Why you Need to Create a Strategy For Protecting Your Trademarks

Most people who start a business have a general idea about trademark law, at least in the abstract, but are woefully unaware of the nuances and practical steps required to develop a coherent trademark strategy.

What is a trademark? How does one obtain a trademark? What’s the purpose of a trademark? When do I need a trademark? This article will consider the importance of trademarks and the requisite steps to build a trademarkable brand.

WHAT IS A TRADEMARK?

A trademark may represent a combination of designs, sounds, words, letters, or other unique elements which when used with the sale of a product or service, distinguishes the source company of that product/service. A creative trademark makes it possible for a new business to garner attention and stand out among competitors.

Consider for the moment the word, “TESLA”. Of course, we all know that Nikola Tesla was the brilliant inventor responsible for various breakthroughs in electricity and yet now, TESLA is a name that immediately summons to the mind’s eye Elon Musk and the electric car.  This mental association is the result of a powerful branding initiative by Musk and the effectiveness of the trademark, TESLA.

Thus, in its purest form, a trademark serves the fundamental purpose of allowing a consumer to observe a product labeled with a given name/logo and understand immediately which company is behind the sale of that product. Depending on the beliefs and feelings one has about that brand (perhaps a car enthusiast thinks TESLA is technology rather than car company), one will either be more or less inclined to purchase the product because of the thoughts/feelings one has about the brand.

Once a business owner has obtained trademark rights, he/she can prevent a competitor from using the same trademark or even a similar trademark in conjunction with the sale of similar goods/services.  How do you know if a competing trademark is “too similar”? Trademark law uses the “Likelihood of Confusion” test which simply says that if a consumer is likely to confuse a Trademark B with an already existing Trademark A, Trademark B is too similar to Trademark A and therefore an infringement on Trademark A’s rights. The owner of Trademark A then has the right to sue the owner of Trademark B and stop him/her from using Trademark B.

So, if a new Car company decided to name its flagship vehicle, “TESKA”, it very likely would be infringing on TESLA’s trademark rights. Why? Because despite the fact that TESKA is slightly different than TESLA, the broader commercial impression of the word is not changed by merely swapping in a letter “K” for the letter “L” and the public would likely be confused about the source company of this new vehicle, believing that the TESLA company produced it rather than the new startup.

Trademarks are so supremely important and valuable because once they have acquired enough good will and commercial recognition, the trademark begins to be the marketable asset, rather than the goods. Do most people really understand what’s so innovative and technologically impressive about TESLA? Of course not. But they don’t need to.

People believe that TESLA is innovative and creative because of the power of the brand and without doing any further research into the company’s vehicles, are ready and willing to purchase a car because of the name, TESLA.

This notion of buying because of a company’s name, rather than because of the company’s product, is truly the essence of trademark law and is what all companies must aspire to when building a brand identity.

TIPS FOR ENSURING TRADEMARK AND BRANDING SUCCESS

To ensure your trademark(s) achieves its full potential and can accrue the greatest degree of protection possible, consider following the 7 tips outlined below.

1. Prioritize Trademarks that Give You a Competitive Edge

Developing a coherent trademark strategy may seem a bit overwhelming because burgeoning companies often have many different prospective branding assets that may warrant trademark protection.

While it goes without saying that a company should trademark the name of its company, it is less obvious how businesses that sell tens or even hundreds of products should develop a trademark strategy that is efficient and cost-effective.

For example, imagine for the moment that your company is in the business of selling high-end fountain pens, and in your current product line, you offer 15 different styles of pens. Each pen has a unique name and story which you created to help differentiate one pen from the next. Unfortunately, your business has only opened six months ago and you are not yet profitable.

While you may be tempted to think that you need to immediately apply for trademark protection for the name of each individual pen, the reality of course is that this would be a tremendously expensive undertaking.

The government filing fee for each trademark application would be a minimum of $225.00 and the legal fees an attorney would charge would surely be an additional couple of hundred dollars per trademark application.

