Introduction to Trademarks

• Trademark: Amongst the various definitions of a trademark, the definition given by the United States Patent and Trademark Office (U.S. PTO) is probably the most comprehensive. The U.S. PTO defines a trademark as “.. a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others.”To put it simply, a trademark identifies the source or origin of goods or services and distinguishes it from a competitor’s product or services. Therefore, a trademark represents the goodwill of a product or service and grants the owner of the trademark the right to prevent others from using the same or a confusingly similar mark for similar goods or services.More than one trademark may be used by an entity to identify the source or origin of goods or services. For example, Coca-Cola®, Coke® and It’s the Real Thing® are registered trademarks of the Coca Cola Company and are used to identify the Coca-Cola beverage.It is important to remember that trademark rights arise by first use, not by first registration.Under common law, trademarks is a form of property; like property, trademarks may be sold, assigned, mortgaged, licensed, etc.
• Service Mark: When a trademark is used in association with services of a product and not goods, the mark is termed a service mark. For example, a service mark would be used by a dry-cleaning service, an accounting service, a restaurant, etc., to identify the service rather than the goods they market.As used in this book, the terms “trademark” and “mark” are synonymous refer to both trademarks and services marks.
• Logo: A logo is a graphical sign or representation which together with its unique typeset forms a trademark. When a word that is descriptive of goods or services cannot be trademarked, it may be possible to get protection for that word when the word is dressed up as a graphical mark and the word is disclaimed from the mark. The graphical representation of the word may make the word distinctive. Disclaiming a word means that the applicant will not claim protection or right to the disclaimed word apart from the mark. An example of a logo is Apple Inc.’s logo of an apple with a bite missing.
• Trade name: A trade name is a trademark for the name of an entity or business. A trade name can be registered as a federal trademark if the trade name is used as a trademark, i.e., if the trade name is used to identify the origin or source of goods or services. A trademark is not intended to identify the entity itself which is what a business name does. For example, the trade name Coca-Cola® is registerable as a trademark for the Coca-Cola brand of beverage.
• Collective Mark: A collective mark is usually owned by an association or organization, the members of which use the mark to distinguish their goods or services from the goods or services of other associations or organizations. For example, the collective mark CA® is used by accountants to identify their membership in the Institute of Chartered Accountants, and the collective mark Realtor® is used by real estate agents to identify their membership in real estate services provided under this mark.
• Certification Mark: A certification mark is used to certify that goods or services provided by a manufacturer or an organization under the certification mark complies with the requirements of the manufacturer or organization and are accredited by that organization. A certification mark may be displayed on the product of the manufacturer as a certification of such compliance with the regulations of an organization. A certification mark is typically owned by an organization and licensed to entities that comply with the owner’s requirements. The Good Housekeeping Seal Of Approval for home products is an example of a certification mark.
• Trade Dress: A trade dress refers to the visual appearance of the product – its packaging or image. It does not refer to words, logos, etc. The Law Lexicon, explains that trade dress is “the non-functional physical detail and design of a product or its packaging, which indicates or identifies the product’s source and distinguishes it from the products of others”.The purpose of trade dress protection is to prevent others from using the same or confusingly similar packaging or design for their products. Like trademarks, trade dress may be registered with the U.S. Patent and Trademark Office. The process for federal registration of a trade dress is similar to that of registration of trademarks and service marks. The application must be filed under the owner’s name under either an actual use application, or an intent to use application. If the application is filed under actual use, an appropriate specimen showing the goods in commerce must be submitted along with the application for registration. The trade dress to be protected must be adequately described in the application. If no conflicting trade dress has been previously registered, the application will be published for opposition. The trade dress will be registered after the opposition period, if no opposition was made within the period. The registration will last for 10 years and may be renewed for successive 10 year periods as long as the trade dress is still being used.
• Word Mark and LOGO: There are three basic ways of applying for a mark. An applicant can apply for a standard character mark, which covers a word or words, in any font, color, size or style, often referred to a word mark. An applicant may also apply for a logo or stylized mark, which only covers that logo in one specific style, position and font. Registration of a logo prevents others from using the similar design. An applicant may also file a mark for a combination of a word mark and a logo.
• DESIGNATION OF TRADEMARKS: The following symbols are used to denote trademarks:
  ™ denotes a mark used in commerce to identify an entity’s goods or services where the mark is not federally registered with the USPTO.? denotes a mark used in commerce to identify an entity’s service where the mark is not federally registered with the US PTO® denotes a federally registered trademark.

