The Care and Feeding of Your Trademark: Or How To Avoid Losing This Valuable Company Asset

Published on: 2/28/2007

1. Spotting the Trademark (What is a Trademark?)

A trademark is a symbol, design, name, image or word used to identify a particular good or service as being offered by a particular source. Trademarks, and their cousin, the service mark, allow consumers to seek or avoid the products sold under those symbols. Imagine the BURGER KING king mascot, the Ford oval, the shape of a Coca-Cola bottle or the slogan, “JUST DO IT” for athletic apparel. Without them, how could consumers distinguish one company’s hamburgers, automobiles, soda or tennis shoes from another’s?

Trademarks, sometimes called brand names, protect commercial goodwill, and thus are important business assets that themselves must be protected and used correctly.

A trademark is not a description of a product or a type of product. In fact, a trademark is often followed by such a description: FORD trucks, COCA-COLA soft drinks, NATIONWIDE insurance services.

Trademarks can be:

  • words (McDONALD’S; APPLE);
  • stylized words (COCA-COLA, FORD);
  • logos, symbols, designs and shapes (Nike swoosh, McDonald’s golden arches, Apple Computer’s apple, Microsoft’s butterfly);
  • letters (IBM, CNN);
  • numbers (409 cleaner, CHANEL No. 5 perfume);
  • telephone number combinations (1-800-MATTRESS, DIAL-LAWYERS);
  • abbreviations (COKE, BUD, VW);
  • slogans (“COLOR SO NATURAL ONLY HER HAIRDRESSER KNOWS FOR SURE” for Clairol hair color; “FINGER LICKIN’ GOOD” for Kentucky Fried Chicken food);
  • colors (pink for OWENS CORNING insulation, green-gold for QUALITEX brake pads);
  • shapes (COCA-COLA bottle, APPLE i-Pod Nano);
  • building designs (MCDONALD’S restaurants, FOTOMAT kiosks);
  • clothing (DALLAS COWBOYS cheerleader outfits);
  • sounds (NBC chimes, MGM lion’s roar);
  • fragrances (PLUMERIA scented yarn).

When a mark identifies services, rather than goods (APPLEBY’S for restaurant services; ERNST & YOUNG for accounting services), the mark is technically called a “service mark,” instead of a trademark. There is no practical difference between a trademark and a service mark for federal or state registration purposes. The registration procedures and the scope of protection offered for each are identical.

It is important to note the difference between a trademark and a trade name. A trade name is the name of a company. Many companies check with their Secretary of State to determine if a trade name or corporate name is available in that state. If the Secretary of State allows registration of that corporate name, it means only that there is not a preexisting company with a confusingly similar name in that state. The Secretary of State is not responsible for determining whether the proposed corporate name infringes the federal or state trademark rights of another party.

For example, a company could form a North Carolina corporation called McDonald’s Restaurants, Inc. in North Carolina, because no other corporation has registered that name. Most likely, however, if it were to do so, it would receive a cease-and-desist letter from the McDonald’s hamburger chain in short order; although the trade name is available, the proposed name infringes the trademark rights of another business.

Trademarks exist, and others can be prohibited from using them, whether or not they are registered, although Sands Anderson Marks & Miller strongly recommends protecting your valuable trademark with a state or federal registration.

2. The Natural Habitat of a Trademark (Using the Mark as a Trademark)

To obtain rights in a trademark, the name needs to be affixed directly on the goods, the packaging or the container and sold in commerce. A service mark must be displayed in the sale or advertising of the service. One way to tell if your company is using a trademark is to look for "specimens." When registering a trademark or service mark, an owner is required to submit several examples of how the mark is used in commerce to identify the source of the goods or services.

If a computer company introduces a line of laptops called "PORTABLE POWERHOUSE," but does not use the mark on the computer itself, advertisements, labels, packaging, point of sale displays, or promotional literature in showrooms, and uses only a model number internally to designate this line, it cannot prove it actually used the mark as a trademark. Customers would never see the term PORTABLE POWERHOUSE in connection with the goods, and thus, PORTABLE POWERHOUSE does not really identify who manufactured the computer to the public.

Similarly, the owners of "CANINE CREATIONS" dog grooming service are well advised to include a description of the services on their business stationary, promotional materials and advertisements, so that customers will associate CANINE CREATIONS groomers with the particular company that offers the service of picking up your dog, taking it to a groomer who will create a unique hair style d color for your dog, and deliver the dog back to your home at the end of the day.

3. The Care and Feeding of a Trademark: (How to Use a Trademark To Properly Identify Your Company)

Once your company has created a trademark, it is essential to make sure you don’t lose your rights to this valuable asset through improper use. Whether or not a mark is registered, it is important to prevent it from becoming a generic or descriptive term and losing its proprietary significance. Who wants to own the next failed trademark: escalator, kerosene, thermos, cellophane, shredded wheat and aspirin.

Here are some tips to make sure your company and its trademark enjoy a long and healthy relationship:

  • Always set the trademark apart from other words appearing nearby (through different lettering styles, quotation marks, capital letters or other appropriate means):
    • TEXAS PETE hot sauce
    • Tabasco brand pepper sauce
    • "Pace" chunky style picante sauce
    • Old El Paso salsa
  • Use a trademark symbol after the name of the product. The "® " symbol indicates that the mark is subject to a federal registration, while the "™" symbol indicates a state trademark registration, a common law trademark or a trademark that has not yet received federal registration. It is important not to use the "®" symbol until the federal registration certificate is issued. If your mark is subject to a state registration only, you are not allowed to use the "®" symbol.
    • Coca Cola® soft drinks
    • Introducing Tranquility™ brand mountain spring water
  • A trademark is always an adjective, never a noun or verb.
    • Correct: make a copy on the XEROX copier; Let’s play with a FRISBEE brand flying disk; I’m going to use SIMONIZ paste wax on my car)
    • Incorrect: Make a XEROX of these for me, Let’s play with the FRISBEE; XEROX these documents for me, I’m going to SIMONIZ my car
  • A trademark is never used in the plural form or the possessive form.
    • Incorrect: Let’s play with some LEGOs; I think KLEENEX’S quality is the best.
  • A generic identifier always follows the trademark. This is absolutely essential when you are introducing a completely new type of product. Often, the creators of new products coin two names for the product, allowing one to become the generic identifier of the type of product, so that the other can be protected as a trademark. Consider, for example, SANKA brand decaffeinated coffee. "Decaffeinated" was created to describe coffee without caffeine, and "SANKA" (derived from "sans caffeine") was created as the brand name.
    • Correct: KODAK cameras, JEEP sport utility vehicles, LEVI’S jeans.
  • Make sure other people are using your trademark correctly. Several companies offer "watch" services that monitor thousands of databases for uses of your mark, and notify you when a third party attempts to register a similar trademark.

 

(First published in the February/March 2007 issue of The Retail Review, newsletter of the Virginia Retail Merchants Association.)




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