleum, and thermos.  All of these used to be brand names of the goods they represented.  However, today we use them as generic terms.

The second way of losing distinctiveness is when a trademark becomes descriptive. A modern example might include “search engine optimization.” Whoever first invented this term may have had the idea of registering a trademark for their new service.  However, as more and more consultants began optimizing their client’s websites for search engine results, the more this term would have become a description of a type of service rather than a distinctive brand.  Another example of this is Google.  Although it is still a viable trademark, there is a threat that the term Google will become descriptive of doing a search on the internet.

There are ways to prevent your trademark from becoming generic or descriptive.  Always use your trademark as an adjective. For example: Cool-Aid brand beverage, or Xerox brand copy machine.  Avoid using your trademark as a verb (e.g. google it, or let’s go rollerblading). Use the appropriate symbol on your trademark.  If your trademark is registered with the USPTO you can use the ® symbol.  If not, you can use the TM mark.

Proper use of your trademark can create enormous value for your business that can last in perpetuity.

Trademark Application

When you seek to register your trademark with the United State Patent and Trademark Office you will be required to file a specific application.  This trademark application is very specific and technical in its requirements.  Here is what you should prepare for when filling out the online trademark application:

1. The applicant’s name and address – this is the person or entity that will own the trademark. For example, Apple, Inc. owns the iPhone® trademark and would be the applicant on the application.
2. The applicant’s entity type – this is where you specify whether you are an individual or a company.  If you are filing on behalf of a company put the type of legal entity whether corporation, limited liability company, partnership, etc. You are also required to list the country of origin.
3. A description of the goods/services that your trademark will represent in the marketplace – this gives the applicant the opportunity to write a detailed description that has enough specificity to pass the examining attorney’s scrutiny.  The USPTO provides a database of approved language for many goods and/or services that have already been registered and they consider to additions all the time.
4. The basis for the application – here you will make a statement indicating whether you are actually using your trademark in commerce or alternatively, you will state that you have a bona fide intent to use your trademark in commerce.  If you are actually using your trademark in commerce you will also need to provide a specimen showing how your trademark is being used.  If you file an “intent-to-use” application then you will not need to provide a specimen until you start using your trademark in commerce.
5. A drawing of the trademark – this can be just the text of a word mark or the design elements of a logotype mark.
6. The class number under which the goods/services are classified – there are 45 international classes that the USPTO recognizes and your goods/services will fit into one or more of these.
7. A declaration that all of the statements contained in the application are in fact true.
8. A fee in the amount of $275-$325 per class depending upon the type of application you use.

The application is fairly straightforward, however, several items can be very technical and confusing to someone who has had limited exposure to trademark prosecution.  It is advisable to consult with an attorney before filing a trademark application in order to avoid infringement, abandonment or final refusal of your trademark by the USPTO.

How To Register A Trademark

You can register a trademark at the state or federal level.  Since most people concerned with registering their trademark want the full protection of the federal government, this articles addresses federal registration only. Registering a trademark consists of three distinct steps: (1) clearing a trademark, (2) filing a trademark application with the United States Patent and Trademark Office (USPTO), and (3) monitoring and responding to actions from the USPTO or other third parties. The trademark registration process can take up to one year. Here is a brief description of how to register a trademark.

Trademark Clearance

Clearing a trademark for registration consists of conducting a search, analyzing the search results and determining whether your proposed trademark is registrable. A search is typically done by hiring an attorney who will order a professional search report from a trademark search firm.  The search report is usually 50-100 pages long and will contain keywords related to your proposed trademark.  Your attorney will analyze the search results to determine whether in his/her opinion your proposed trademark will infringe on another trademark.  The test used by your attorney is called the “sight, sound and meaning test.”  Essentially, your attorney will be looking for similarities in the look and appearance, the spoken sound and the meaning of your proposed trademark. If your attorney determines that your proposed trademark is not in danger of infringement then he/she will write an opinion letter advising you on the viability of registering your trademark.  There are other reasons why a trademark may not be registrable.  Your attorney should advise you on these as well.  Here are some reasons why a trademark may not be registrable:

