Trademarks: the what, why, and how
Thursday, September 26th, 2013
Issue 39, Volume 17.
Well-known word marks include Apple, Sears and Chevrolet. Famous logos include McDonald’s Golden Arches and NBC’s peacock-style design. Well known slogans include Budweiser’s "The King of Beers" and BMW’s "The Ultimate Driving Machine."
Many businesses have valuable trademarks, but for some unexplained reason, fail to take the time to protect these important assets. This is indeed unfortunate because trademarks are one of the most enduring and valuable assets of the business and effectively function to prevent confusion, deception, and mistake in the marketplace. Trademarks are easy to protect and can readily be sold or licensed. Additionally, they constitute intangible assets that substantially increase the value of the company.
One reason for failing to protect valuable trademark rights may be the mistaken belief that by incorporating a company under a particular name or by registering a domain name, the business has exclusive rights to use that name and has the ability to prevent others from using the same or similar marks. This is clearly not the case.
Reserving a corporate name with the Secretary of State secures the company name in a ministerial sense in accordance with state laws. Domain name registration merely functions to obtain a recognizable web address.
However, neither of these activities provides exclusive rights to use the name, nor does it prevent third parties from using the same or a similar name. Nor does the fact that the state approves a particular corporate name prevent a third-party who owns a federally registered trademark that is confusingly similar to the corporate name from stopping the owner of the corporate name from continuing to use the name.
Federal registration of a trademark is the best way to protect the trademark and provides a statutory right to the protection of the mark throughout the entire United States. Federal registration also permits the use of the ® symbol which indicates to consumers and other businesses that the trademark is registered. If a competitor starts to use the same or a similar mark, the federal trademark registration gives the owner of the registration access to the federal courts to prevent the competitor from continuing to use the mark and in some cases to recover monetary damages.
Additionally, registering the mark prevents third parties from attempting to register the same or a similar mark in the Patent and Trademark Office. Also, if someone tries to register a domain name that infringes on the registered trademark, it is possible to expeditiously shut down the website based on the trademark registration.
This benefit makes trademarks extremely important for Internet businesses where confusing names could direct traffic away from a valuable, well established web site. Further, after the mark has been registered for a period of five years it automatically becomes incontestable, thereby eliminating many commonly used trademark infringement defenses.
Among the specific benefits of having a federally registered trademark are the following:
• Constructive notice nationwide of the trademark owner’s claim.
• Evidence of ownership of the trademark.
• Jurisdiction of federal courts may be invoked.
• Registration can be used as a basis for obtaining registration in foreign countries.
• Registration may be filed with U.S. Customs Service to prevent importation of infringing foreign goods.
• Following registration, the trademark will appear in third-party trademark search reports thereby discouraging third parties from proceeding with the registration of the same or similar mark.
• The Patent and Trademark Office will refuse registration of any confusingly similar trademarks.
• Under certain circumstances the Registration provides the Registrant the right to recover up to triple damages and attorney’s fees from an infringer; and
• A registration increases the likelihood of the successful filing of a dispute resolution policy for an infringing Internet domain name.
For additional information regarding the preparation and filing of state and federal trademark applications, call the law firm of Brunton & Jagger at (760) 631-3081. The office is located at 1667 S. Mission Rd. Suite G, Fallbrook.
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