Trademarks

The following trademark topics are discussed below:

1. What is a Trademark
2. Why You May Want a Federally Registered Trademark?
3. Is Your Proposed Mark Trademarkable?
4. Our Preferred Process in Applying for a Trademark

I. What is a Trademark

A trademark is a mark which is used in commercial trade to indicate the source of goods and/or services from the goods and services provided by others.  A trademark is essentially a “marketing shortcut” in the sense that once a well recognized mark is seen or heard the association in the consumer is instant.

Technically a “trademark” is for identifying the source of goods and a “servicemark” is used for identifying the source of services, but in common practice the term “trademark” is often used to mean either a technical trademark or a technical servicemark.  The terms, “mark” and “trademark” are also often used interchangeably.

The mark itself may be a word, symbol, graphic, or “device,” or a combination of such.  In many instances, the term “trademark” is the legal consequence of a “brand.”  For example, Nike® is not only a very well-known brand but also a federally registered and protected trademark.

In the United States a trademark arises simply by using the mark in commercial trade.  Thus, whether one registers the mark or not, using the mark in commercial trade may create at the very least some common law trademark rights.  Such common law trademarks are supposed to be identified by the “TM” symbol, often as a superscript in the case of technical trademarks and the “SM” symbol, again often used as superscript in the case of a technical servicemark.  Many common law trademarks may also be unregistered trademarks or at least unregistered federally.

But common law trademarks may be registered in a given state where the mark is actually used in commerce.

However, common law trademarks may have varying strengths and you may not know the strength or weakness of your common law trademark until it is tested in litigation.  There are many benefits to be gained by federally registering a trademark, as opposed to relying upon an unregistered common law trademark.  A primary benefit to federal registration is the possible availability of statutory damages in a trademark infringement case under the Lanham Act.  Whereas, with litigating common law trademarks there are generally no statutory damages and thus establishing actual damages can be very problematic to the point where in many cases the only remedy available may be injunctive relief, i.e. an injunction from a judge ordering the other party to cease use of a mark in question.

Generally speaking, a trademark may be registered under one of two different legal paradigms, i.e. registering federally or registering within a given state.  Such registration paradigms are not mutually exclusive, i.e. it is possible to register a mark both federally and in a given state.  However, if the good or service is sold across state lines it generally makes more sense to federally register the mark.  It is generally only with a good or service that is strictly local and entirely contained within a single state that it may make sense to register the mark within that particular state.

Federally registered trademarks are identified by the “R” within a circle, i.e. the ® symbol, which also is often used as a superscript and sometimes as subscript following the mark.  One may only use the ® symbol in connection with the commercial use of goods and/or services listed in the federal registration.  For example, if your federal trademark registration application disclosed your mark associated with only the selling of clothing apparel then you may not use the ® symbol in association with selling beverages.  Also one may only use the ® symbol if the USPTO (United States Patent and Trademark Office) has registered the mark and NOT while your registration application is pending with the USPTO.  But once the mark is registered, you absolutely do want to use the mark in commerce in connection with the goods and/or services listed in the federal registration, as this puts the world on notice of your federally registered mark and may make available statutory damages in the event of trademark infringement.

Lastly, as a point of curiosity, another consequence of a trademark existing because of use in commercial use, is that a trademark may exist in perpetuity, at least in theory, as long as the mark is continued to be used in commercial trade and as long as the mark does not become so popular so as to become a generic term for the good or service, then the trademark may continue to exist with no end in sight.  In comparison patents have a fixed term, as do copyrights.

II. Why You May Want One or More Federally Registered Trademarks

Here are some of the benefits of successfully registering a trademark upon the federal “Principal Register”:

• The right to use the federal registration symbol ® in association with your registered mark;
• Public notice of your claim of ownership of the mark;
• A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration;
• The ability to bring an action concerning the mark in federal court (e.g. a trademark infringement case);
• The use of the U.S. registration as a basis to obtain registration in foreign countries;
• The ability to record the trademark registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods; and
• Listing of your trademark in the United States Patent and Trademark Office’s (USPTO) online databases.

Additionally, having your mark federally registered on the Principal Register consecutively and exclusively for five years ay result in your mark becoming “incontestable,” and thus in any trademark actions the validity of your mark may not be challenged.