A trademark provides two primary rights to the owner of the mark – the right to register the mark, and the right of exclusive use and ownership of the mark for the products or services for which the mark is registered. The right of ownership of a trademark accrues when the mark is first used in commerce. Thus, under common law there is no requirement for the owner of a trademark to register his mark to claim his right to the ownership of the mark.

However, federal registration of the mark in the U.S. PTO has several benefits. Most companies, businesses and even individuals are aware of this fact and registration of one’s trademark has now become a business necessity to protect the brand of the company’s product or service. In fiscal year 2007, the U.S. PTO received 394,368 trademark applications.

Some advantages that federal registration of a mark confers on the owner of the mark are:

• Constructive notice to the public: A registered trademark provides constructive notice to the public of registrant’s ownership of the mark. This means that a third party which uses the registrants mark, with or without knowledge of the registration of the mark will be found by a court to infringe the registered mark and be liable for money damages.
• Legal presumption of ownership of the mark in all 50 states in the US: A registered trademark provides the registrant a legal presumption of the ownership of the mark, and allows the registrant the exclusive right to use of the trademark throughout the United States on goods or services listed in the allowed registration application for the mark. This also means that although the registrant may be using the mark only in a certain state or area of the US, a competitor cannot use the registered mark, or a mark confusingly similar to the registered mark in any other area or state of the US.
• Valuable corporate asset: A trademark is a valuable corporate asset and generally increases the valuation of a company. The brand identity created by the trademark assures the consumer of the quality of the product or service that they are purchasing and implicitly implies that the company will keep its products or services relevant to a changing marketplace. A trademark increases the sales of a company’s product or services. For any company, brand equity is a durable source of cash flow, lower cost of sales, lower cost of capital and higher market valuation. For example, the Coca-Cola® mark is valued in the millions of dollars.
• Increases the marketability and licensing of the mark: Federal registration of a trademark increases the marketability, transferability, sale and licensing of the registered trademark.
• Identifies the availability of a mark in trademark search: A registered trademark is readily identified in a trademark search which decreases the probability of selection of the registered mark or a confusingly similar mark by another entity for use on that entity’s goods or services.
• Provides brand-name recognition of the product or services A federally registered trademark allows the registrant to mark his product with the symbol ®. Federal registration of the mark increases the brand name recognition and visibility of the product or service.
• More easily allows registrant to issue a cease and desist letter A registered trademark makes it easier for the registrant to negotiate with, or stop a third party from infringing the registered trademark.
• Allows the registered mark to become “incontestable” If a trademark has been used for a continuous period of at least five years after the date of registration, the right to use the mark and the registration may become “incontestable”, which limits an attack on the invalidity of the registered mark by a third party and also limits the cancellation of the mark.
• Ability to bring an action concerning the mark in federal court A registered trademark gives the registrant the right to bring an action concerning an unauthorized or infringing use of the mark in Federal Court, for example, sue an infringer of the registered mark in Federal Court. The owner of a common law unregistered trademark may also bring an action in court for an unauthorized or infringing use of the mark within the geographical area within which the mark has been used, or within the geographical areas into which the mark may be reasonably expected to extend or expand.
• Ability to recover lost profits and damages in federal court A registered trademark gives the registrant the right to recover lost profits, damages, court costs and attorney fees under the applicable Federal statute.
• Prevent importation of infringing goods A registered trademark allows the registrant to file the federal registration of the mark with US Customs & Border Protection (CBP) and have infringing foreign goods that are marked with the registered mark, seized or stopped from being imported into the US at each of the 317 ports of entry CBP. The CPB maintains a trademark recordation system for marks registered on the Principal Register including information regarding images of the mark.In October 2005, CBP released the Intellectual Property Rights e-Recordation (IPRR) system, located at https://apps.cpb.gov/e-recordations/. This system allows registrants to electronically file IPR recordation applications, thus significantly reducing the time normally required to process paper applications.
• Prima facie evidence of ownership and validity of registered mark A registered trademark provides the registrant prima facie (i.e., on its face) evidence of the validity of the registered mark and ownership of the mark. In an action in court, the court will assume that the registrant has the exclusive right to use of the mark and the registrant will not have to spend resources and money to prove that the registered mark is the property of the registrant.
• Ability to take criminal action against counterfeiters in federal court A registered trademark allows the registrant to take criminal actionin Federal court under the applicable Federal statute against entities or persons that counterfeit the registered mark.
• Depreciation For federal tax purposes, a federally registered trademark is treated as an asset and allows the mark to be depreciated as an intangible property.
• Allows priority of US registration to be claimed in foreign trademark U.S. registration of a trademark provides a priority date to a later filed foreign trademark application.
• Extends monopoly created by a patent Since trademark rights remain in effect as long as the mark is used and the maintenance fee paid on the mark, a trademark is a powerful tool to extend the initial monopoly created by patenting the product.

