Guide to Trademarks

When you need trademarks.

When you are investing time and money in developing and marketing a product or service, you will want assurance that consumers will easily recognize it as yours.

You will hope to built up a reputation and make repeat sales, and it could be disastrous if a competitor were able to put a similar product on sale which could be confused with yours.

By using a trademark -- a distinctive sign which identifies your product or service exclusively -- you can build up brand loyalty among customers. Similarly, one who wishes to sell "private label" goods which are made to specification by a variety of different manufacturers may use a mark that identifies the seller as the source of the goods.

Definition of trademarks.

A trademark includes any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or seller to identify the source of the goods or services and distinguish them from those supplied by others. A service mark is a trademark that applies to services. Both are generally referred to as "trademarks" in this guide.

Function of trademarks.

The primary function of a trademark is to indicate origin. However, trademarks also serve to guarantee the quality of the goods or services and, through advertising, serve to create and maintain demand. Rights in a trademark are acquired by use or applying for a federal trademark registration before use. Use of the trademark must ultimately occur, and must continue if the rights so acquired are to be preserved.

Choosing a trademark.

In choosing a trademark, your aim should be to find a word, symbol or design or a combination of these which is not purely descriptive of the product or service concerned. A descriptive mark -- or a common surname or geographical name -- cannot, as a new mark, be sufficiently distinctive to qualify for registration. It could be used by others and would be difficult to monopolize.

You should avoid marks which could be regarded as deceptive, that is to say, those which suggest that the product has some characteristics which it does not, in fact, have.

There are already a great number of registered marks so it is not easy to find one that is suitable for your product or service and at the same time free for use and registration. It is advisable to create a number of possible marks and have them searched against marks that are already registered, applied for, or in use.

Proper use of a trademark.

Trademarks must be used properly to maintain the rights you desire. A mark that becomes the generic name of a product is no longer treated as a trademark. Famous examples of lost trademarks are aspirin, nylon, yo-yo and cellophane. Each became part of our language as ordinary definitional words.

This problem can be avoided by the following practices:

  • Use the generic product or service name in association with the mark. Always use the mark as an adjective, and not as a noun. Examples: KODAK film; KELLOGG'S corn flakes; XEROX copiers.
  • Give your trademark distinctive typographic treatment. At a minimum, capitalize the first letter in it -- or the entire mark. Use bold type, or a print logo if you have one. Be as consistent as possible in presenting your mark to the public.
  • Label your trademark. From the very beginning and without a registration, you can use a superscript abbreviation (TM for trademarks; SM for service marks) adjacent your mark. After registration in the Patent and Trademark Office, you should utilize the letter R enclosed in a circle.
  • Consider using the mark for a number of products or services. It will be more likely to be recognized as your identifier, rather then as the name of any one product. It is also much more economical to build legal rights in a single recognizable mark. The goodwill associated with your mark will extend to new products and models as you introduce them to the public.
Federal trademark registration.

Registration of a trademark in the Patent and Trademark Office does not in itself create or establish any exclusive rights. It is however recognition by the Government of the right of the owner to use the mark in commerce to distinguish his goods from those of others.

In order to be eligible for federal registration, a mark must be in use in interstate commerce. However, it is no longer necessary to use the mark prior to filing an application to register it before the U.S. Patent and Trademark Office. Anyone can file an application by asserting an intent to use the mark. The application will then be fully examined and ruled upon, but the mark cannot be registered until actual use has occurred. This permits one to obtain a holding of registrability prior to an investment in labels, advertising, etc. Those planning to introduce a new mark should consider prompt filing of an application to register it.

State trademark registration.

Trademarks can also be registered in individual states in which they are used. This is normally advisable when only local use of the mark is contemplated since the benefits of state registration are usually more limited than those available from a federal registration. In some instances, proceeding with both avenues of registration is advisable.

One using a trademark in the State of Washington should consider obtaining a Washington State registration which now carries presumptive statewide rights and provides notice of rights to all subsequent users in this state.

Common law trademarks

Registration of trademarks is not compulsory. Common law rights actually begin when a mark is first used in connection with the goods or services before the public. These trademark rights are enforceable in local courts, but are limited geographically to your actual area of use.

Advantages of registrations include establishment of supplemental legal rights in your trademark and constructive notice to all subsequent parties of your claim to ownership.

