20 Feb 2018 Do You Have a Brand to Trademark?
If your company has a word trademark, a design trademark (aka, logo) or other form of trademark that it would like to register, the Royse Law Firm can help. We advise clients about potential conflicts with other trademarks, we handle direct registrations in the U.S., and we undertake extensions of U.S. applications and registrations to International Registrations under international trademark treaties that provide registrations in other countries. We also deal with all manner of trademark and related disputes, including domain name disputes, and litigation when necessary.
From our extensive experience in this area, we have found that clients are best advised to consider strategic branding issues before they turn to actual clearance and applications to register particular words, designs and slogans with the US Patent and Trademark Office (USPTO). What follows is based on our experience as applied to strategic branding issues. We will use the term “trademark” to apply both to products and to services, even though brands for services are more technically described as “service marks.”
Strength of Trademark
Clients will often approach us about registering proposed word marks that are suggestive (or even descriptive) of their proposed product or service. We understand the business impulse to be suggestive in the choice of a word mark. When a company is starting out, or when an established company is trying to launch a new product or a new service, terms that are suggestive help greatly in connecting with potential customers. If you’re looking to brand yourselves as specialists in some kind of technology, for example, “__[Something]__ Tech” announces that.
Not all trademarks are created equal, however, even when they have each achieved registration with the USPTO. Some registered trademarks are strong, and some are weak. The strongest trademarks are those that are not at all descriptive or even suggestive of the product or service offered, and that are unlike any others in the same field. Tesla® for automobiles, Exxon® for petroleum products and services, and Google® for online search services are examples of very strong trademarks.
Terms that are suggestive, or that are similar to another company’s brand in the same field, are inherently weaker trademarks, even if they achieve registration. They are also likely to be more expensive to maintain in good legal standing, since they are more likely to conflict with other trademarks as the marketplace evolves.
As noted, we understand the impulses that lead companies toward descriptive trademarks. For some people, their experience with patent law can frankly become a liability when it comes to trademark law. One of the foundations of patentability is that the design is demonstrably useful. That frequently leads inventors to come up with creative ways to indirectly describe the product or service, and to propose that disguised description as the trademark. One of the various ways that this happens is by trying to be the first to use an acronym that is only recognized in the field of technology as the brand for a more mass market offering. The Trademark Office requires disclosure of meanings known in an industry, however, and will often deny registration to proposed marks that describe the offering when the shorthand is more fully articulated.
Elaborating on what we said above, we know that an important impulse towards descriptive trademarks also is to shorten the sales cycle. A new company may not have the financial luxury of being able to slowly build brand recognition for a term that indicates nothing about the product or service to potential customers. We know that there is no long term for a company if it can’t get through the short term.
Our advice with respect to trademark law, however, is and must be that there are likely to be more challenges and expenses in attempting to register and maintain trademark rights in a suggestive term, both in the U.S. and abroad.
So far this has addressed word trademarks. While there are differences in how these considerations apply to slogans and to design marks (logos), as well as to more exotic trademarks that are based on color, sound and other media, the same principles apply to all of them.
Leveraging the Brand
With this understanding of the considerations surrounding suggestiveness of proposed trademarks, it’s now helpful to back up a bit, to the implications of a company name. The name of a company is not the same as a trademark for a product or service. Filing incorporation documents creates zero trademark rights for the newly formed company. The name of a company without an “Inc.” or “Corporation” or other suffix is called the company’s “trade name,” and using the trade name to seek investors or to recruit employees also creates zero trademark rights.
Of course a name can be both a trade name that identifies the company as an entity, and can become a trademark that brands its products and services. A company that is confident that it wants to use the company name as a well chosen brand for its products or services is best advised to file an “intent to use” (ITU) trademark application, which will establish the company’s very important “priority date” for the trademark claimed in the application.
Please note that an ITU application (and for that matter any trademark application) should be carefully drafted. Unlike some legal filings, it’s usually not possible to file an application in haste to establish a priority date, with the expectation that one can later amend the application to identify the brand and its features differently from the initial ITU application.
Trademarks can achieve final registration only after there has been “trademark use” of the mark. Trademark use requires that the mark be displayed as branding the product or service being offered, in a manner so that a customer can promptly purchase the product or service. This illustrates the difference between use of a name as a company trade name in dealing with prospective investors and employees, and use of the name as a trademark: names become trademarks only when the word or symbol is used to identify and offer the product or service for immediate purchase.
Early stage companies almost always take the approach whereby their trades names becomes their trademarks that brand their products and services. That way, any publicity for the company helps to create brand recognition for its products/services, which again supports sales compared to a situation where the company’s name and its brand are distinctly different.
As a company develops a variety of products and services there are branding issues about whether to include the company name in each product or service brand, or whether to differentiate each offering by using dissimilar brands. A company’s CMO and often its Board will decide whether it should segment the market between a higher price/quality offering and a lower price/quality offering in the same category, and whether the branding should be differentiated. These are strategic and marketing choices that are deeper than mere legal considerations.
We can, however, offer one big picture consideration that is sometimes overlooked. When company XYZ brands all of its products and services as “XYZ ____,” it is maximizing the leverage of the XYZ brand. That works great so long as XYZ is properly regarded in its market. If, however, there is a product recall or other event that tarnishes one of the XYZ offerings, then the negative associations will likely extend to other product lines. In that event, the company might wish that it had launched its second offering as the “ABC ____” product, so that the recall of XYZ would have less of an impact on it.
In case this sounds too theoretical, consider what has happened to Volkswagen as a result of its line of diesel cars. Or consider the position of investors in The Weinstein Company. Both companies had maximized their brand leverage.
In distilling this advice into action, we offer a final thought. We know that clients work hard on choosing a brand in light of these and other considerations. Often a leading candidate for a brand will emerge that clients become enthusiastic about. In some circumstances, however, there will be some level of conflict with an existing brand. It is therefore best not to become overly committed to a particular brand choice, until legal advice is obtained that the choice is likely to be successfully registered as a trademark.
We will be happy to assist you with your trademark legal needs. Our trademark practice is headed by attorney Alan Haus, who is a former Chair of the Trademark Committee of the California State Bar’s Intellectual Property Section. For your convenience, we also here provide this link to the helpful resources that are on the Trademark side of the USPTO website: