Business is as competitive as it’s ever
been, and trademarks can help a company get that extra edge. Trademarks promote a brand with which consumers
can identify.
Companies that propose new trademarks
must follow a certain process in order to
eliminate or reduce the chances of litigation,
says Tom Hodge, a shareholder in the
Atlanta office of Baker Donelson who concentrates his practice in the areas of patent,
trademark, copyright, trade secret and
unfair competition law and related litigation.
Smart Business spoke with Hodge about
the steps companies need to take in establishing a trademark and the potential consequences of not doing their homework.
A company comes to you with a proposed
trademark. What happens next?
When a company wants to adopt and use
a trademark in connection with certain
goods — or a service mark in connection
with certain services — and then register
that trademark in the U.S Patent and
Trademark Office, I often ask about the
process the company used to select that
trademark. That process may be important
in regard to a willfulness claim in an action
for trademark infringement.
A fundamental concept is that a trademark refers to or indicates the source of
goods. While you may not know the specific source, the trademark functions to indicate the source.
A trademark is also an indicator of a level
of quality for the goods produced under that
trademark. For example, when you see the
McDonald’s trademark, you have a good
idea of the quality you are going to receive.
How can a company make sure no one else
is using its proposed trademark?
We always recommend a full search before
a company begins use of a trademark.
A first option is to use the U.S. Patent and
Trademark Office Web site and do a limited
computer search. That type of search is
quick but limited and not reliable. However,
that type of computer search may determine
if your proposed trademark is already being
used by others for their goods.
A second option is to have a full search
conducted by a professional search firm —
it’s usually about $450 to $500 for the search
itself. This is a more thorough search
because it looks at many sources such as
U.S. and state trademark databases, trade
journals, domain names, telephone directories, etc. A professional search, however, is
still not 100 percent.
The issue is whether the proposed trademark is likely to be confused with the trademark of another company for similar goods.
A risk can be low, medium or high. For
example, to use the Kodak trademark for
any goods would be a high risk, which we
would not recommend.
What is the filing procedure for registration
of a trademark?
There are two types of applications for
registration of a trademark in the U.S
Patent and Trademark Office, both of
which can be filed in paper form or online
in electronic form.
The first type of application is the ‘use-based’ application, which states that the
trademark is already in use in interstate
commerce in connection with the goods.
The second type of application is the ‘intent-to-use’ application, which states that the
applicant has a bona fide intention — or
good faith intention — to use the trademark
in the future in interstate commerce in connection with the goods.
Both types of applications are subject to
examination at the U.S. Patent and
Trademark Office and, if approved, are
then published for opposition by other
entities, which may allege that they will be
‘damaged’ by the registration. After the
opposition period, or after any opposition
is concluded in favor of the applicant, the
registration is issued for the ‘use-based’
application. The registration for the ‘intent-to-use’ application will not issue until the
trademark is used in interstate commerce
in connection with the goods. There is a
maximum period of three years after publication for use of the trademark in an
‘intent-to-use’ application. During that period of three years, the applicant must periodically inform the U.S. Patent and
Trademark Office of the steps that are
being taken to begin use of the mark.
Without use in that three-year period, the
application is deemed abandoned.
What are the penalties for misusing a
trademark?
You can be sued for trademark infringement, unfair competition and for violation
of other federal or state laws. Specifically,
a lawsuit can seek damages and an injunction. The damages could be significant if
any infringement is determined by a court
to be willful and intentional. If granted by a
court, an injunction could stop all manufacture and sales of the goods and could
require a company to recall unsold goods.
In the U.S., generally, the first user of the
trademark in connection with the same or
similar goods has priority over the first
applicant for registration of that trademark
for use with the same or similar goods.
However, registration of a trademark provides certain rights that nonregistration —
or common law use — does not. <<
TOM HODGE is a shareholder in the Atlanta office of Baker, Donelson, Bearman, Caldwell & Berkowitz. Reach him at (678) 406-8706.