Equally important, it is simpler and therefore less costly to stop a competitor from using a mark which is similar to yours, when you have a registration, rather than trying to rely merely on your common law rights

The very fact that the mark is registered at the federal or state level typically deters others from using the same or a similar mark.

Deadlines.

There is no time limit for applying to register a trademark at either the state or federal levels. However, delay in filing to register a mark can create complications if another party should apply to register a similar mark prior to you. The best practice is to seek advice and file trademark applications promptly.

Notice of registration.

A Federal registrant should give notice that his or her mark is registered by displaying with the mark the words "Registered in U.S. Patent and Trademark Office", or "Reg. U.S. Pat. and TM. Off.", or the letter R enclosed with a circle. Use of such notice before the actual issuance of a certificate of registration for the mark is improper, and may be the basis for refusal of registration.

Trade and commercial names.

Trademarks differ from trade and commercial names which are used by manufacturers, industrialists, merchants, agriculturalists, and others to identify their businesses, vocations or occupations, or the names or titles lawfully adopted by persons, firms, associations, companies, unions and other organizations. The latter are not subject to registration unless actually used as trademarks.

State registration of a corporation name or licensed business name does not confer trademark rights, which only arise as a result of use of a name or word on product labels or in connection with offered services. Registration of trademarks is separate from other business registrations with the Secretary of State in most states.

If you conduct business under a name that is not your legal name or the name of a corporation, you are required to register this "assumed business name" in each state in which you do business. Failure to register an assumed business name might affect your right to access the courts in that state to assert your legal rights against others.

Trademarks in foreign countries.

Trademark law and protection arise on a national basis. As a rule, registration covers only one country and separate applications have to be made in each country where it is intended to use and protect a mark.

Owners of trademarks having business or prospective business in foreign countries who desire to protect their marks in such foreign countries should ascertain the nature of the trademark laws in those countries in order to protect their rights. In many foreign countries a resident there may obtain a registration of a trademark without having actually used it in trade. Such a registration may be used to prevent the importation into that country of goods bearing the mark.

To effect registration in many foreign countries, it is essential that registration be effective in the United States. Having secured registration domestically, the owner frequently may secure registration in foreign countries before actually using the mark there. Duration of certificates of registration in foreign countries varies in accordance with the laws of each country.

Portions of "A Guide to Trademarks" were excerpted and edited from the following U.S. Government publication:

  • "General Information Concerning Trademarks" Patent and Trademark Office, U.S. Department of Commerce.

Internet Domain Names and TM Law & New Cybersquatting Law

Background

Internet domain names, used in e-mail addresses and World Wide Web addresses, are assigned on a first come, first served, basis. It is possible that someone else may register your trademark as an Internet domain name before you decide to establish an Internet presence. In addition, it has come to our attention that certain "entrepreneurs" are registering a variety of trademarks and trade names as Internet domain names, for resale to the trademark owner at a "fair" price.

Registration of a domain name by Network Solutions, or any other domain name registrar, is no assurance that your domain name will be free from trademark conflicts. Some care should be taken when selecting an Internet domain name.

Summary

If you have not already registered an Internet domain name, and you might like to use one of your trademarks or your trade name in an Internet domain name, I recommend that you register your trademark or trade name as an Internet domain name now, if it is still available.

Comprehensive trademark searching, beyond searching that can be performed using the Internet, should be performed before selecting a domain name, trademark, or service mark, and certainly before any substantial sums of money are expended in advertising a domain name, trademark, or service mark.

It may be wise to also conduct an international search before adopting a domain name, particularly if you choose to employ in your domain name a trademark for which no international search has yet been performed.

New arbitration procedures make it prudent to obtain a federal trademark registration exactly matching your domain name or to obtain a domain name exactly matching one of your federally registered trademarks. The new arbitration procedures also provide an inexpensive manner to resolve domain name disputes in clear cases of cybersquatting, where the domain name registrant registered the domain name in bad faith.

Likelihood of success or failure in the arbitration process does not necessarily bear relation to likelihood of success or failure if the dispute is taken to court.

A new cybersquatting law was signed into effect on November 29, 1999. The new law protects owners of unregistered marks, as well as registered marks and gives trademark owners new weapons against cybersquatters.