• Words or symbols comprising the trademark that do not function as trademarks in the marketplace (consumers don’t identify with the trademark)
• The trademark is immoral, deceptive, or scandalous
• The trademark is a flag, coat of arms or other symbol of the United States or another governmental entity
• The trademark is a name, picture or signature of a living individual or deceased president of the United States whose spouse is still living
• A merely descriptive trademark
• Any trademarks that are deceptive, disparaging, misdescriptive or falsely representative of people, institutions, beliefs or national symbols
• Trademarks that are primarily geographically descriptive or deceptively misdescriptive
• Trademarks that are primarily a surname

Trademark Application

The application for registering a trademark with the USPTO is fairly straightforward but technically precise. If you are unfamiliar with trademark law you should definitely leave this to a professional.  You must provide the name and address of the owner of the trademark, a drawing of the proposed trademark, a description of the goods/services that the trademark will represent in commerce, a basis for claiming rights in the trademark, the classification of goods/services, and a filing fee that ranges from $275 to $325 per classification. Most of this information is very technical and if done incorrectly can result in the abandonment of your trademark application.  See my article on Trademark Application for more information. Once you have filed your application and paid the fee you will begin the long waiting process of registering your trademark. The next step in the process of trademark registration is the examination process.

Office Actions and Oppositions

The examination process begins with a month waiting period just for your trademark application to be assigned to an examining attorney.  Once the examining attorney receives your file they will review it to find reasons to reject it. Literally.  Many trademark applications are initially rejected for either substantive reasons or problems with the application.  The rejection will come to you as an office action.  You have six months to respond to an office action or else your trademark application will be abandoned. Responding to an office action is much like responding to a lawsuit.  You have to convince the examining attorney that your trademark should be registered.  The examining attorney will usually try to follow the law but occasionally their reasoning will defy the bounds of logic.  At this point if you haven’t already done so it is probably a good idea to hire a lawyer.  Simple, non-substantive office actions can be resolved by calling the examining attorney and discussing their objections.  More substantive office actions require a written response which can be done through the USPTO online filing system.  Opposition actions are brought by third parties who believe that your proposed trademark is infringing on their trademark.  These actions are complicated and won’t go away with a negotiated settlement or order from a court.

If you make it through these three steps you will be the proud owner of a federally registered trademark. Now you just need to continue to protect your trademark, prevent others from using it, and file the required updates with the USPTO, and your trademark will remain viable in perpetuity.

Trademark Registration – Professional Advice Needed

The trademark registration process is not quick and easy.  The United States Patent and Trademark Office has tried to simplify the trademark registration process by creating an online form that can be filled out by those who wish to register a trademark.  However, there are some hyper-technical rules to consider when you attempt to register a trademark.  If you fail to comply with these rules or submit information that is incorrect you could jeopardize the federal protections available through a federally registered trademark.  Here are some items to consider when filing a trademark application:

1. Decide whether you will file a trademark application for the text or words, the logotype (or both) of your proposed trademark.  Many trademarks consist of both words/text as well as a logo or design.  For example, Apple® is a trademark attached to computers and electronics manufactured by Apple, Inc., but you would likely recognize the symbol of the apple with a bite out of the right side as Apple’s logo.  Both the text/word and the logo are trademarks and can each be separately registered as federal trademarks.
2. Decide what goods/services your trademark represents.  You may have a trademark that represents one specific product or service.  If that is the case then it may be easy to find a description for the goods/services that your trademark represents.  However, you also want to consider whether you will use your trademark to represent other goods/services in the future.  For example, Xerox first filed a trademark application describing their product as follows: “COPIES OF TYPEWRITTEN OR PRINTED MATTER, DRAWINGS, MAPS, OR ANY OTHER RECORDS, SOLD AS SUCH, MADE BY AN ELECTROPHOTOGRAPHIC PROCESS.” Later they filed another trademark application to expand upon that description.  It is important to remember that once you have filed a trademark application you cannot broaden the description of your goods/services.
3. Decide whether to file an “intent-to-use” or “actual use” trademark application.  An intent-to-use trademark application is used when you have a product or service that you plan to use at some point in the future but you haven’t actually begun using it in commerce yet.  One benefit of filing for a trademark registration under an intent-to-use application is to secure a date of application  that may give you priority over another potentially infringing mark.  An actual use trademark application is used when you are currently using your trademark in commerce.

