by Intellectual Property Attorney Bill Honaker, the IP Guy
Trademarks are critical to business success. They represent your brand. They identify your business and symbolize your great products, services, and reputation.
You want to choose great trademarks so that competitors cannot adopt similar marks that can confuse customers and feed off your goodwill. You also want to choose great trademarks so that you don’t face a lawsuit for getting to close to another’s trademark. The important lesson is you must choose wisely. It reminds me of the scene in Indiana Jones and the Last Crusade, where the Grail Knight says: “You must choose, but choose wisely”.
A recent Federal Court filing illustrates the hazards of not choosing wisely. A real estate company was sued for use of their name. They had selected and used the name for over eight years before the lawsuit. They are now faced with defending their business name or picking a new name. Both options are enormously expensive and a major distraction for the business. Whether they are right or wrong is not the important lesson.
Two Questions to Answer
Can you protect your trademark?
There are two questions to answer when choosing a trademark or brand. First, can it be protected and second, is it clear? A strong mark can prevent competitors from adopting similar trademarks that confuse customers.
To say it differently, if the mark is weak others can adopt a mark that is close to the one selected and ride on your business’s success. If the business is successful, others will want to take unfair advantage of that success. They will adopt trademarks that are close to yours so that they can confuse consumers into believing that they are somehow associated with you. This can result in numerous problems for your business including lost sales, lower profits and damaged reputation due to the actions of others.
Trademark strength ranges from the strongest, i.e. fanciful trademarks (Exxon) to somewhat weaker i.e. arbitrary (Apple) to suggestive (Airbus) and finally, the weakest i.e. descriptive trademarks (Sharp for televisions). Generic words, like clock for clocks cannot be protected as trademarks. The stronger the trademark the easier it is to protect from others. It is difficult to argue that a decision to select the same strong trademark was inadvertent.
Is your trademark clear?
The only way to determine whether you are free to use a trademark is to have a search done to locate any confusingly similar uses. To determine whether trademarks are confusingly similar, you have to look at the similarity between 1) the marks and 2) the goods or services. The general test applied by the courts is whether the consumer will be confused. It is okay to have a trademark that is the same, similar or closely related to another’s trademark if the goods and services are sufficiently different so that the consuming public will not be confused.
For example, most people recognize Apple as the company making and selling computers, phones, etc. and in the music business, i.e. iTunes. Some music lovers will also recognize Apple in connection with Apple Records. Both of these marks existed for many years without any problems because their goods and services did not overlap. In the beginning, Apple was involved with computers and Apple Records was in the music business. They could exist without issue. When Apple moved into the music business, iTunes, there was an overlap and litigation between the two continued for decades.
What is the best way to choose your mark?
The best approach is to pick a number of options for trademarks and have them reviewed by trademark counsel. He or she can help a business understand the weak and strong marks and perform a preliminary low-cost clearance search to uncover any clear problems. Once the list is narrowed, you can select your best choice(s) and have it fully searched for any possible clearance issues.
A full search will uncover not only registered trademarks but also common law trademarks, trademarks that are being used but have not been registered. These are very complete comprehensive searches. Trademark counsel will review the search results and render an opinion as to both strength and availability. Only then can a business be confident in its trademark and grow its brand within its business.
Trademarks are one of a business’s most valuable assets. It is the brand. It is how customers will find and remember you. It symbolizes everything that is great about your business. It will grow in value as your business grows. It also provides flexibility on how your business grows. A good strong well recognized trademark can open the door to later licensing opportunities, product expansion and franchising capabilities. Your trademark(s) are a major asset.
You must be careful. You don’t want the Grail Knight to utter: “He chose . . . poorly.”
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.