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You should know … Five things entrepreneurs should know about trademarks

Chris Brown

Chris Brown

Editor’s note: In this new column, Missouri lawyer-entrepreneur Chris Brown shares useful legal information for startup founders and owners of small businesses.­

Entrepreneurs cannot ignore trademarks — both in terms of protecting their own branding elements and in terms of avoiding infringing on the rights of other trademark owners. To help, we’ll examine five things that every entrepreneur should know about trademarks.

1. What is a trademark?

A trademark is any mark that can be used to identify the source of a good or service. For example, when you purchase a jacket with a “Patagonia” logo on the tag, you expect that the jacket was produced by Patagonia Inc. (based in California) and not a counterfeiter.

That expectation is the underlying reason we have trademark laws — to prevent consumers from being confused and mistakenly purchasing goods from one company thinking they are coming from another company.

Although many different things can serve as a trademark, the most common are names, logos and slogans. For example, the sandwich shop Jimmy John’s has a very large trademark portfolio connected to its sale of fast food, including its name (“Jimmy John’s”), its logo (the circle with “JJ” in the middle), its slogan (“Freaky Fresh! Freaky Fast!”) and the individual sandwiches it sells (My favorite? The “Bootlegger Club.”). As a result, if you open a fast-food restaurant and sell a sandwich called “Bootlegger Club,” there is a very good chance Jimmy John’s will be able to use trademark law to stop you from using that name.

2. How to pick a good trademark?

Many entrepreneurs choose business and product names that describe their goods or services. This makes sense from a marketing perspective. This is not the best strategy, however, from a trademark perspective. This is because generic and descriptive words are extremely hard to protect. For example, generic words such as “Coaching” (in connection to providing coaching services) are nearly impossible to protect because they are too generic.

What’s better is to choose an arbitrary or suggestive mark. “Uber,” for example, is a great mark for ride-sharing because there is no connection between the mark and the services offered. It would most likely be considered an arbitrary mark. Somewhat related are suggestive marks, such as “Coppertone” for sunscreen. The mark is likely suggestive because it is somewhat related to the goods being sold, but it still requires some leap in the consumer’s mind to make the connection. Both arbitrary and suggestive marks are much easier to protect under trademark laws.

3. How to conduct a search?

Before you start using a name in commerce — and certainly before you apply for a federal trademark registration — you should run a trademark search.

At a minimum, you should search for your preferred mark using the United States Patent and Trademark Office website. It offers a free search tool with which you can search for similar names being used in connection to similar goods and services. For example, before selling computers under the name “Bapple,” you should search the database for that name (and similar names). In doing so, you will find a registration for “Apple” in connection to selling computers, which will likely cause problems for you. (Note that in this case the marks are not identical but merely confusingly similar. See point 5.)

You also should search other sources. For example, it is smart to search for similar names on Google and Facebook, in the Yellow Pages and trade magazines, and more. This is because someone may have trademark rights even without a USPTO registration (see point 4).

As you can imagine, it is hard to run a search on your own. For that reason, you might want to hire a trademark lawyer to help. The lawyer can use the services of a specialized company to search both the USPTO database and also common law sources (such as trade magazines). Moreover, those search companies can run searches on misspellings, phonetic equivalents and more, much faster than you can. The lawyer then can review the results to help you decide if you’ve picked a good trademark.

4. How to protect your trademark?

The first person to use a mark in commerce in connection to the sale of goods or services can claim common law rights to that trademark. The best way to do this is to use “TM” next to the mark to make your claim as clear as possible. There are limitations on the scope of that protection, however, and for that reason, most trademark lawyers recommend you seek a federal trademark registration with the USPTO.

When you apply, you must declare that you believe you have the right to use the mark in connection to the goods and services in your application, and you also must prove that you are actually using the mark (or that you have a bona fide intent to use it soon). The USPTO will examine its database to see if there are any conflicts, and if there are no conflicts, it will allow your mark to register pending a public objection period. If you obtain a federal registration, then you can claim nationwide trademark rights and use the ® icon on your mark to indicate your registration.

In both cases, it is important that you use your trademark only as a noun (and not as a verb) and that you police your mark and send cease-and-desist letters to anyone infringing on your rights. If you don’t, you may lose your rights. For example “Escalator” was once a trademark until it became generic.

5. How to avoid infringing another company’s trademark?

In addition to choosing an arbitrary or suggestive mark, you should choose a mark that is not confusingly similar to an existing name. For example, I mentioned how “Bapple” is likely to be too similar to “Apple” in connection with the sale of computers.

Similarly, you should not pick a name that is being used by someone to sell similar goods or services. For example, there isn’t a conflict with Delta Air Lines using “Delta” to sell air travel and Delta Faucets also using “Delta” to sell faucets because the goods and services are not similar. But if you want to sell bathroom cabinets under the name “Delta”, you likely will run into problems because consumers may be confused as to whether your company is related to Delta Faucets.

Thus, the test is not whether your mark is identical to another mark, but whether consumers are likely to be confused as to the source of the goods or services sold using the mark.

Best practices

Entrepreneurs (and many lawyers) often are confused by the intricacies of trademark law. But it is important that you think about the topic early on in your entrepreneurial journey to make sure you don’t infringe on the rights of others, and to ensure you can protect your own branding elements.

This article is very general in nature and does not constitute legal advice. Readers with legal questions should consult with an attorney prior to making any legal decisions.

Chris Brown represents startups, freelancers and small businesses through his law firm, Venture Legal, in Kansas City. He also co-founded Contract Canvas, a digital contract platform for creative professionals. You can find him on Twitter @CSBCounsel.

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