With respect to trademark infringement actions, the ability to go after an alleged infringer can be a powerful deterrent.  Consider these two examples of trademark damages.  Skydive Arizona was awarded $2.5 million in actual damages for trademark infringement, $2,500,004 in lost profits for the infringement, and $600,000 in statutory damages for cybersquatting.  Skydive Arizona, Inc. v. Quattrocchi, No. 10-16099 (9th Cir. Mar. 12, 2012).  Or in Gucci v. Guess, Gucci was awarded $4,613,478 in trademark related damages.  Gucci v. Guess, 2012 U.S. Dist. LEXIS 70833 (S.D.N.Y. May 21, 2012).  With damages awards commonly in the seven and six figure ranges, trademark infringement is not something to be taken lightly and by itself may justify federally registering your mark.

Having a federally registered mark upon the Principal Register provides you with serious legal teeth in having recourse if others attempt to ride the coattails of your hard earned goodwill.  For example, in addition to trademark infringement actions (which is grounded in the consumer being confused by an infringing mark), you may be able to bring other trademark related actions such as “dilution” actions – which are non-confusion based actions.  See §43(c) of the Lanham Act.  For example, dilution generally may encompass “tarnishment” and “blurring.”

“Tarnishment” may occur when there is a negative association arising from the similarity between a junior mark (later in time mark) and a famous mark (senior mark) that harms the reputation of the famous mark.  For example, if you are Toys R Us, you may not be happy if a company operates under the name, “Sex Toys R Us” as Toys R Us would argue such a name tarnishes their hard earned trademark.  The actual case was, Toys R Us v. Akkaoui who was operating under the name, “AdultsAreUs.”

Whereas with “blurring” there is an association arising from the similarity between a junior mark and a famous mark that impairs the distinctiveness of the famous mark, i.e. consumers have to think harder if the famous mark becomes associated with more than one producer of the goods and/or services in question.  With blurring there may be an increased search cost to the consumer for the consumer to determine which source goods and/or services the consumer is actually looking for because of the blurring.  When blurring is allowed to go on unchecked a mark may become generic and loose protection.

III.  Is Your Proposed Mark Trademarkable?

Having made the determination that you may want or need a federally registered trademark, you may want to understand some of the rules regarding whether your proposed mark may be trademarkable or whether you may run into trouble with the USPTO examining trademark attorney.  While there are several critical rules and many nuances, we will touch upon only these considerations: (1) first in time; (2) likelihood of confusion (LOC); (3) inherent descriptiveness; and (4) problems in describing your goods and/or services.

First in Time
In order to successfully register your mark, you must be the first user of your mark, with respect to your good and/or services.  To determine this, you conduct a search of the USPTO trademark databases.  However, there are some limitations with searching the USPTO trademark databases.  For one, you need to know how to conduct a proper search.  Second, you need to be aware of inherent limitations, such as there is a lag time between when an applicant submits an application and when that application is published and thus searchable.

Note, two different mark owners may register the same mark, if there is no overlap with respect to goods and/or services.  For example, consider the word mark “Lexel.”  One mark owner owns Lexel® with respect to solid state lighting.  Whereas, a different mark owner owns Lexel® with respect to computer software products and information systems as well as some others.  Same registered mark, but from two completely different companies, with two completely different products associated with the mark.  And such a result is completely fine with the USPTO.

Likelihood of Confusion (LOC)
A likelihood confusion (LOS) is the sine qua non of a trademark action case, i.e. without LOC there can be no trademark infringement.  And thus when attempting to register your mark, the USPTO examining attorney will conduct a search of the USPTO trademark databases to determine if there are existing marks which may be confusingly similar to your mark.

If the USPTO examining attorney finds one or more marks which in the examiner’s opinion are confusingly similar to your mark, then you will receive a refusal in an Office Action regarding your registration application.

You will then have the opportunity to respond to this LOC refusal.  If the examiner agrees with your counter argument, i.e. the examiner finds your counter argument persuasive then the LOC refusal is withdrawn; whereas if the examiner finds your counter argument non-persuasive then the LOC refusal is made final.  You may also appeal the examiner’s decision once a refusal has been made final.

In any event, one way to deal with LOC refusals, is to conduct a proper search before filing your trademark registration application, which can clue you in to potential LOC problems.  But as noted above, there are some limitations to searching.

Also, pay very close attention to the type of mark that might be asserted against your mark and the goods and/or services associated with the mark being used against you.

For example, if your mark is a word mark with graphic and the mark being used against you is also a word mark with graphic, you can often make successful arguments that a consumer is not likely to be confused by the two graphics, especially the more different the two graphic images might be.  Additionally, this type of argument is often bolstered if the goods and/or services associated with your mark are different from the goods and/or services associated with the mark being used against you.