To keep your expenses down, consider focusing your attention on trademarking the products or services that have the most value. Your business name and logo are certainly top priorities but as a secondary matter, identify which, (in our example) pens are likely to be most popular and can yield the highest profit margins. If one pen, in particular, is a flagship item, trademark it!

Finally, keep in mind that there is no law, which states that you have to submit a trademark application, and indeed a trademark may be registered with the USPTO at your discretion. Therefore, instead of filing all of your trademarks at one time, wait until you have first achieved some commercial success and can better determine which names work and which do not.

2. Select a Trademark Name That Is Distinct

While there is a natural inclination to name a company or product with a word that actually describes the nature of the company’s services or a feature of the products it sells, this intuition is actually misplaced. A central principle of trademark jurisprudence is that a trademark must be sufficiently distinct and original, given the products/services sold under the trademark.

This actually is quite logical; the point of a trademark is ultimately to identify the source company behind the product/service sold under the banner of the trademark and if the trademark is simply a generic word which describes the product/service, a consumer will not understand which company is behind the product. For example, suppose a new Coffee company wanted to call itself, “Coffee Beans”, and applied for a trademark with the USPTO.

Well, because this company is actually selling coffee, this trademark merely describes the product and therefore cannot serve as a source identifier; A consumer who observes this company’s sign with the words “Coffee Beans” will have no idea which company is behind the product because all coffee companies, in fact, sell “Coffee Beans” in some form or another. This trademark application would undoubtedly be rejected by the USPTO.

Contrast this with “Starbucks”; Starbucks is a meaningful name that allows a consumer to understand that the coffee that he/she is about to drink is from a specific coffee company, namely, the Starbucks Corporation. Tethering a product to a specific source-company is the essence of trademark law.

3. Search Early for Trademarks to Check Your Trademark’s Availability

To make sure that you can legally use your prospective trademark, perform an early search of the trademark in the USPTO, and check for conflicting marks assigned to similar goods/services.

Remember, trademarks which may cause a “Likelihood of Confusion” with existing trademarks are an infringement of the senior-trademark’s rights and will therefore be rejected by the USPTO. Therefore, a trademark search should be performed before you invest in product launches, advertising, and promotions and should be guided by the understanding that your prospective trademark is both distinct and novel.

It is much costlier to rebrand after receiving a trademark rejection letter from the USPTO, or worse, a Cease and Desist letter from a trademark holder,  than it is to conduct a trademark search before you begin launching your product.

4. Develop Your Brand With Future Commercial Objectives in Mind

What are your business’s future goals? When you file a trademark application, you should consider both your current products/services and those you plan to launch in the future.

Why?

It is important here to take a moment and reflect upon a common misconception about trademarks. When one files and obtains a trademark registration, he/she does not obtain the exclusive right to use the trademark in every and any capacity imaginable. Instead, Federal trademark rights extend only to those items which are actually listed in the trademark application and used in interstate commerce.

So, if your trademark is “ABALOL” and in your trademark application, you only listed the goods “Pants, Shoes, Hats”, another applicant has every right to file a new trademark application for “ABALOL” for the goods, “Pans, Cups, Plates.”

Critically, the goods/services listed in your original trademark application cannot be added to at a later date.

For instance, if your original trademark application only included Apparel and eight months after you filed the application you decided that you wanted to also sell Pots and Pans under the banner of your trademark, you would need to file an entirely new trademark application.

Therefore, please think carefully when filing the initial application about your future commercial objectives. A good rule of thumb is that if you intend on selling a new product line within a year of filing an initial trademark application, it is worthwhile to include that additional type of “Good” within the trademark application.

At this point, the astute reader may be wondering, “Don’t I have to Use the Trademark in Commerce in order to obtain a trademark? What if I’m not selling anything yet?” The USPTO in its infinite wisdom understands that Startup companies.

