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10 Steps to Proper Trademark Use

Stephen Rubin, Esquire

Because clients who own or are planning trademarks, service marks or certification marks often raise the question of trademark selection and protection, I thought it would be helpful to prepare a general guide for the proper use and enforcement of marks. The guide addresses situations typically encountered in trademark adoption, use and maintenance. It does not cover all principles that may be relevant. It is not intended as legal advice and should not be relied upon for this purpose.

ONE—UNDERSTAND THE BASICS

Definition.
A trademark or brand is a distinctive word, name, slogan, design, picture, shape, color or other identifying device (Harley-Davidson engine rumble sound) or any combination of these elements, used to identify the owner’s goods and to distinguish them from the goods of others. Examples of famous federally registered trademarks are the word APPLE® for computers and related products, the figure of the JOLLY GREEN GIANT® for packaged vegetables, the slogan WHEN IT RAINS IT POURS® for salt, and the JAGUAR HOOD ORNAMENT® for automobiles. A service mark differs only in the fact that the owner sells a service rather than a product. FEDEX® for express package delivery and the CUPPED-HANDS DESIGN® of Allstate Insurance Company are well-known examples. The term trademark is broadly used to include service marks. A certification mark is a trademark or service mark adopted by a person (typically a trade group or government agency) to certify geographical origin, quality, or any other established standard by others authorized to use it. The word mark MAUI® certifying onions grown on the Island of Maui by the Maui County Farm Bureau is an example. (Because certification marks operate under somewhat different rules, the present discussion will be limited to trademarks and service marks.)

Use.
In America, marks are created simply by use in commerce in connection with the sale of goods or services. The first to use a mark within a territory becomes the owner within the territory. The only requirements are that the mark be distinctive (unique) to the particular product or service and that it be used in such a manner as to signify to consumers the source of the particular product or service. There is no requirement that the owner register the mark, although registration carries with it significant benefits as later mentioned (Step 10). A mark also can be “reserved” prior to actual use under certain statutory conditions. An “intent-to-use” application may be filed in the United States Patent and Trademark Office (USPTO) certifying a future intention to use the mark in interstate commerce. If the application meets all requirements, and use commences within the required period, registration will be granted. A subsequent applicant will de denied registration.

Abandonment.
Just as a mark is created by use, it is important to understand that it can be lost just as easily by improper use (Steps 3-5), prolonged nonuse (Step 8), or lack of enforcement against infringement (Step 9). Many acts that can jeopardize ownership of a mark result from ignorance or oversight.

TWO—START WITH A DISTINCTIVE MARK

There is a limitless universe of potential marks, bounded only by imagination and ingenuity. Having said that, it always seems the best marks are taken. This is especially true now that considerable commerce is transacted over the Internet and zillions of newly-minted domain names can intersect with product and service trademarks. The first mistake some owners make is to choose a mark that is either merely descriptive of the goods or services, or is similar to a popular mark already in use for the same or related goods or services. Either path can cause endless trouble. The cardinal rule is that a mark must be distinctive. The more distinctive and unique it is, the more powerfully the mark identifies the particular source of the goods or services and the easier it is to enforce and protect. The YAHOO® mark is very distinctive because it consists of a totally arbitrary or coined word applied to an Internet portal and search engine. At the other extreme, a mark that is generic, such as “The News” for a newspaper, has no product identification value and is unenforceable. Quite simply, consumers and competitors cannot be prevented from using the word in its ordinarily understood dictionary meaning. In the middle zone are marks that are descriptive or suggestive. These, too, may cause problems depending upon where they fall on the “distinctiveness” spectrum. Thus, “The Daily” for a newspaper is not generic, as would be “The News,” but it is merely descriptive of a daily newspaper. Other newspaper publishers cannot be prevented from using “daily” to describe their paper, making the mark virtually unenforceable. The same is true for the descriptive words “Cable News Network” (although the nondescriptive letters CNN® function as a registered mark for cable news programming). Certain descriptive marks may become distinctive and enforceable if, through continuous use and association, the words acquire a distinctive “secondary meaning” in the minds of the consuming public. This has happened with the words DAILY NEWS® for a New York newspaper. Secondary meaning is a difficult process to achieve and is rightly avoided by a new enterprise seeking a powerful brand without entanglements.