Detailed discussion

Internet use continues to grow quickly. Internet domain names are used in both e-mail addresses and in World Wide Web addresses. A domain name traditionally comprised the name of the computer on which the owner has an account. For a commercial entity, the domain name typically comprises the word or characters immediately proceeding ".com" in a Web address or e-mail address. For example, www.patentsusa.com.

An Internet domain name identifies a person or company, and their electronic location, in much the same way that a telephone number identifies you and your location. Domain names, like telephone numbers, must be unique to work. However, unlike telephone numbers, the Internet does not have area codes for different areas of the country to increase the number of times the same number or identifier can be used. Domain names are registered by a service named Network Solutions, on a first come, first served basis. Network Solutions does not perform any investigation to determine if a proposed domain name incorporates a registered trademark. Network Solutions does not perform any investigation to determine if a proposed domain name is confusingly similar to a registered trademark. After a domain name is reserved by registration with Network Solutions, it is taken.

Domain names can be made up of traditional trademarks owned by a company. Domain names are identifying words, and it is very desirable for businesses to use their valuable trademarks or service marks in their domain names. If a company uses its trademark in its domain name, this may make it easier for potential customers to remember the company's World Wide Web address and to access the company's Web page. It is possible to perform a keyword search to find a Web page, but this can often be time consuming.

There are countless examples of identical formatives being used as trademarks or service marks for different businesses. Often, this usage does not create a trademark conflict or infringement because the businesses produce unrelated goods or services. For example, the trademark "Eagle" is used for a wide variety of goods and services. Use of a common trademark may also be possible without a conflict if the businesses have different geographic markets and do not have Federal registrations. However, such concurrent use is not possible with domain names because each domain name must be unique.

Because there can only be one registered owner of a domain name, the first of such businesses to register the domain name will be the owner or holder of the domain name, and latecomers must choose a different domain name. In addition, it has come to my attention that certain entrepreneurs are registering a variety of trademarks and trade names as Internet domain names, for resale to the trademark owner at a "fair" price. Relief is readily available against such activity for "famous" trademarks, such as "McDonalds" or "Coke," under an anti-dilution statute. However, the vast majority of trademarks are not considered to be "famous." Relief may also be possible if trademark infringement can be proved, or by using various other legal theories, or the new cybersquatting law, but this will, of course, cost money. We therefore strongly recommend that you register a domain name if your have not already done so, even if you have not yet decided to establish an Internet presence. As discussed below in greater detail, comprehensive trademark searching (not just Internet searching) should be performed before a domain name is adopted.

Most Internet service providers can obtain a domain name and set up a Web page for you. The service provider will charge you for this Web page design, plus will charge a monthly service fee. Network Solutions will also let you reserve a domain name directly from their web page. There is also a nominal annual fee charged by Network Solutions for maintaining a registered domain name. Alternatively, you may wish to establish e-mail service using your domain name. Check with some service providers for the exact fees that they charge.

If a domain name is chosen that is not an existing trademark of a company, it may become a trademark after some use and advertising. Before adopting such a domain name, some thought should be given as to its likely strength or weakness as a trademark. As you are probably aware, descriptive words or phrases that describe the goods or services you will be selling make very weak trademarks, while coined words or phrases (such as "EXXON" or "XEROX") make strong trademarks. Arbitrary words or phases that don't describe your goods or services (such as "ARM & HAMMER" for baking soda, "CAMEL" for cigarettes) also make strong trademarks, but are not as strong as coined words or phrases.

Before adopting a domain name that is not an existing trademark of your company, comprehensive review or study should be performed to make sure that your proposed domain name is available as a trademark, and to determine whether your choice of domain name will likely cause trademark conflicts with others. If your intended market will extend beyond the U.S., you should conduct an international search, as well as a domestic search. Of course, an international search should be performed before any trademark is advertised internationally, such as on the Web.

If a full U.S. trademark search (including common law sources) has not yet been performed for your trademark, you should probably also perform such a search before using that trademark in your domain name. Because of the international nature of the Internet, international searching should be considered even if your proposed domain name does comprise an existing trademark of your company, if no such international search has yet been performed for your trademark.