Another rationale for growth in registration may be attributed to the globalization and growth of multinational companies, simply because registration in one country may be used as the basis for registration in other countries. A company that wishes to export internationally may accidentally infringe the rights of other trademark owners in foreign countries unless their mark has been previously registered in that country.

International registration of marks may be obtained under the Madrid System of International Registration of Marks through the World Intellectual Property Organization, Geneva, Switzerland. An international application for a trademark under the Madrid System needs to be based upon a previously filed application or registered trademark in the national patent office through which the international application is filed.

Filing an international application under the Madrid System (also referred to as the Madrid Protocol) allows registration and protection of the mark in several countries by the filing of one international application under the Madrid Protocol, thereby reducing the time consuming procedure of filing national applications for the mark in each country where the applicant wishes to register the mark. An international filing of the mark under the Madrid Protocol allows the owner of the mark to make changes to the application, pay filing and other fees and renew the application through one agency instead of following cumbersome administrative procedures in each country that the applicant selects for registration of the mark.

The increase in registration of marks may also be explained by the fact that unregistered marks are inherently at risk. Apart from the obvious reason that the mark may be used by another person for similar goods and services leading to consumer confusion, there is the likelihood of the same person registering the mark before the original mark is registered.

In addition, a trademark owner now has the responsibility to register his mark in order to protect it from potential infringers.

Improper use of trademarks may result in loss of trademark rights granted by federal registration of the mark. Prior to registration of a mark, the owner should use the notation TM after the product, for example Ryan Blankets™, or the symbol SM after a service, for example Pet Grooming ?. After the mark is federally registered, the owner should mark the product with the ® symbol, for example Coca-Cola®, or otherwise indicate that the mark is federally registered, for example, insert the following after the name of the goods or service “Fed. Reg. TM, ”.

Use of the word trademark as a substitute for the goods or service they identify may result in loss of trademark rights. To preclude such loss, the goods or services that the trademark identifies must be entered, immediately after the trademark. For example, if the trademark Acro identifies a brand of soccer shoes, the phrase “Acro® shoes” must be used when the Acro® mark is used to avoid the Acro® mark from becoming generic and synonymous with soccer shoes. Several registered trademark products, for example “aspirin”, “cellophane”, etc., have lost their trademark rights as the trademark has become generic and is now associated with the class of the trademarked product, in this case with an analgesic and transparent tape, respectively.

The U.S. PTO maintains two types of registers for trademarks – the Principal Register and the Supplemental Register. The marks registered on the Principal Register are primarily marks that have been allowed by the U.S. PTO examiner as unique, non-descriptive and not likely to be confused with prior registered marks. Such marks enjoy several benefits such as constructive notice of the registrant’s claim to the ownership of the mark , the right to incontestability after five years of continued use, the exclusive right of the owner to use the mark in commerce in connection with the goods and services, etc.

Marks considered descriptive of the product by the U.S. PTO examiner that are refused registration on the Principal Register may be registered on the Supplemental Register for a period of 5 years to acquire “secondary meaning”. The mark may then be transferred by the applicant to the Principal Register when it is deemed to have become distinctive. The advantage of registration on the Supplemental Register is that the owner will be able to preclude others from registration of the mark in connection with similar goods and services. Also, registration of the mark on the Supplemental Register allows the owner to mark his product or service with the ® symbol, file a foreign application and file an infringement suit in a Federal Court.

U.S. trademark law was initially based on common law, more precisely the law of unfair competition. It was not until 1881 that Congress drafted an act under the Commerce Clause that unified the existing law under a federal statute which was further revised in 1905. At present, the law of trademark registration and procedure is codified in the Lanham Act, enacted by Congress in 1946.

The Lanham Act codifies provisions for registration of trademarks on the Principal Register and the Supplemental Register, trademark infringement, false advertising and trademark dilution. The more recent and updated version of the Act also includes a chapter on the Madrid Protocol and international filing of a trademark.

Appeals taken from a trademark application and other related issues are heard by the Trial and Appeal Board (TTAB) of the U.S. PTO. The TTAB hears and decides cases on trademark opposition and appeals regarding decisions of the trademark examiner’s refusal to register a mark. The TTAB Manual of Procedure is a good guide for those who wish to file an appeal with the TTAB. The decision of the TTAB may be appealed to the United States District Court, or to the United States Court of Appeals for the Federal Circuit