Inherent Descriptiveness
Another potential problem your mark may run into is in how descriptive your mark is relative to your goods and/or services you have associated with your mark.  Also, note this problem may exist with or without a LOC problem, i.e. inherent descriptiveness and LOC are unrelated issues.

When one speaks of trademark descriptiveness, we often speak in terms of the “Abercrombie Spectrum of Distinctiveness,” where at one end of the spectrum are marks that are inherently descriptive (and non-distinct) and at the other end of the spectrum are marks that are arbitrary or fanciful (which are distinct).  In between these polar opposites are marks of varying degrees of suggestiveness and descriptiveness.  The basic rule for a mark to be federally registered on the Principal Register is this:  Marks which are fanciful or arbitrary may be registered; and marks which are inherently descriptive are not permitted to be registered.  Marks that fall between those polar opposites we argue about.

A quick aside, marks which have become “generic,” are never protectable.  This can be a bit ironic, because if you are so good as to dominate a market your extremely valuable mark runs the risk of becoming generic which may occur when users (e.g. the public) begins using your mark to describe all the goods and/or services in your space, irrespective of supplier.  For example, if you pay attention to Johnson & Johnson commercials for Band-Aids®, you’ll note they go out of their way to refer to Band-Aids® as their brand, because they know full well that the public by and large may refer to any small adhesive bandage as a “band-aid.”  Other examples of overly successful marks running into generic problems are Q-Tips, Xerox, and Aspirin.

Whether a given mark is arbitrary, fanciful, suggestive, descriptive, or inherently descriptive is relative the goods and/or services associated with the given mark.  For example consider the mark, “Apple.”  If the goods associated with the Apple® mark are consumer electronic devices, such as iphones® and ipads®, then the mark of Apple is pretty much arbitrary with respect to such goods.  However, if the goods associated with the Apple mark are literally apples of the fruit variety, then the mark Apple is very descriptive of the goods, perhaps even inherently descriptive and thus not a mark which may be registered on the Principal Register.  Another example, consider Exxon® the petroleum company, whose mark is completely fanciful, i.e. it was an intentionally derived mark which has no known meaning in any known human language.

The more descriptive a mark is of the associated goods and/or services the less likely the mark will be able to be registered on the Principal Register.  Many entrepreneurs, business owners, and inventors are often not aware of this important rule.  Because from a business perspective, it often makes good sense to come up with a brand name which is, to some extent, descriptive of your goods and/or services, as this helps your customer/clients to find you and understand what it is you are offering, particularly when you are a newer business with little to no brand recognition.

When you do have a mark which might be considered too descriptive of your goods and/or services, there is at least one useful strategy for getting registered on the Principal Register.  Under this strategy, one first registers on the “Supplemental Register” and then after five years of being continually and exclusively listed upon the Supplemental Register, you may then apply for registration upon the Principal Register, even with a descriptive mark, if you can show your mark has gained “secondary meaning” within the market, i.e. the mark by being used in commerce has acquired distinctiveness.  To get registered in the Supplemental Register your mark must be in commercial use, i.e. there are no “Intent to Use” applications for registering in the Supplemental Register, like there is with the Principal Register.

Benefits of Registering upon the Supplemental Register
Below are some of the benefits of registering your mark on the Supplemental Register:

• The right to use ® symbol with your mark.
• A USPTO examiner may cite your mark against future applications of confusingly similar marks for registration on either register.  This helps you because the examiner may use your mark to prohibit the registration of any confusingly similar marks, which may then further protect your mark.
• The ability to register your mark in countries that offer reciprocal trademark rights.
• Your registered mark may not be challenged in an opposition proceeding during the registration process.  (But a third party could still later petition for your mark to be cancelled, after the registration process.)
• The right to bring suit for trademark infringement in federal courts and where federal law will govern the case, which is often advantageous because of much well settled federal case law.  If you prevail in your trademark infringement case you may then obtain injunctive relief, money damages, treble damages, and possibly even the defendant’s profits.
• Your mark will appear in the USPTO trademark database.  Such a presence of your mark may deter others from using your mark or attempting to register a confusingly similar mark, which further strengthens your mark.
• Registration on the supplemental register establishes your mark’s priority over other later in time marks by officially recording your date of first use.

