Here at Winstead, we are fortunate enough to have two lawyers that were selected for inclusion in The Best Lawyers in America® 2018 in Trademark Law, Stan Moore and Cathryn Berryman. Before answering the question What are Trademarks?, I thought it would be a good idea to get their insights on trademark best practices.
Stan Moore: Most businesses have trademark issues, whether they know it or not. With trademarks, ignorance is not bliss. Businesses can lose their hard-earned goodwill based solely on inaction–either failing to protect their own trademarks or inadvertently using someone else’s trademarks. A little effort upfront can save you years of heartache.
Cathryn Berryman: When starting a new company or releasing a new product, why pick a name that is going to cause you problems down the road? The time to pick a good name is at the outset, before any marketing dollars have been spent. You would be surprised how many times clients fall in love with a name and fail to heed our advice when we recommend against using that name–even though they had not yet spent any money on advertising. More often than not, it ends up costing the client a lot more money to protect the name, money that could have been saved if they would have picked a better trademark at the outset.
So, if this is something every business needs to address, what exactly are trademarks and what makes for good ones? Put simply, trademarks are source identifiers. They can be any combination of words, phrases, symbols, or designs, that identify the source of goods or services and distinguish those goods or services from others. When choosing a name for a new business or a new product, the goal should be to select a strong trademark, i.e., one that is highly distinctive. Not only are strong trademarks easier to register, they are also easier to enforce.
The strongest trademarks are fanciful or made-up words invented by the owner to be used as a trademark, such as Starbucks®, Altoids®, and Polaroid®. The next strongest trademarks are arbitrary trademarks, which are real words that are completely unrelated to the product or service they represent. A good example is the use of the common word “Apple” for computers.
On the opposite end of the distinctiveness / descriptiveness continuum, the weakest trademarks are generic terms or common names of products and services, which are never registerable and nearly impossible to enforce. For example, “apple” cannot be registered for apples (the fruit). Marketing budgets would be wasted trying to promote a generic term and years of continuous use would result in little, if any, value being created.
In the middle of the continuum are trademarks that are either suggestive or descriptive of the products or services they represent. In general, suggestive trademarks are registerable and enforceable, while trademarks that are merely descriptive are not. A descriptive mark is one that describes the intended purpose, function, or use of the goods. Suggestive marks suggest, but do not describe, the qualities or characteristics of a product . The Ford Explorer® SUV is a great example because it suggests what the owner may do with the vehicle without being descriptive.
However, a word of caution–be careful when choosing a suggestive mark because if it is too suggestive, it will be considered descriptive. Descriptive terms may not be enforced as trademarks absent proof of acquired distinctiveness. To acquire distinctiveness, a trademark owner must show that, after years of usage and marketing, consumers recognize the name and associate it exclusively with the products or services it represents.
Before adopting a proposed trademark, a search should be conducted to ensure there is no likelihood of confusion between the proposed trademark and any trademarks already used by others. It should be noted that the trademarks do not have to be identical to be considered confusingly similar. For example, trademarks that are phonetically equivalent, are visually similar, produce the same meaning or create the same general impression in the mind of a consumer might be confusingly similar. Even if two marks are similar, a likelihood of confusion will exist only if the two marks cover commercially related goods or services.
Finally, trademark owners should constantly police their marks. If unauthorized uses of a mark go unchecked, the trademark becomes diluted and loses its distinctiveness. Also, if the trademark becomes so famous that it begins to be used to refer to the actual product, the mark may become generic and, thus, unenforceable. Xerox has been battling against this problem for decades. The Xerox® photocopier was such a revolutionary product, it became a victim of its own success–the trademark itself started to become a noun to describe photocopiers, generally.
In summary, a strong trademark is vital to the brand building process. The ability to protect your mark should inform trademark selection. The difficulty for the new brand owner is to determine where a given mark lands on the continuum. The further along the continuum one moves, the less the mark will protect the brand. Adoption and use of weak trademarks leads to problems that many owners may never overcome. First, registration is difficult, if not impossible. Second, even if a registration is obtained, enforceability is less certain. These are costly yet easily avoidable risks.