Trademarks help consumers identify and distinguish your products and services in the marketplace. If you don’t protect your trademarks, your rights can be weakened, which may allow for competitive products/services using similar markings, ultimately diminishing the value of your trademarks.
“If you’re a new business or are launching a new product — especially one that’s innovative — it’s important to choose your trademarks wisely,” says Jim Dimitrijevs, a member at McDonald Hopkins LLC, whose practice focuses on Intellectual Property.
“It’s important to consider the inherent strength of a proposed trademark,” adds Grant Monachino, also a member specializing in Intellectual Property at McDonald Hopkins LLC. “It’s equally important that you enforce your trademark rights as the years go by, or you risk losing them.”
Smart Business asked Dimitrijevs and Monachino how companies can best select and protect trademarks.
How does a company go about selecting a trademark?
First you need to consider the product or service itself, as well as its life expectancy. If it’s going to be long lived, an inherently strong trademark will likely be more beneficial over the life of the product or service. If it’s going to be a fleeting fad and you want to ensure quick catch-on, you might select a more basic descriptive name that fits that purpose, but is not necessarily an inherently strong trademark. You also need to consider whether the product is going to be sold outside of the U.S. If so, you’ll need to assess 1) how those markets will perceive the trademark, and 2) whether the trademark is available for use in all the jurisdictions you’re considering.
How can you evaluate the inherent strength of a trademark?
In the initial marketing phases for a new product, it can be beneficial to use a basic, descriptive term, but it won’t be as easy to protect. It is easier to protect words and marks that are more distinctive when used in association with the company’s product or service.
When selecting a trademark, we look at the ‘spectrum of distinctiveness’ in the context in which a proposed trademark will be used. On the weakest end, we have generic terms that are essentially the common name for the product or service (e.g., ‘DVD’ for digital video/versatile discs). Next we have descriptive terms (e.g., Web Analytics Experts for services regarding the analysis of Internet-based statistics), followed by suggestive terms (e.g., Sure for a deodorant). At the stronger end, we have arbitrary terms (e.g., Apple for a computer) and fanciful (invented) terms (e.g., Kodak for film).
In practice, most trademarks are somewhere in the middle range between descriptive and suggestive. However, there can be a lot of long-term benefit in selecting an arbitrary or fanciful mark if you’re introducing something completely new to the market and/or the product/service being introduced will have a long shelf life.
What happens after the company agrees on a proposed trademark?
You check on availability and assess risk. Counsel will evaluate the marks you want to use and consider them against the goods and services you want to link them to, and then have a trademark search conducted. The search will uncover whether any other companies or individuals are already using the same or similar marks for similar goods and services. Counsel will analyze the search results to determine if there are conflicts that could cause consumer confusion, and prepare a legal assessment of risk.
How can a company protect its trademark?
In the U.S., trademark rights accrue with use (i.e., ‘common-law’ rights). You will obtain your best rights, however, by registering your trademark at the federal level. In the U.S., this gives you protection in all 50 states (among other benefits). In most jurisdictions outside the U.S., trademark rights are only protected if a registration is obtained. Thus, you should register your trademarks not only where you sell, but also where you manufacture, especially if you sell or manufacture products abroad.
Trademark rights are somewhat unique in that you need to police them. Although theoretically, you can maintain a trademark registration and the related rights for as long as you use the mark, if you let others use your trademark or something similar without trying to stop them or enforce your rights, you allow your rights to be eroded.
How do you proceed if you think another company is infringing upon your rights?
First, conduct sufficient due diligence to confirm you have superior rights, as well as the nature and scope of your rights.
Once sufficient due diligence has been conducted, consider who the infringer is in crafting your approach to try to resolve the issue. One typical approach is sending a cease and desist letter. Another is filing a court action (in lieu of or in connection with a C&D letter). While sending a letter may achieve a quicker, less expensive result, it may also give the infringer the opportunity to select the forum where the dispute will be resolved (i.e., by filing a declaratory judgment action in a jurisdiction more favorable or convenient to the infringer).
Claims available may include one or more of the following: federal trademark infringement, state trademark infringement, federal or state unfair competition, and/or an action in court or the Trademark Office to challenge the trademark application or registration of the infringer.
If both parties have viable rights, or want to avoid the cost and unpredictability of an action in court or in the Trademark Office, they may decide to resolve the dispute by a coexistence agreement that allows both parties to use their marks in ways that avoid consumer confusion.
JIM DIMITRIJEVS and GRANT MONACHINO are members at McDonald Hopkins LLC, both specializing in Intellectual Property. Reach Dimitrijevs at (216) 348-5774. Reach Monachino at (216) 430-2003.