These are just a few items to consider before you file for a trademark registration.  It is always smart to contact an expert when dealing with federal laws such as trademark laws. We can help answer your questions relating to trademark registration.  Just ask!

Bart Scott’s New Trademark?

Can a celebrity say a phrase on television and then register that phrase as their trademark?  That is exactly what Bart Scott of the New York Jet’s is trying to do.  On January 17, 2011 in a post-game interview Bart Scott said, “can’t wait” in reference to the upcoming playoffs tournament in Pittsburgh.  Now, Scott has hired an attorney and filed a registration application with the U.S. Patent and Trademark Office to obtain a trademark for this phrase.

HOW IT WORKS

The rules and procedures for registering a trademark are the same for everyone and every business.  The proposed mark has to represent a product or service of some type, it has to be used in commerce and it can’t be confusingly similar to another trademark.  In this case, Scott is attempting to register “can’t wait” under a 1(b) filing which means he isn’t claiming to be using the trademark right now but he’s promising that he has a bona fide intent to use the trademark at some future date.  The U.S. Patent and Trademark Office will not issue a trademark registration for Scott’s mark until he has begun to use it in commerce and has supplied their office with a specimen to prove how it is being used.  Of course, there will also be a time period in which the public can challenge his assertion of rights to this trademark by filing an opposition with the U.S. Patent and Trademark Office.

BART SCOTT’S GOODS

In this case, Mr. Scott has filed an application in which he claims a bona fide intent to use the mark “can’t wait!” on men’s, women’s and children’s clothing.  He isn’t claiming that he is using this mark in commerce right now only that he plans to do so.  He doesn’t actually have any rights to this potential trademark just yet.  He will have to produce a product, presumably a T-shirt that has “can’t wait!” splashed across the front before he will be able to convince the U.S. Patent and Trademark Office that he has rights to this mark.

ANSWER

The answer is: people, including celebrities, cannot claim trademark rights to words or phrases simply by virtue of vocalizing these in public (despite what pop culture might tell you).  The word or phrase has to be used in commerce on a product or service and it cannot be confusingly similar to another trademark.

Business and Intellectual Property

The trademark of a business is arguably one of its most valuable asset.  It’s the reason people buy your product time and time again. People are generally risk averse with their money and want to know beforehand what they are purchasing.  Protecting your business’ brand is a direct investment in the future profits of your business.

The process of protecting your brand involves several steps:

1. Trademark Search and Clearance – the first thing you want to know is whether another company is using a mark that is confusingly similar to your proposed mark/brand logo.  This can be done by searching the federal database at the USPTO as well as state databases and common law databases.  A search must include not only direct hits but similar phonetics, spellings or other impressions that a mark might have on consumers.  Once you’ve determined that no other marks are confusingly similar to your proposed mark you are ready to prepare an application.
2. Trademark Application – the application process is fairly straightforward except for two highly technical questions.  The first, is the class of goods/services that your mark represents.  The USPTO has a list of all of the classifications.  Selecting the correct classification will determine whether the mark gets approved by the examining attorney.  It will also be a major factor in the level of protection that the mark will receive once it is registered.  The second, is the description of the goods/services that your mark represents.  Again the USPTO provides a manual of “pre-approved” descriptions for various goods and services.  However, your particular mark may not fit neatly into one of these descriptions.  Drafting an adequate description will also determine whether the examining attorney approves the application and will set the level of protection the mark receives.
3. Trademark Prosecution – after an application has been filed it is assigned to an examining attorney.  This attorney will review and scrutinize the application to ensure that it complies with the federal trademark laws.  Often the examining attorney will have objections to the application.  These objections will be issued as “Office Actions.”  The applicant will need to respond to these actions in a timely manner or else the application will become abandoned and the mark will not be registered.  Some Office Actions are merely procedural in nature while others will involve substantive issues of trademark law.  Resolving these issues is critical to obtaining a registered mark.
4. Trademark Registration – once the application has been reviewed, prosecuted and published for opposition without issue, the examining attorney will approve the application for registration.  This entire process could up to one year to complete.  The benefits, however, could last the lifetime of the mark and provide substantial financial benefits to its owner.

