Trademarks: Why it is a Good Idea at Some Point

Posted on April 23, 2012

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Article Highlights:

  • Once the company begins to use its brand and becomes a proven force in the marketplace, then trademark protection is probably a good idea.
  • Before pouring too much money into advertising and promotional materials, getting a registered trademark helps insure that the company actually owns the trademark.
  • If the company has the money to invest, a trademark will give the owner some peace of mind.
  • If a company can only afford one, most trademark practitioners recommend that the word mark be filed for first and the logo at a later date.

A trademark is a word, phrase, symbol or design that identifies and distinguishes the source of the goods or services of one party from those of others. Once the company begins to use its brand and becomes a proven force in the marketplace, then trademark protection is probably a good idea.

First, a company will want to protect the investment in their name. Marketing for almost all companies is about brand development, i.e. getting your name out there, having a recognizable image, etc. Before pouring too much money into advertising and promotional materials, getting a registered trademark helps insure that the company actually owns the trademark.

In addition to being protective, a trademark provides a defense against another company’s claim of infringement. If a trademark is registered, a company has a good defense against a cease and desist letter from another company. Additionally, if expansion is a possibility a federal trademark helps when you are ready to expand. Many companies have sought to expand, only to find that there was already someone with a similar name in that territory providing similar goods or services. At that point, they are left with the decision to change their name, remove that territory from their expansion plan or try and negotiate a Coexistence Agreement with the party.

Particularly in these circumstances a trademark is a good idea for an established company:

  • The company decides to franchise;
  • The company decides to open an office in another state; or
  • The company’s products will be offered for sale in grocery or retail stores across the country.

Oftentimes businesses cannot predict how large the company will grow or where it will expand in the first five years of operations. This makes it difficult to decide the best time to obtain protection for the company’s identity. If the company has the money to invest, a trademark will give the owner some peace of mind.

Federal registration is not required to establish rights in a trademark. Common law rights arise from actual use of a mark. However, there are many benefits of federal trademark registration, and these include the following:

  • constructive notice to the public of the registrant’s claim of ownership of the mark;
  • a legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration;
  • the ability to bring an action concerning the mark in federal court;
  • the use of the U.S registration as a basis to obtain registration in foreign countries; and
  • the ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods.

Sometimes filing for a trademark is a relatively painless process. The application can be found online at www.uspto.gov. However, while it is a seemingly simple process, the application can cause problems for the rookie filer. Though appearing easy, the application is technical in nature and full of traps. While there are many valid reasons for hiring an attorney to file your trademark application, simply having someone who has done it before can be a huge time saver. They will also be up to speed if something goes wrong.

If any later filings are necessary, then there will be an additional fee, depending upon the complexity and time involved in the later filing. Technical compliance filings do not require significant work and can be performed for an additional flat fee. However, a likelihood of confusion challenge (or a challenge for another reason) can require a significant amount of work. If you want our assistance for these post initial application filings, I will charge you by the hour, pursuant to my firm’s hourly rates.

Many business owners ask if they should file for the word mark and/or the logo. In a perfect world, I would say to file both. However, not all small business owners can afford two trademark applications out of the gate. If a company can only afford one, most trademark practitioners recommend that the word mark be filed for first and the logo at a later date. The word mark does offer a wider breadth of protection. If you file for the logo and not for the word mark, then a problem can arise later if you decide to change the logo.

Mike Goodrich
Goodrich Firm, LLC

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