In addition to selecting a mark that is generic or merely descriptive of the goods or services, another common mistake is to select a mark that is close in appearance, sound or meaning to that of a competitor (“Burger Queen” for a hamburger restaurant), or which copies a famous mark, although for a different product (“Cars ‘R Us” for a car dealership). Conversely, you may be able to use the same mark on very different products that would not result in public confusion (FORD® automobiles and FORD® modeling agency). Speaking of Ford, it may come as a surprise that you do not have the absolute right to use your own name as a trademark. While the FORD modeling agency is not likely to confuse, the “Ford” used-car lot is, even if Ford is the true name of the car dealer. While there is no means to guaranty discovery of every existing use of a mark, there are search procedures available that will assist in identifying existing uses. Availability searches should now include domain registries. Please ask me for further information about this.

THREE—ONCE YOU CHOOSE A MARK, STICK WITH IT

Consistent use of a mark promotes the imprint of your mark on consumer’s minds. If your mark is Maple Hill one day and Maple Grove the next, your customers will not be certain whether they are buying from one company or two. The same can be said of other trademark features. The EXXON® and MOBIL® typefaces constitute an instantly recognizable part of their respective marks. If these companies varied the typeface from one gas station to another it would severely weaken the power of the unique image and the mental association it conveys to consumers. Even a slight change in spelling or sporadic use of an abbreviation can have the same confusing effect on consumer perception.

FOUR—WATCH YOUR GRAMMAR

A mark should be used as an adjective and never as a noun or verb. There is a risk, although slight in most cases, that once a mark becomes well known for a particular product or service it will become synonymous with that product or service. This most often happens if the mark is descriptive of a quality of the goods or services, or is the mark of a totally new product. Thermos, cellophane, refrigerator, aspirin, yoyo, nylon and Murphy bed are classic examples of once valuable trademarks lost through public generic use. In each of these cases an adjective (Thermos insulated bottle, Cellophane transparent wrap) has passed into the language as a noun. Xerox Corporation has battled a different grammatical issue—ubiquitous use of its registered trademark XEROX® for photocopier products as a verb (I’ll xerox this page). When commencing to use a mark, it is prudent in both print and speech to make clear it is an adjective. For example, you would advertise your FRUMKIN donuts rather than just offering frumkins for sale. Especially if your hypothetical donut has a unique shape or ingredient, you may soon learn competitors have begun selling their own “frumkins” in response to customer demand. Starbucks faced just such competitor use of its newly-adopted FRAPPACINO® mark for newly-invented iced coffee drinks. Incidentally, the owner of the DUNKIN’ DONUTS® trademark may have something to say about your choice of “frumkin” as a donut brand due to its similarity with its famous mark. Unless you name happens to be Frank Frumkin and you have a great deal already invested in the Frumkin donut brand, it is prudent to avoid controversy and possible litigation with a powerful foe by giving wide room to famous brands in your market that are similar in sound, meaning or appearance.

FIVE—APPEARANCE COUNTS

By now you have observed that I have printed word marks using all capital letters. This is one convention used to assure that the mark is imprinted in consumers minds and, equally important, is not mistaken for the generic product itself. Other options are to always capitalize the first letter of the mark or use special typography (e.g., italics, boldface, larger lettering, different lettering, different color). A design mark (a graphic identifier) should be based on an original creation and not “clip art.” It is important to appreciate that proper trademark use is a habit that begins with management. If management uses company marks correctly, then proper company-wide practice becomes routine. Your customers will be greeted with consistent, grammatically correct, and highlighted use.