5. Review and Target Foreign Markets

The trademark you register for a product will only apply to the laws of the country where you sell the product. Therefore, you cannot register a trademark in Canada and expect it to cover the U.S. as well; If, as a Canadian business, you want to protect your trademark in the United States you must register a trademark in the United States Patent and Trademark Office  (USPTO). Simply, as you develop your business model, please anticipate future foreign markets and apply for trademarks in each country where you currently do business as well as those countries where you expect to do future business.

Developing trademark protection across the European Union is presently perhaps among the most popular target markets for US expansion, in large part because of the ease with which a US Company can secure trademark protection across the European Union.

Why?

Because rather than applying to each Trademark Office in each respective European Union Member-State, a trademark applicant can file just one trademark application to the European Union and have it cover all EU Member States. This is a massive advantage in both time and financial output. So, how does one apply for a trademark to the EU? Well, the easiest way is to use the Madrid Protocol.

The Madrid Protocol is governed by an international treaty that allows member-states to centralize the trademark application process. If you are a US company interested in obtaining a trademark across the EU, you will first need to apply for a trademark in the USPTO and then submit a Madrid Protocol trademark application, designating both the foreign language you’d like registered with the application and the goods/services to be covered. Then, submit the EU Gov. Filing Fee and voila! You will have the exclusive right to use your desired trademark across the EU!

6. Scope Out the Availability of Domain Names or Social Media Names

Besides vetting trademark availability through the USPTO, it is also useful to review the availability of domain names or social media names that align with your trademark.

By securing complementary domain names or social media names, you can strengthen branding for your company. Doing so will also prevent squatters or infringers from grabbing the names up before you can use them. Conversely, if your desired domain names/social media handles are not available, it may be worthwhile to pick an entirely different and new trademark.

7. Enforce Your Trademark Rights

A key feature of trademark law is the mandate for a trademark holder to enforce his/her trademark rights. This is indeed a proactive mandate and demands upon trademark holders the affirmative duty to patrol for any instances of trademark infringement. Failure to enforce trademark rights against misuse by competitors may potentially result in the weakening and ultimately the abandonment of one’s trademark.

How do you know when your trademark has been infringed upon? Remember, as we discussed earlier in this article, the threshold question for trademark infringement is “Likelihood of Confusion”.

When viewing the competing trademark and the products sold under the mark, would a consumer mistakenly believe that the product is actually sold by your company? Or, in another form, is there a Likelihood of Confusion as to the source-company of the product sold under the competing trademark? If the answer is yes, the competitor has likely infringed upon your mark.

The first step towards an enforcement action is the drafting and delivery of a cease and desist letter sent to the infringer.

The purpose of this letter is both to alert him/her that infringement has in fact taken place and to demand that he/she stops using the trademark.  Hopefully, the cease and desist will be scary enough to compel your competitor to stop using your trademark but if it isn’t, you may very well need to commence an action with the courts by filing a lawsuit.

If you prevail, the court will likely issue an injunction to stop any further infringement and if you are especially fortunate, compensate you with additional damages and attorneys’ fees.

TRADEMARKS ARE THE CORNERSTONES OF A SUCCESSFUL COMPANY

At the end of the day, trademarks are critically important assets for any business to cultivate and protect. In developing a trademark strategy, select a name that is unique and distinct to your brand identity.

Conduct your due diligence before committing to a specific trademark by running a search in the USPTO database and screening for excessively similar marks, registered for excessively similar goods/services to your own.

Consider an international trademark strategy that includes filing trademark applications in foreign countries that you intend to do business in.  Finally, enforce your trademarks against those who infringe upon your proprietary rights to your brand identity.

Have you ever created a strategy to protect your trademarks? Please, if you have something to share with our readers in this regard, leave comments below the post. It will be very useful to exchange experiences.

We wish you good luck with your business!

Author’s BIO: Lori Wade is a journalist from Louisville. She is a content writer who has experience in small editions, Lori is now engaged in news and conceptual articles on the topic of business. If you are interested in an entrepreneur or lifestyle, you can find her on Twitter & LinkedIn. She has good experience and knowledge in the field.