Business Owners Beware: Trademark Traps

Originally Posted June 28, 2021
Updated September 29, 2022

IP rights have never been more valuable. A well-managed IP portfolio can be worth one third or more of the total value of your business. Unfortunately, most businesses treat IP as an afterthought. Even if you don’t, you can still lose valuable rights by falling into one of these traps.

Over three consecutive posts, I will discuss traps for patents, trademarks and copyrights.


Your trademarks can be the most valuable IP you own. Great care should be taken when choosing trademarks and care has to be taken to keep their value.

First, you should register your trademarks with the United States Trademark Office.

There are many advantages to having a federally registered trademark:

  • Your trademark is presumed to be valid, which gives you an important advantage in court.
  • It’s considered valid throughout the U.S. Instead of being limited to the geographic area of use under common law, use is conferred throughout the entire country.
  • After five years your mark can become incontestable. Basically, incontestability shields the mark against challenges to validity based upon descriptiveness.
  • Federal registration allows use of “®” to identify the mark as a registered mark. The “®” is recognized by most as a symbol of your ownership.
  • The federal courts have jurisdiction over disputes involving federal registered trademarks.
  • Your registration protects itself. The mark is easy to find when others are considering choosing a mark. It is publicly shown on the USTPO website. A quick search will lead most sophisticated businesses to your mark, and they will likely pick a different one. Few businesses want to pick a trademark that will just get them into litigation.

Second, you should police your trademark. Anyone using your trademark or a similar mark that causes confusion with consumers is trademark infringement. If you let this happen, it weakens your trademark. Consumers will think that they are buying from you when in fact they are buying from the infringer. Policing your trademark will inform you of others and many times, a letter requesting they stop will be effective.

Third, you have to use your trademark as an adjective, never a noun or verb. Cellophane was once a valuable US trademark. It was used improperly and lost because it became a generic term for plastic wrap. To use as an adjective, it would be Cellophane plastic wrap. But it was used improperly as a noun, wrap it in cellophane or a verb, I cellophaned the left overs.

Trademark Traps

I speak regularly to business owners about intellectual property, and in preparing these talks, I review their trademarks. In an average group I always have at least a few participants who have lost their trademark. Most of the lost registrations are extremely valuable, and their loss is a total surprise to the owners.

Federally registered trademarks have two important deadlines. The first is between the fifth and six year after a trademark is issued. You must file an affidavit stating you are using your trademark and submit a sample of how it is being used. The rules for showing use are complicated. If you miss this date or fail to follow these rules, your trademark is canceled.

The second trap occurs every 10 years after a trademark is issued. Every 10 years you must repeat the renewal process, or your trademark will be canceled. Business advisors should check with clients and ask about these anniversaries.

The Takeaway

Trademarks are very valuable. Register them, use them properly, and police them.  They also have to be used and that use proven. Make sure that you use your trademarks and keep evidence of the use. Lastly, calendar a reminder of all critical dates of your trademarks so you don’t miss important renewal dates at the United Trademark Office.

Bill Honaker
By Bill Honaker

About the Author:

Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, Invisible Assets – How to Maximize the Hidden Value in Your Business. To download a sample chapter, click here.

To get answers to your questions click here. To schedule a time to talk, you can access my calendar by clicking here, email, or call me at 248-433-7381.


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