All businesses that are developing a brand to represent their goods/services should consider obtaining and maintaining a registered trademark.  To exemplify this statement consider Coca-Cola.  Management at Coca-Cola have stated that even if the company lost all of its manufacturing plants, buildings, vehicles and other hard assets, it would be able to rebuild itself simply by relying on the brand.  Nike is another excellent example.  As one of the most recognizable brands, Nike is more a marketing company than a sports equipment and clothing company.  The brand is so strong that Nike can license the use of its mark to clothing manufacturers and reap enormous profits without ever opening another factory.  Businesses run on IP.  Protecting that IP is critical to long term marketability as well as competitive advantage.

Trademark Infringement – In Brief

From the United State Patent & Trademark Office (USPTO) online glossary, a trademark is “words, names, symbols, sounds, or colors that distinguish goods and services from those manufactured or sold by others and to indicate the source of the goods. Trademarks, unlike patents, can be renewed forever as long as they are being used in commerce.”  Under the Trademark Act, you can file an application to register your trademark with the USPTO if you are currently using your trademark in “commerce” or if you have a genuine intent to use your trademark in “commerce.”  There are several benefits to registering your trademark one of which is the heightened protection from infringement that your trademark receives once it is registered.  To really understand why this is significant you need to understand the term “infringement” in the trademark context.

Infringement generally means violating a right or privilege.  So in the trademark context infringement refers to violating another’s trademark rights.  If you need a refresher on trademark rights read this post.  Infringement can occur in two ways: Simple infringement and Technical Infringement.

SIMPLE TRADEMARK INFRINGEMENT

Someone uses your trademark without your authorization.  That’s it!  They have infringed upon your exclusive right to use your trademark.

TECHNICAL TRADEMARK INFRINGEMENT

Someone uses a confusingly similar name, word, symbol, sound or color (or any combination) in connection with the same or related goods or services in a way that is likely to confuse, deceive or cause consumers to make a mistake about the source of the goods or services.  This is often referred to as the “likelihood of confusion” infringement.  Since this is a little more technical here are some factors that the courts consider when determining whether a “likelihood of confusion” has actually occurred.

DUPONT FACTORS FOR LIKELIHOOD OF CONFUSION

1. The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression.
2. The similarity or dissimilarity and nature of the goods or services as described in an application or registration or in connection with which a prior mark is in use.
3. The similarity or dissimilarity of established, likely-to-continue trade channels.
4. The conditions under which and buyers to whom sales are made, i. e. “impulse” vs. careful, sophisticated purchasing.
5. The fame of the prior mark (sales, advertising, length of use).
6. The number and nature of similar marks in use on similar goods.
7. The nature and extent of any actual confusion.
8. The length of time during and conditions under which there has been concurrent use without evidence of actual confusion.
9. The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark).
10. The market interface between applicant and the owner of a prior mark.
11. The extent to which applicant has a right to exclude others from use of its mark on its goods.
12. The extent of potential confusion, i. e., whether de minimis or substantial.
13. Any other established fact probative of the effect of use.

Not all of these factors are always considered nor are they given equal weight.  However, it does give the holder of a mark some sense of what the law regards as infringement.

Raising Money: The Private Placement Memorandum

Millions of dollars are raised every year by highly motivated small business entrepreneurs.  Most of that money doesn’t come from the bank.  Banks are very conservative and risk averse when it comes to lending money to small businesses.  Bank wants to see your business generating money before they will make a loan.  As we all know, it takes money to make money.  Many small business entrepreneurs turn to family, friends, savings accounts, retirement accounts or private angel investors for funding.  Whenever you raise money from friends, family or other private investors you need to be give them a document called a private placement memorandum.  A private placement memorandum, commonly called a PPM, is a disclosure document given to investors. Usually when a company wants to raise money they will offer to sell a piece of the company to private investors rather than to the public at-large. Investing in a company always involves a certain element of risk. Investment risks, business objectives, management and capital structure are commonly disclosed in a PPM. For entrepreneurs, the PPM is a critical piece of documentation because it provides a safety back-drop against potential claims by investors. By way of simplistic illustration, imagine you started a lemonade stand and your neighbor gave you $100,000 in exchange for 50% of the profits (notice this isn’t a loan). After years of buying lemons and making lemonade you still haven’t been able to sell any lemonade. Your neighbor might get anxious and ask for his money back. Unfortunately, the money has all been spent on lemons. Now what do you do? Hopefully, you gave your neighbor a PPM so he was aware of the risks. It is a simple fact that businesses fail. When businesses fail, investors usually lose money. On the flip side, when businesses succeed investors usually reap enormous windfalls.

