Trademark Law

Definition and Purpose of Trademarks
A trademark includes a word, name, symbol, or device or any combination thereof used by a manufacturer or seller to identify the source of its goods or services and to distinguish them from those of others.  A service mark is a trademark which applies to services.

The primary purpose of a trademark is to indicate the origin of the product or service.  Trademarks also warrant the quality of the goods or services and are used to generate and sustain demand.  Trademark rights are acquired by use or applying for a federal trademark registration prior to use.  Use of the trademark must ultimately occur, and must continue if the rights so acquired are to be preserved.

Value of Trademarks
The trademark of a business represents the goodwill of a business which is an important asset.  For well-known companies, e.g., Coca-Cola, etc. a trademark may be the company’s most critical asset.  Even for newer companies, the trademark personifies the spirit of the business.  The business owner may consider infringement as a direct threat to his property rights in that business.

A business which invests significant time and money in developing and marketing a product or service needs assurance that consumers will readily associate the business and its trademark.  By using a trademark identifying the business’ product or service exclusively, the business should establish brand loyalty among customers.  A business selling private label goods which are made to its specifications by other manufacturers will use its mark to identify the seller as the source of the goods.

Three bodies of law protect trademarks: common law, federal law and state law.

Common Law Trademarks
A business may protect its trademark under common law by merely adopting the mark, affixing it to a product or service and using it in commerce. No registration is required.  But common law trademark offers protection only in the geographical area of actual use of the mark, and so is highly unreliable.
Common law rights commence when a mark is first used with the goods or services before the public.  These trademark rights are enforceable in local courts, but are limited geographically to the territory of usage.  Although registration is not mandatory, there are several key advantages in registration, including establishment of supplemental rights in the trademark and constructive notice to subsequent parties of the ownership claim.

It is easier and less costly to prevent a competitor from using a similar mark when the owner has registered its mark, rather than relying on common law rights.  Federal registration ordinarily provides a strong deterrence to others from using the same or a similar mark.

Federal and State Law Registration
The federal trademark statutes are contained in the Lanham Act enacted in 1946 and amended in 1989.  The Lanham Act significantly expands common law trademark rights by regulating unfair trade practices, whether or not trademark rights are involved, and without a federal trademark registration.Trademark registration in the Patent and Trademark Office (“PTO”) neither creates nor establishes exclusive rights.  Registration grants the owner the right to utilize the mark to distinguish its goods.

A mark must be adopted in interstate commerce to be eligible for registration.  It is not required to use the mark prior to filing an application.  An intent to use application may be filed declaring the owner’s intent to use the mark.  The application will be adjudged, however registration will not be permitted until usage occurs.  Because availability of the mark is known in advance of investment in advertising and other costs, it is wise for any business planning to use a new mark to file an intent to use application.

Unlike the patent and copyright clause, there is nothing provided in the Constitution specifically applicable to trademark law. The States have greater power to enact and enforce trademark laws than patent and copyright laws, which are pre-empted.  Moreover, State courts can hear cases that include causes of action based on Federal Trademark Law.  The first issue in trademark litigation typically is whether there is a protectible mark owned by plaintiff.

Trademarks may be registered in States in which they are used.  This is advisable only when strictly local use of the mark is intended because state registration offers limited benefits compared to federal registration.  Proceeding with both avenues of registration may be advisable.

Notice of Registration
An owner of a federal registration should give notice that the mark is registered by displaying with the mark the words "Registered in U.S. Patent and Trademark Office", or "Reg. U.S. Pat. and TM. Off.", or the letter R enclosed with a circle.  It is improper to use the notice before the actual issuance of a certificate of registration for the mark and may constitute a basis for refusal of registration.

Use of Trademarks
Trademarks must be used properly to preserve the rights.  A mark that becomes a generic product name is loses its trademark rights.  Examples of marks that became generic are aspirin, nylon, yo-yo and cellophane.  Certain practices can be utilized to avoid this problem.  The generic product or service name should be used together with the mark.  The mark should be used as an adjective, not as a noun.  For example, “Kodak” film, “Kellogg’s” corn flakes, and “Xerox” copiers.  The trademark may have a distinctive typographic style.  It is preferable to capitalize either the first letter or the entire mark.  Bold type or a printed logo may be used.  It is essential to be as consistent in displaying the mark in public.  The trademark should be labelled.

Even prior to registration, the owner may use a superscript abbreviation (TM for trademarks; SM for service marks) adjacent the mark.  After registration in the PTO, the letter R enclosed in a circle should be adopted.  It is desirable to use the mark for more than one product or service.  The mark will have a greater likelihood of recognition as the business’s identity, instead of the name of a particular product.  It is more cost effective to establish rights in one well-recognized mark.  Goodwill accruing to the mark will attach to newly introduced products.

Time Limits
There are no time limits for a trademark application at the state or federal level.  However, delay in filing to register a mark may create difficulties if another party files an application for a similar mark.  It is highly recommended to file trademark applications promptly.

Trade And Commercial Names
Trademarks are fundamentally different from trade and commercial names used by manufacturers, merchants and others to identify their businesses or occupations, or the names adopted by persons, firms, associations, companies, unions and other organizations.  The latter are not subject to registration unless actually used as trademarks.