Drawbacks of the Supplemental Register
However, the Supplemental Register does not convey all the benefits that one receives upon registering on the Principal Register.  Below are some of the drawbacks to registering in the Supplemental Register:

• Registration does not provide constructive notice of ownership or a presumption of ownership in the event of infringement litigation with respect to your mark.
• Registration does not support a later claim of incontestability status.
• Registration does not imply the right to exclusive use of your mark.
• Registration does not allow you to request exclusion of imports by the Bureau of Customs.

In any event, when your mark may be too descriptive for initial registration upon the Principal Register, you may want to consider this alternative route.

Problems in Describing Goods and/or Services
It is very common to receive refusals of your trademark registration application based on various problems in how you have described your goods and/or services.  For example, examiners often provide refusals stating the mark’s description of associated goods and/or services is too vague, or that the description of the mark itself is too vague – which often occurs with graphic image marks, particularly when color is involved in the graphic image.  However, there is good news here.  The examining attorney will almost always suggest wording which may be acceptable to use, but before you adopt such suggested wording when responding to an Office Action, you must make sure that such suggested wording accurately reflects your goods and/or services.  Thus, this type of refusal can very often be overcome.

IV. Our Preferred Process for Applying for a Trademark

Domain Name
First because of the similarity in how domain names and trademarks are used, and because applicants very often desire to have their domain name serve as the basis for the mark to be registered as a trademark, I suggest you check to see if the domain name you want is available.  And my current rule of thumb is, if the “.com” suffix to your desired domain name is not available, then your domain name is not available – at least not immediately available.

If the domain name is available – i.e. the “.com” suffix is available – you might consider registering that domain name ASAP, i.e. even before a search of the USPTO trademark because the cost of registering domain names is so small.

If the domain name is unavailable – i.e. the “.com” suffix of the domain you want has already been registered, then you may still be able to get the desired domain name, with the “.com” suffix.  One obvious way to accomplish is to simply buy the domain from its current owner.

However, there may be another option.  If you can get the domain name registered as a federal trademark, which means you must be using the mark in commerce, then you may be able to force the current owner of the .com domain name you want to transfer the domain to you.  If you have the mark/domain name federally registered, then you may pursue “Domain Name Dispute Resolution” arbitration out of court via the rules set up by ICANN.  Anyone who registers a domain name agrees to abide by these rules.  Note, this area of domain name dispute resolution is sometimes discussed as “cybersquatting.”

And if the “.com” suffix of a domain name is already taken (i.e. registered by another), one reason I suggest not registering the “.co,” “.org,” “.info,” “.net,” or “.whatever” suffix  is because if you do, you may find yourself in litigation where the “.com” owner is coming after you for operating under a confusingly similar name.  You may of course prevail, but I think it is often better practice to avoid foreseeable litigation. This same logic applies to being creative with domain name words, such as adding hyphens to get a “.com” suffix.  Just do not do it, it is asking for trouble.  For example, I being Eric Kelly wanted “KellyIPLaw.com” for one of my domain names, which is of course taken by another, but “Kelly-IP-Law.com” is not, but I will not register that domain name using the hyphens because I belief it may be asking for trouble down the road.

Search – Knock Out Search
Now turning to the traditional trademark concerns…the search of the USPTO trademark database.  The point of the search is to assist in determining if you are first in time with your mark for your goods and/or services and to see if there may be potential confusion (LOC) issues.

Lexell vs. Lexel:  A Lesson in Searching
If you search the USPTO trademark database for “Lexell” as of March 10, 2014, you’ll find two entries.  And if you search the USPTO trademark database for “Lexel” as of March 10, 2014, you’ll find twenty two entries.  The results of each search inquiry do not overlap.  The moral, to properly search you must try different permutations of the letters in your mark, e.g. search both one “l” and search for two “l’s” and search both one “x” and search for “x’s.”  The thinking goes like this, if you heard an advertisement for lexel over the radio while driving you would have no idea whether “Lexel” or “Lexell” was being referred to and thus there exists a basis for the consumer to be confused.  Running different search permutations is known as knockout search.  And this logic applies equally for each word in your mark, i.e. search with a space between words and search with no spaces between words, in conjunction to varying the spelling.

But as noted above there are limitations to the search, both inherent limitations and user limitations.  Inherent limitations arise because of the lag time in the USPTO making trademark applications searchable.  That is, the day you conduct your search, there could be relevant mark applications that have been filed, but are not yet searchable and so your search will not turn these up.  And user limitations arise from how creative or uncreative the searcher is in searching various permutations of your mark.