A new cybersquatting law was signed into effect on November 29, 1999. The new law protects owners of unregistered marks, as well as registered marks. The new law also protects living persons against unauthorized use of their personal names within domain names, in certain circumstances. Under the new law, a domain holder becomes liable if he or she has a bad faith intent to profit from a protected mark or personal name, and registers, traffics in, or uses a domain name that is identical or confusingly similar to a DISTINCTIVE mark; identical, confusingly similar, or dilutive of a FAMOUS mark, or is a Red Cross or Olympics mark. Factors to be used in determining whether there was bad faith intent include: whether the domain name holder has any legitimate trademark rights, any prior use of the domain name in bona fide offering of goods or services, the domain name holder's intent to divert customers from the mark owner's own site for either commercial gain or to tarnish or disparage the mark, the domain name holder's attempts to sell the domain name without a prior bona fide offering of or intent to offer goods or services or the domain name holder's past pattern of doing so, whether the holder supplied false or misleading contact information when applying to register the domain name or other domain names, whether the holder has acquired other domain names that are the same as or similar to other trademarks, and how distinctive or famous the trademark is. Monetary remedies for wrongful registration or trafficking are: defendant's profits, up to three times damages, costs, and, in exceptional cases, attorney fees. Alternatively, at any time prior to final judgment the plaintiff can waive actual damages and elect statutory damages in the amount of $1000 to $100,000 as the court deems just.

The new cybersquatting law is useful in that trademark infringement does not need to be proven. In the past, unless a mark was famous, a trademark infringement action would normally be considered when a cybersquatter was encountered. However, proving infringement could be difficult if the cybersquatter was not selling any goods or services since trademark infringement analysis requires considering likelihood of confusion taking into account similarity of the goods or services.

The cybersquatting law also prohibits registering a domain name that is identical or confusingly similar to the name of a living person with the specific intent to profit from such name by selling the domain name. The law does not make any distinction between famous people and non-famous people. Remedies for violation that does not rise to the level of a Section 43 violation would be an injunction ordering cancellation or transfer of the domain name, as well as costs and attorney fees.

A trademark owner can now also bring an in rem action against the domain name itself. This can be useful where it is difficult to locate the domain name holder. The new law overturns the holding in Porsche Cars North America Inc. v. Porsche.com. If the trademark owner cannot obtain personal jurisdiction, or sends notice at both the postal address and e-mail address in the registration and the domain name holder does not answer, the trademark owner can proceed with an in rem action against the mark. The suit can be brought where the registrar is located or any judicial district where documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain are deposited with the court (e.g., possibly anywhere if Network Solutions agrees).

In December 1999, ICANN (Internet Corporation for Assigned Names and Number) created an arbitration-based domain name dispute resolution policy. Under the policy, a claimant can institute an arbitration proceeding against a domain name holder if it is alleged that the domain name is identical or confusingly similar to the claimant's trademarked or service-marked name; the domain name holder does not have any rights or legitimate interests in the name; and the domain name holder registered the name in bad faith. ICANN approved three arbitration providers to administer domain name disputes. The only one approved in the U.S. is the National Arbitration Forum which claims to be able to resolve disputes in 45 days. If a cybersquatter is uncooperative, and does not file a response to a complaint, the arbitrator will render their decision based on the complaint, which will likely result in a default judgment for the complainant. The arbitrators' decision is then communicated to the registrar of the domain name (e.g., Network Solutions). The registrar waits ten days, and then, unless the respondent files a suit in court, transfers the domain name to the complainant, assuming the complainant prevailed. During those ten days, the respondent has the option of filing a suit in court. A more detailed discussion of the new arbitration procedure can be found at ICANN's web site and at WIPO's web site and can be launched on-line over the Internet from WIPO's web site.

We can assist you in determining if a domain name has been taken, in performing U.S. full searches or international searches (if not yet performed), in registering a domain name, and registering a trademark, for fees based on our hourly rates, plus disbursements to Network Solutions. Please call us if you wish to discuss your particular situation. The legal fees for this call will be based on our hourly rates. Because of the risk of being served with a complaint, requiring a need to quickly take litigation-related actions to preserve rights, I require a minimum retainer of $10,000 before assisting new clients in domain name disputes.

Conclusion

Select an Internet domain name that exactly matches one of your federally registered trademarks, or obtain a federal trademark registration that exactly matches your domain name.

To be proactive against trademark piracy, register your trademark as an Internet domain name as soon as possible.

New arbitration procedures and laws provide strong tools that can be used against cybersquatters.

U.S. full searches, and international searches should be performed before selecting a domain name.