SIX—YOU’RE ON NOTICE

A further means to differentiate use of mark from a generic term, as well as to place the public on notice that you claim trademark ownership rights, is to use one of the conventional symbols of notification. For a trademark or service mark registered in the United States Patent and Trademark Office, that symbol is the encircled “R” or ®. Alternatively, the words “Registered in the U.S. Patent and Trademark Office” or the shortened “Reg. U.S. Pat. & Tm. Off.” May be used either adjacent to the mark or somewhere on the packaging or advertising. It is not necessary to give a date as it is with copyright notice. Nor does failure to display the federal symbol invalidate the registration. However, use of the symbol provides a strong deterrent to possible infringers and it makes it very difficult for a copier to claim ignorance of your use of the mark. If the mark is not registered, or is registered only at the state level or in a foreign country, the appropriate symbol is the superscript letters “tm” for a trademark and “sm” for a service mark. During the period a federal registration application is pending, it is appropriate to use the “tm” or “sm” symbol until the Certificate of Registration is formally issued. Only then can the ® symbol be used. The notification usually appears at the end of the word mark in smaller type. There are no absolute rules, however, and the guiding principle is that the notice must be visible to the average viewer. Where a mark consists of a picture or design, the notice can appear anywhere next to the picture or design. It is only necessary to print the notice symbol once on a page, label or advertising.

SEVEN—OF TRADE NAMES AND TRADEMARKS

A question often asked is the difference between a company’s business name (trade name) and its trademark or service mark. The issue arises when the same word or words appear in the name and mark. The answer is that the same words may function as both a mark and a trade name, depending on the context of use. A trade name is a proper noun identifying the business, and as such is not a mark. It follows that simply incorporating the company and adopting the company name in a particular state does not confer any trademark rights. (Similarly, registration of a domain name does not create trademark rights.) It may be possible to incorporate under the trade name Tiffany Corporation in a number of states. This would not confer on the corporation the right to use “tiffany” as trademark for jewelry because TIFFANY® is the federally registered mark of Tiffany & Co. for jewelry and other luxury items. Only if the trade name is also used directly in conjunction with goods or services to identify their source (i.e., as an adjective), does it also serve as a mark.

EIGHT—USE IT OR LOSE IT

The principle that a mark is created by use is a double-bladed sword. Regular use creates a mark; prolonged nonuse terminates a mark. There is no exact measure or set dollar volume to determine what constitutes the requisite use. In the case of goods, regular sales in commercially viable amounts are sufficient. For services, there should be ongoing performance of the service. In both instances, there should be a demonstrable intent and capacity to conduct continuing business evidenced by such things as facilities, staff, inventory and marketing. An interruption of short duration is not of concern. The intention of the owner is very important. Chevrolet recently brought back the IMPALA® mark for one of its automobiles after a period of more than a decade of nonuse. During this period, Chevrolet took steps to keep the mark in the public eye and to ward off other users.

NINE—PROTECT AND DEFEND

It is not enough that you use your mark properly. You must assure that no one else uses the mark without your consent. If an infringing use is allowed to continue, particularly if it is with the knowledge of the owner, then the owner may lose the right to object as a result of the legal doctrines of waiver, estoppel or laches. The law imposes a duty on the trademark owner to take corrective action for infringements that are known or should have been know through reasonable diligence. Additionally, if use of the mark is permitted by license or assignment, careful attention to the formalities of transfer must be observed to avoid inadvertent invalidation of the mark.

TEN—BENEFITS OF FEDERAL REGISTRATION

By now you have read many times that a trademark or service mark exists merely from adoption and use. Such marks are called “common law” marks and are enforceable in state court or, in certain circumstances, in federal court under federal unfair competition law. A common-law mark confers exclusive use of a mark to the first to use it, but only in the geographic area in which the mark actually is used. If the mark is used in connection withy goods or services that cross at least one state border (interstate commerce), federal registration in the U.S. Patent and Trademark Office is available. Federal registration grants exclusive use throughout the United States, not simply the territory of actual use. Registration confers a presumption that the mark is valid and enforceable, and infringers are exposed to payment of attorney’s fees and the possibility of treble damages in the event infringement is established. Other remedies accorded only by federal registration are procedures that render the registered mark “incontestable” and which enable the U.S. Customs Service to seize counterfeit goods at U.S. ports of entry.