TEAS vs. TEAS Plus Applications
Assuming the results of a proper knockout search are favorable and your mark is not too descriptive of your goods and/or services, then you’ll next want file an application to register the mark, generally first seeking registration onto the Principal Register.

When filing online to register your mark with the USPTO there are two types of online applications: TEAS and TEAS Plus.  Currently, as of July 17, 2014, the TEAS filing fee is $325 per class; while the TEAS Plus filing fee is $275 per class.

To avail yourself of the lower filing fee and save $50, your goods and/or services associated with the mark must clearly fit within a defined class and must clearly fit within pre-set description of goods and/or services for that given class.

The “class” refers to the goods and/or services.  There are a number of classes covering a variety of goods and then there are a variety of classes covering a variety of services.  For example, within the goods classes, beverages and apparel are two different classes.  If you manufacture beer but also sell apparel with your beer logo, you should register your mark under two classes, which means twice the filing fees.

Next with respect to filing the registration application, is the basis for registering, which will either be actual commercial use under Section 1(a) of the Act (e.g. interstate commerce or foreign commerce) or under an “Intent to Use” basis under Section 1(b) of the Act.

(If your mark is already in actual commercial use, but registration of your mark was refused because of descriptiveness issues then you might consider filing for registration on the Supplement Register as discussed above.)

Intent to Use (ITU) Filing Basis Under Section 1(b)
If you are launching a brand and your proposed mark is not yet in commercial use, then you file under the “Intent to Use” basis.  If you have a bona fide intent to use your proposed mark in actual commerce within 6 months of the USPTO allowing your mark, then you may file an Intent to Use application.  In some situations, you may be required to substantiate such a bona fide intent to use, so you may want to document such a decision more formally, e.g. by a formal board decision documented within the meeting minutes.

As far as mechanics of prosecuting the application, the USPTO will examine your application just like it does for applicants who filed under Section 1(a) and are already in actual commercial use.  The examining attorney will conduct searches and ascertain if there are descriptiveness and/or likelihood of confusion issues.  If the examining attorney finds no problems or you overcome any problems, then the examining attorney will allow the mark.  However, at this stage filings under Section 1(a) and under Section 1(b) diverge.  Under the Section 1(b) Intent to Use regime, your mark is not yet registered – but because your mark is allowed you are cleared for registration once you demonstrate actual use in commerce.

So to actually get the mark registered you must file an allegation of use.  You would either: (1) file an “Amendment to Allege Use” under Section 1(c) of the Act; or (2) file a “Statement of Use” under Section 1(d) of the Act.

What’s the difference between “Amendment to Allege Use” and a “Statement of Use”?  You file the Amendment to Allege Use if you go into actual commercial use with your mark before the USPTO finishes examining your application.  37 C.F.R. § 2.76(a); TMEP § 1104.03.  And you file the Statement of Use after the USPTO finishes examining your application and issues the notice of allowance.  15 U.S.C. § 1051(d); TMEP §§ 1109 et seq.

If you are going down the Statement of Use route, then you must file the statement within 6 months of the mailing date of the notice of allowance.  If you will not be in actual commercial use within that 6 month window, then you must file an extension of time.  This 6 month window may extended up to a maximum of two years from the mailing date of the notice of allowance, with extensions being granted in 6 month increments.

Assuming you file a proper and timely Statement of Use, then your mark is registered and the date of registration applies retroactively to when you first filed your Intent to Use application.

So what goes into an allegation of use (whether an Amendment to Allege Use or a Statement of Use)?  The allegation of use needs to include verifiable dates of first use in actual commerce (see TMEP § 903), and a “specimen” of use for each class of goods and/or services (see TMEP §§ 904 et seq.).  Examples of specimens may be sales invoices with your mark and/or screenshots of your website’s ecommerce webpages with your mark.

In terms of costs, filing an Intent to Use application under Section 1(b) does entail some additional costs that are required by the USPTO.  Filing of the amendment to Allege Use or the Statement of Use costs $100.  And to file for an Extension of Time to file a Statement of Use, the USPTO may charge $150 per each extension.

And as noted above, there are actually two registers the Principal Register and the Supplemental Register.  Registration upon the Principal Register is more desirable; however, when that may not be possible, registration upon the Supplemental Register is more desirable than having no federal registration.

Lastly, with respect to our trademark services pricing, our pricing may be seen here.  If you have questions, please contact us.