Whether and How to Register a Federal Trademark

Should your business pursue trademark protection for a brand name, logo, or other way of uniquely identifying your product or service?

A trademark is “any word, name, symbol, or device, or any combination used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods. In short, a trademark is a brand name.”[1]  The question is, should your business file to obtain a federal trademark?

1. Assess the Business Value. Brands enable a company to distinguish a product or service from those of the competitors, and to create a lasting impression in the minds of consumers.  They are also business assets.
   1. Although a brand serves as a proper name for a product or service (and is therefore “denotative”), its value is often connotative: it signifies or betokens quality, dependability, price and other positive mental associations between the name or symbol and the product.  You may want to use this connotation to drive adoption and repeat sales.
   2. The primary purpose of trademark is to distinguish your goods or services from others’.  In crowded or commodity markets, differentiation may be essential to get through the ‘noise’ and clutter.  In a long list of products on the internet, for example, it may be to your great advantage if you have a visually interesting and appealing logo.
   3. Asset Value. A trademark is an intangible asset of the business, forming part of goodwill on the balance sheet.  Brand equity can often exceed the capital value of the underlying physical plant or contracts.  By one estimate, 70% of the $13 billion acquisition price for Whole Foods by Amazon was attributable to goodwill.[2]  A trademark can be licensed, sold and hypothecated (as a security).

If the brand you are considering trademark for has a strong business value under one or more of the above criteria, you should then assess the benefits of trademark to your business.

2. Consider the Legal Benefits. The legal benefits of trademark are significant and include exclusivity (only you can use the mark), notice (would-be infringers are on notice of your ownership), priority (you own the trademark from the time it is first used in commerce) and import protection (a trademark owner can invoke the power of the US Customs and Border Patrol to prevent goods from entering the United States.   NOTE that, even if you decide that the business value and legal benefits of registering a trademark are not warranted, if you nevertheless intend to use the mark, it may behoove you to determine whether you are risking a trademark infringement lawsuit by using the mark – if you run afoul of another with trademark rights, you could be forced to stop selling your product, impound or destroy products that use the mark, or pay the owner money damages.  Therefore, it advisable that you conduct a defensive search (indicated in the diagram by the dashed line).

3. Product or Service? Is the brand the name of a product or service?  If it is only the name of your business – i.e., your tradename – then it is not eligible for federal trademark protection.  Instead, you should seek to register it in your state as a ‘fictitious name’ – a name used to identify your business (something you may wish to do regardless of, and in addition to, trademark considerations). ä   Note, however, that it is not difficult to make the case that your company’s name is also the name of its product or service.  “Coca Cola” is the brand of a soft drink as well as the name of the company that makes it.

4. Interstate Commerce?  The federal government gains its power to issue and enforce trademarks from the Commerce Clause of the US Constitution, which requires that commerce affect interstate commerce in order for the federal government to regulate or otherwise legislate concerning it.   Your product or service must be offered in interstate commerce.  “For goods, ‘Interstate commerce’ involves sending the goods across state lines with the mark displayed on the goods or the packaging for the goods. With services, ‘Interstate commerce’ involves offering a service to those in another state or rendering a service that affects interstate commerce (e.g. restaurants, gas stations, hotels, etc.).”[3]
   1. Intent to Use. However, even if your product is not yet in interstate commerce (or perhaps even available to the public), you may nevertheless file for a trademark under an “intent to use” basis, provided that you subsequently actually offer the good in commerce and prove it with the US Patent & Trademark Office (“USPTO”).
   2. State Trademark. If your product or service is likely never to be in interstate commerce, you may nevertheless seek State trademark protection.  In Pennsylvania, a simple filing detailing the mark provides 5 years of protections against others using the mark in-State.

5. Assess Strength and Eligibility of the Mark. Not all names and symbols are good trademarks, or for that matter, trademark-able.
   1. Arbitrary? The strongest trademarks – from both a legal and (I would venture) a business and marketing perspective – are arbitrary with respect to the thing signified (“Apple” for computers, “Gap” for clothing, “Ford” for cars). If your mark is arbitrary, you can confidently move to the next step of the analysis and investigate whether it is a unique mark, or confusingly similar to another.
   2. Fanciful? Fanciful marks are strong and likely to be approved by the Trademark Office (all things equal).  Often, these are neologisms – words that have never before existed – XEROX, Intel, Kleenex, Tylenol, etc.
   3. Suggestive? Suggestive marks, such as “At-a-Glance” for calendars, “Nice ‘n Easy” for hair products, or “Redi-Whip” for foods, are registrable, but their scope may be limited (you may find your mark alongside other permitted variations or the same mark alongside many other classifications).
   4. Descriptive. Descriptive marks, as the name suggests, portray some attribute of the product – “Speedy Repair” or “Reliable Aviation.”  Descriptive marks are generally not registrable, without showing that a mark has, through long use, become a well-known moniker for the product (indicated by the dashed line running from the “Descriptive?” decision). ä
   5. None of the Above? If your mark is not arbitrary, fanciful or suggestive, then it is likely to be not  Generic names (names for the thing being named) are not registrable; “Bicycle” may work as the name of a card deck, but not as the name of a two-wheeled, pedaled transportation vehicle.  Nor are surnames trademark-able, absent a showing that they have acquired distinctiveness (such as “McDonalds”, “Ford”, and “Dell”). ä

6.  Every mark is classified according to one or more of 45 classes of goods and services (1 to 34 for goods; 35 to 45 for services).  You will choose which class(es) your mark belongs to and which coordinate classes might also apply (a mark might, for online learning for example, be for both “computer, scientific and legal services” and “education and entertainment services”).  The same trademark can exist in different categories (“Apple” computers can co-exist with “Apple” hotels), and classification serves to both limit the scope of a given mark and limit the search for relevant variations on the word.

7. Both the applicant and the USPTO will conduct a search of the federal Trademark Electronic Search System (“TESS”) database, looking for marks for which there is a “likelihood of confusion” with your own in the class(es) in which you are registering.[4]  It is advisable to also search other databases, including Google/Bing and internet domain name registrars to determine if there are perhaps unregistered, but nevertheless temporally prior uses of similar marks.

8. Assess: is there a Likelihood of Confusion? As the last step before filing for a federal trademark (and spending $225 to $275 and more), you and your lawyer should make a determination of a likelihood of confusion and therefore a likelihood that the application will be rejected.  If you decide to file, it makes sense to do so as soon as practicable – perhaps even filing an “intent to use” application if you’ve just developed the mark and haven’t yet used it in commerce.  If, only the other hand, your mark is too similar to another in your class, you may want to avoid the USPTO and attorney fees and go back to the drawing board with the mark.
9. The actual registration process is quite simple and done entirely online (except in limited cases).  The registration fee is non-refundable.  It will take about 3 months before an examining attorney is assigned by the US Patent & Trademark Office.  It will take another 2 to 3 months before there is an Office Action.  Changes to the application will have to take place through amendments, which are subject to their own processes and fees.

[1] https://www.uspto.gov/learning-and-resources/trademark-faqs#type-browse-faqs_1223  Although this definition speaks in terms of “goods,” trademark also applies to services – a “service mark” is a trademark for services.

[2] https://www.cnbc.com/2018/02/06/amazon-10-billion-goodwill-balance-shows-whole-foods-strategy.html

[3] https://www.uspto.gov/learning-and-resources/trademark-faqs#type-browse-faqs_1223

[4] “Likelihood of confusion” is Based on criteria developed in Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir. 1961).