State registration of a corporation name or licensed business name does not confer trademark rights since these only emanate from use of a name or word on product labels or in connection with offered services.  It is essential to understand that trademark registration is separate from business registrations with the Secretary of State in a state.

If business is conducted under a name which is not the person’s legal name or the name of a corporation, the business must register the fictitious business name in each state in which it transacts business.  Failure to so register may affect the business’ right to bring proceedings in the state courts to claim legal rights against others.

Choice of Trademarks
The word, symbol or design or a combination thereof may not be purely descriptive of the product or service concerned.  A descriptive mark or a common surname or geographical name will not be adequately distinctive to qualify for registration.

Deceptive marks are not allowed.  For example, a mark suggesting that the product has characteristics that it does not possess are not permitted.  Because there are countless registered marks, it is often difficult to find one suitable for a product or service and also available for registration. A number of possible marks should be searched against marks that are registered, applied for or in use.

Types of Marks

Trademarks are any word, name, symbol, or device used to identify and distinguish goods in the marketplace and to indicate the source of those goods.  Trademarks are identifying marks which the public associates with a single source of goods.

It is possible for a single product and its marketing to involve many different trademarks, e.g.  McDonald's, which owns trademark rights in its name, its logo, the distinct name of its products and its packaging, among other trademarks.

Service Mark
Service marks are identical to trademarks except that service marks are intended to indicate the origin of services rather than of goods.  Examples of service marks are "Sears" retail services, "Wells Fargo" banking services, and "UPS" delivery services.

A mark may be protected as both a service mark and a trademark if it is used in both ways.  An example of this is "Wendy's" which can function both as a trademark when used on hamburgers and as a service mark when used on a retail business selling hamburgers.

Collective Mark
Collective marks indicate association with a group such as a union or other organization.  An example is the trademark for the AFL-CIO, a labor union.

Certification Mark
Certification marks are used to indicate origin of goods or services, or particular characteristics, including being produced by members of a union. These marks are often used to indicate a guarantee, for example, the Good Housekeeping Seal of Approval and the Underwriter Laboratories.

A tradename is not a trademark.  A trade name is the name of the business and, unlike a trademark, signifies the entire business and not an individual product or service.  Trade names cannot be registered under the Lanham Act or California trademark statutes.  To determine if a particular usage is as a trade name or a trademark, determine whether the term is used as a noun (trade name) or as an adjective (trademark).

Forms of Marks
1.   Word(s) including surnames and geographical terms

Words are the most common form of mark.  Examples of this are using the word "Apple" as a mark for computers, "Polar" for ice cubes, and "Tide" for detergent.  Businesses frequently use the owner's surname in a mark, as in "Heinz" ketchup or "Bell" telephone.  Business also frequently use geographical location as a trademark, such as "Waltham" watches and "Los Angeles Times" newspaper.

2. Letters
Individual letters can serve as marks.  Some examples are "YMCA" and "B & B Scotch."  Numbers can also be used as marks.  Composite marks of both letters and numbers include "Chanel No. 5" and "V-8."

3. Slogans
Slogans can be used for trademarks, such as "We Try Harder" for rental car services and "The Night Belongs to Michelob" for beer.

4. Symbols
Graphic symbols, logos and artistic designs are commonly used as marks to identify source and quality of goods or services.  These were in fact the first marks, used before reading became universal.  Some examples are the five interlocking rings of the Olympics, the Wells Fargo stagecoach design, and the blue cornflower design used by Corning Glass Works.

5. Color and color combinations
Color can also serve as a trademark.  In 1985, Owens Corning Fiberglass Corp. was given a registration for a single shade of pink when used for fiberglass insulation.

6. Sound
Sound can serve as a mark, such as songs used in advertising campaigns.

7.  Smell
Recently a federal registration was issued for a specific flower smell used on yarn.

8.  Trade dress and product configuration
Trade Dress
Trade dress is the form in which a producer presents his product to the market, and typically includes labelling and packaging.  Trade dress involves the "total image" of a product and can include features such as size, shape, color, texture or graphics.  The test for whether trade dress can serve as a trademark (i.e. to identify and distinguish the source of goods or services) is whether the labelling and packaging is sufficiently distinctive that it serves primarily as a source identifier.

Trade dress may be protected only if it is non-functional.  Functional features are protected through patent law, which grants exclusive rights for only a limited time (unlike trademark law).  Trade dress or product configuration is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article.

Packaging of a product is more likely than the product itself to be found nonfunctional and potentially protectible as a trademark.  A major exception is when the shape of the packaging is very strongly dictated by the nature of the product itself.  This occurred with packaging for a dimmer switch which conformed closely to the contours of the product; the packaging was found to be functional and non-protectible.

Typical of products that received trade dress protection are the traditionally-shaped Coke bottle, the Perrier bottle, and the Fotomat kiosk.

Foreign Trademarks
Trademark registration covers only the country of registration.  Separate applications must be made in each country where the mark is used.

Trademark owners with business in foreign jurisdictions desiring to trademark protection in those countries must consult trademark attorneys in those countries.  In certain foreign countries, a resident may obtain a trademark registration even though the mark has not been used in trade.  These registrations are often used to prevent the importation into that country of goods bearing the mark.

To obtain foreign registration, registration must be effective in the United States.  After securing U.S. registration, the owner may obtain foreign registration before using the mark in such countries.  The duration of registration in foreign countries varies country by country.