BORING (but important) LEGAL STUFF ABOUT FEDERAL SECURITIES REGULATIONS

When you sell a piece of your company typically you sell shares of stock in your corporation.  This intangible is also referred to as equity in a company.  It basically means you are an owner of the company.  This intangible ownership interest is called a security.  When you offer to sell securities to family, friends or investors it is called a securities offering.  The offering is subject to regulation under the Securities Act of 1933, which are designed to prevent fraud by requiring complex and extensive disclosure and registration of offerings. Complying with the registration requirements of the Act can be time consuming and quite expensive. However, there are exemptions to the registration requirements for some private offerings. Rules 504, 505, and 506 of Regulation D allow for an exemption from registration if certain conditions are met. In addition to federal laws, state laws also regulate the sale of securities by companies. These laws are typically referred to as “Blue Sky” laws. Compliance with these laws in your offering is a necessary part of raising capital for your company. The private placement memorandum gives a company the chance to make some of the same disclosures that are required in a public offering.

DISCLOSE, DISCLOSE, DISCLOSE

Sales people everywhere live and die by the phrase “under sell and over deliver.”  The same concept applies when you are raising money.  Appropriate disclosures in a PPM are a way of “under selling” your business and setting the right expectation with investors.  Equally important is providing investors with the right type of information.  Most PPMs will have the following sections:

• Summary of the Investment
• Risk Factors
• Use of Proceeds
• Capitalization
• Business Plan
• Management
• Description of the Securities
• Terms of the Offering
• Legal and Tax Matters

Mark My Words (and Logos).

Can you actually register that fantastic name, logo or slogan that represents a valuable product or service as a trademark and prevent other companies from using that same name, logo or slogan?

Is your mark qualified for federal registration or will the US Patent and Trademark Office (USPTO) deny your application?

Whether a mark is qualified for federal registration depends upon the following factors:

1. The USPTO must consider your mark to be distinctive.
2. The mark cannot legally conflict with another mark.
3. The mark has to be in actual use.
4. The mark’s use must be subject to Congressional regulation.
5. The mark cannot be scandalous, immoral or deceptive.

If you want to find out more about these five factors, please fill out our contact form and we will email you a pamphlet that explains in more detail the qualifications for obtaining a federally registered trademark.

Do I Own the Copyright?

Whenever an author or creator fixes his/her original work of authorship in any tangible medium of expression a copyright is born. An original work of authorship includes literary works, lyrics, musical compositions, plays, choreographic works, art and graphics, movies, scripts, sound recordings and architectural works. A copyright protects these works by allowing the owner of a copyright the exclusive rights to reproduce, distribute, create derivative works, perform, display and transmit the work. So the question is do you own the copyright?

Copyright Ownership

Initially, the copyright is owned by the author or authors of the work.  Authors of a joint work become joint owners of the work.  For employees who create original works for their employers the author is considered the employer under the copyright laws.  Any work made for hire (or a work created for your employer) vests copyright ownership in the employer (unless otherwise agreed).  In other words, you may have created the work but if you did so as part of your employment then your employer is considered the author of the work for purposes of copyright law.  However, it is possible to have a written agreement with your employers that allows you to be the owner/author of all works you create.   It is important to note that individuals who contribute ideas, procedures, systems, concepts, processes, discoveries or methods of operation do not become owners of the underlying work.  For example, if you and a friend discuss a plot for a new screenplay and only you write it down, you are most likely the sole owner of the copyright.  Your friend may have contributed ideas but the copyright came into existence when it was fixed in a tangible medium of expression.  In other words, if you write it, you own the copyright.  If you are unsure about whether you own the copyright to a work you have authored please contact a copyright attorney and obtain an opinion letter stating that you are the owner of the copyright.