Growing up in southwest Yonkers, I witnessed first-hand the mistakes made by first-generation business owners. My grandfather ran a grocery store, and as an attorney I now see how vulnerable his business was. He simply didn’t have the experience or knowledge to take certain steps that were critical to protecting his business and family.
Today, I work with business owners across all sectors, from independent retailers to franchise owners and commercial property owners. Many of my clients are self-made, hard-working people dedicated to improving their families’ lives and contributing to their communities. They are living the American dream, and it’s gratifying for me to be able to help them.
But they also tend to make a handful of mistakes related to their brand and intellectual property, which can easily be avoided. Here are five things all business owners should know:
1. What is a Trademark?
Trademarks protect words, symbols, sounds, smells, and colors that identify and distinguish the goods and services of your company from those of another company. You are not required to register your trademark with the U.S. Patent and Trademark Office. But, if you do, you can obtain substantial benefit from it.
2. Trademark protection is not linked to your business name.
Incorporating a business does nothing to establish trademark rights. It merely prevents other potential businesses in your state from incorporating the same name.
3. Trademark registrations never expire.
As long as you renew it and continue to use it, your registered trademark will last forever. The oldest registered U.S. trademark, SAMSON with a depiction of a man fighting a lion, registered in 1884 for use with rope.
4. Trademarks are affordable.
Trademark registrations are not just for huge companies with billions of dollars in revenue. In fact, registrations are very affordable in the grand scheme of things. It can cost you as little as $225 to obtain a registration, plus attorney’s fees.
5. Ignoring Trademarks can be expensive.
A critical part of branding is selecting the right company name and logo. Business owners need to be sure that their company name and logo are not infringing on someone else’s trademark. Failing to perform a search of existing trademarks before selecting your name and logo can lead to infringement lawsuits and the expensive cost of rebranding.
Let’s expand a bit on those five basic points, and take a look at the benefits of registering a trademark, and what that protection provides:
- Constructive notice to the public that you claim ownership of the trademark;
- A legal presumption of your ownership of the trademark and the exclusive right to use the trademark nationwide;
- The ability to bring a lawsuit to enforce the trademark in federal court;
- A stepping stone to obtain trademark registration in foreign countries; and
- Filing your trademark with the U.S. Customs Service to prevent the importation of foreign goods that infringe upon your trademark.
It’s important to take the proper foundational steps to create or register your trademark. Those steps include:
- Pick a Good Name: Select something that is distinctive. Avoid descriptive or generic terms (High Quality Apparel), surnames (Gonzalez Bakery), and acronyms (ACT Towing). Try to invent a name, like Google or Kodak. These words tend to be very distinctive, and are generally the strongest trademarks.
- Perform a Trademark Search: Prior to investing resources into your new brand name, at a minimum perform a preliminary “knockout” search to clear it for use. A search can help avoid expensive infringement suits or the cost of having to rebrand your product or service after an earlier trademark owner sends you a cease and desist letter.
Trademark searches are also important because failing to conduct one prior to adopting a mark can constitute evidence of bad faith in an infringement lawsuit, which can lead to increased damages. Spending the time and money up front to determine if a trademark is available can help avoid these unnecessary costs.
- Move Quickly: Obtaining a trademark registration requires actual use of the trademark in commerce, but you don’t need to invest significant resources into a brand or even use the mark in commerce before you apply for a trademark registration. You can file an “Intent-to-Use” application to preserve your rights in a mark that you plan to use in the future. An Intent-to-Use application provides at least three important benefits.
First, you can determine if the USPTO will register your trademark without spending significant resources launching the brand. If the USPTO rejects the application, you can simply choose a different name or logo. Second, if a third party is already using a similar mark, you can avoid a potential claim of trademark infringement because you are not yet using the mark in commerce. Third, assuming your trademark is registered, the date you file the Intent-to-Use application will serve as the date of your first use of the trademark. This date can be very important if your trademark is ever challenged by the owner of a competing mark.
- Be Careful: Statements you make in a trademark application have to be truthful. Willfully false statements can be punishable by fine or imprisonment. False statements can also jeopardize your application, and even result in a cancellation of your registration after it is issued.
- Think Globally: Trademarks are registered and enforced by individual countries. So, if you intend to expand into foreign markets, you will need international trademark protection. You can use the international agreements (such as the Madrid Protocol) to obtain international recognition of your intellectual property rights. Under the Madrid Protocol, you can register your trademark in about 100 countries with a single application.
Next time, we’ll take a deeper look at the issues involved in international trademark protection. Meanwhile, visit my Facebook page “Trademark Tales,” Twitter feed, Instagram feed and LinkedIn for more thoughts on trademarks and other areas of the law.
Adam Rodriguez has a decade of litigation and transactional experience. Before joining Bleakley Platt, he was the Director of Real Estate for Westchester County, as well as an Associate County Attorney working on a number of high-profile cases. He also previously practiced intellectual property litigation at Morgan & Finnegan, LLP. See his profile page for more.