How to Choose Strong, Valuable Trademarks

“The greatest victory is that which requires no battle.” ― Sun Tzu, The Art of War

Sun Tzu, the Chinese military general, strategist, philosopher, and writer died in 496 BC, but his advice from more than 1500 years ago is still great trademark advice. In the battle to protect your trademark, “the greatest victory” is choosing a strong trademark. A strong trademark is easier to protect and will grow in value as your business grows.

Trademarks, also referred to as your brands, are the legal protection for your business reputation. They’re the focus of your marketing efforts, they’re what consumers use to identify you and refer new business to you, and they’re one of, if not the most valuable asset in your business. They’re analogous to your own personal reputation.

I’ve been involved in the sale of several businesses. In each of these transactions, the purchasers wanted the trademark. It symbolized the goodwill of the business. It alone can increase the multiples that a buyers are willing to pay.

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.”

How to Choose Wisely

There are two main questions when choosing a trademark.

  1. Can you protect your trademark?
  2. Is your trademark clear?

The strongest trademarks are made-up words or coined marks. They are easier to protect and are likely to be clear because they’re made up.

The ultimate decision on the best trademark should be made with the advice of trademark counsel, someone who regularly practices trademark law. But there are some steps you do on your own.

Choose a Strong Trademark

Trademark strength is determined on a scale of weak to strong.

Trademark Strength

It’s important to note that weak marks can become strong over time through use, but it is best to start with a strong mark.

A strong mark that identifies and distinguishes your business is more valuable, and they have a self-policing aspect. It is hard for others to argue they innocently selected their mark when yours is not descriptive or suggestive.

On this scale from left to right are the following categories of trademarks:

  • Generic marks are common words for common things and cannot be trademarked.
  • Descriptive marks describe a function, feature of the product or service.
  • Suggestive marks suggest a function, feature of the product or service.
  • Arbitrary marks are common words used in an uncommon way.
  • Coined marks are made up of words that have no meaning.

Of these categories, arbitrary and coined terms are the strongest, easiest to protect and likely available. Trynex® is a great example. It’s a coined term. To this day, no one has attempted to get close to it, because it’s coined. There’s no good argument as to why someone needed to get close to the mark, other than attempting to confuse consumers. Therefore, no resources were required to stop infringers. The battle was won before it started.

Do a Preliminary Search

“There is no instance of a nation benefitting from prolonged warfare.”  ― Sun Tzu, The Art of War

This is true for businesses as well. You don’t want to pick a trademark that will result in a lawsuit.

Make a list of your favorite choices. Then search them on a search engine such as Google to see if anyone else is using the marks. You’re looking for others who are using a similar mark for similar goods and services.

The main question is whether your mark is likely to cause confusion with consumers. Will consumers believe that you are somehow associated with the existing trademark.

Trademark infringement is the unauthorized use of a trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.

You don’t want to choose a mark that is confusingly similar to another trademark. You don’t want to subject yourself to unnecessary fights over your right to use your trademarks.

Likelihood of confusion is evaluated using a seven-factor test:

  1. the strength of the trademark allegedly infringed
  2. the similarity of the parties’ marks
  3. the similarity of the parties’ goods
  4. the similarity of the parties’ sales channels, distribution, and customers
  5. the similarity of advertising media
  6. defendant’s intent, and
  7. actual confusion

You should also search the United States Patent and Trademark Office. The USPTO maintains a record of all trademarks that have been filed, and their status. It is called TESS, the Trademark Electronic Search System. I have a video on how to do a preliminary search here. Remember you’re only doing a preliminary search. Whether a trademark is available is a tricky question and you should always get the advice of trademark counsel.

Get Legal Advice

Once you’ve culled your list down to the best possible marks, contact a trademark attorney for a complete search. Trademark counsel has access to sophisticated search software that will provide detailed results. Trademark counsel will conduct the search and render an opinion on the strength, availability for use and likelihood of getting registration.

There’s great risk in doing this yourself. Some people think they can do it themselves; some people also think they can take out their own appendix. This is a job for experts. I recently talked with a company that had picked its own trademark and used it for several years. They were sued by a large international firm for trademark infringement. They either had to fight, or change their name. They were between the proverbial rock and a hard place. If they had sought expert advice, they would have been made aware of the risk and not chosen that name. They elected to change their name resulting is great damage to their reputation and business value. As the Grail Knight said, “They chose poorly.” The cost of legal advice is nominal when compared to the value of trademarks.

Federal Trademark Registration

Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.”  ― Sun Tzu, The Art of War

Once you have your trademark, file for federal trademark registration. See part 2 of this series for more detailed information.

There are numerous advantages to federal registration:

  • Your trademark is presumed to be valid, which gives you an important advantage in court.
  • It’s considered valid throughout the United States, instead of being limited to the geographic area of use under common law.
  • After five years your mark can become incontestable. Basically, incontestability shields the mark against challenges to the validity of the mark based upon descriptiveness.
  • A federal registration allows the use of ® to identify the mark as a registered mark. Most people recognize the ® 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 USPTO website.

The Takeaway

“The wise warrior avoids the battle.”  ― Sun Tzu, The Art of War

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, and well well-recognized trademark can open the door to later licensing opportunities, product expansion and franchising capabilities. Your trademark(s) are a major asset.

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 too close to another’s trademark.

Take care in choosing wisely. Although you can do some of the work on your own, you shouldn’t do it all. The return on investment in having legal assistance will be enormous. The potential loss of your trademark will be devastating in comparison.

Trademarks can last forever if you maintain them. Next week, in part 4 of this series, I will talk about how to maintain your valuable trademarks.

 

Bill Honaker, The IP Guy

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 Bill@IPGuy.com, or call me at 248-433-7381.

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