By Joshua D. Freeman
One of the most important means to maximize your company’s value is by using a strong and defensible trademark to brand your business. It is critical to have clean and defensible intellectual property rights to protect and maximize the value of your business. What goes into a strong and defensible trademark?
Step 1: Choose a “Fanciful or Artful” Brand for a Strong Trademark
The strength of a trademark depends on how the name relates to the goods and services you provided. Trademarks can be categorized from strong to weak in the following:
1. Fanciful or Artful (Strongest)
2. Suggestive (Strong)
3. Descriptive (Weak)
4. Generic (Weakest)
Fanciful and Artful. Fanciful isn’t usually a goal in business, but when branding and in a trademark it is ideal. A fanciful or artful mark is a mark that has nothing to do with the goods or services being sold. For example, using the word “Orange” to brand a content marketing company. Or, as one successful company has done, using the name “Domo” for a business intelligence company.
Suggestive. Suggestive in the context of trademarks does not refer to “suggestive” music or television content like my grandmother told me to avoid as a young man. In trademark law, a suggestive mark is one that suggests a characteristic of the goods and services being sold. For example, Little Caesar’s Pizza’s mark “Hot and Ready” is a suggestive mark of the characteristics of the pizza they sell.
Descriptive. Descriptive marks are similar to suggestive marks but are even more literal in their description of the good or service being sold. Selling hot sauce under the mark “Spicy” is an example of a descriptive mark.
Generic. Generic marks are those that literally identify the goods and services being sold. For example, the mark “Car” for the sale of cars would be a generic mark. Generic marks often are refused registration as a trademark.
The take home message here is to brand your business using a “fanciful or artful” mark—something that is catchy and unrelated to the goods and services that your business sells.
Step 2: Determine if There is a Likelihood of Confusion with Another Mark
Now that you have a fanciful and artful brand, the next step to have a strong, defensible mark, is to determine whether your mark is going to encounter possible confusion with another trademark. Under trademark law, two different businesses may have identical or similar marks so long as they don’t sell the same goods and services. So, the overlap that you are looking for is two fold: (1) whether the marks are the same or similar; and (2) if the names are the same or similar, do the companies sell similar goods or services.
Trademark Search. To determine whether your mark is the same or similar to another’s, you need to search for other companies with a similar name or mark. This is done by searching the following databases:
1. TESS Database on the United States Patent and Trademark Office website (USPTO). Hereyou can both identify if there are similar marks and determine if there is an overlap in the goods and services sold under the two marks.
2. Online Google search for prior use.
3. State Trademark registries usually on the State’s Secretary of State website.
4. Business name databases and registries usually on the State’s Secretary of State website.
A trademark search can be a complicated and long process. One tool available to simplify the process is to have LegalZoom or some other third party trademark searcher conduct this search for you. Hiring help is usually a cost effective way to gather all of the information that you would want your attorney to review to determine whether there are issues facing registration of the mark.
Similarity of Marks. In conducting a trademark search, the spelling of the brands or names is not the only important factor. The following are additional factors to consider:
1. Spelling of Marks
2. Sound of Marks
3. Appearance of Marks
4. Meaning of Marks
5. Commercial Impression Given by Marks
Sound of Marks. Spelling of marks is self explanatory, so I’ll move onto the next. If two marks sound the same, then there could be a likelihood of confusion. For example, if I want to register LWYR but there is already a Lawyer mark, I will likely run into issues for the marks sounding the same if there is an overlap in goods and services between the two marks.
Appearance of Marks. This issue usually rears its ugly head when logos are being trademarked and the two logos are not identical but resemble each other. An example of this is a logo that resembles the superman logo with a different letter or different style, but appears similar.
Meaning of Marks. Two marks will be considered the same or similar if the two marks used are not the same word but have the same meaning. This usually comes up when a word in another language is used. For example, “Wolf Chicken” would be considered similar to “Lobo Chicken” because Lobo means wolf in Spanish.
Commercial Impression. The USPTO may consider two marks that give the same commercial impression to a consumer to be confusingly similar. For example, “Wild Boy Boxers” may be considered confusingly similar to “Crazy Man Boxers.”
Here is the take-home message: These are nuanced issues and in reviewing and working through these issues is where attorney’s fees are worth their while.
Step 3: Register and Enforce Your Mark
The final step is to register your mark with the USPTO. After registering with the USPTO, all you have to do is brand away, and enforce your mark by stopping imitators from using similar marks that will dilute the strength of your mark and brand.
Registration. You should always register your mark with the USPTO. The following are some of the numerous advantages to registering your mark:
1. Legal presumption that your business owns the mark and exclusive rights to it (this will save you a ton of money if you have to file suit to enforce your mark).
2. Public notice of your trademark and brand.
3. The ability to record with U.S. Customs & Border Protection to prevent importation of infringing foreign goods.
4. Your ability to use the official trademark symbol on your marketing and advertising materials.
5. Ability to bring lawsuit in federal court to enforce your mark.
6. Ability to use U.S. registration as basis for foreign registration (as you expand internationally, this will save you a lot of money as well).
Enforce Your Mark. The final step to maintaining a strong, defensible mark is to enforce your mark when imitators emerge. Part of keeping your mark strong and defensible is to preserve your mark undiluted by other people using the mark in an unauthorized manner. The more that the mark holder permits the unauthorized use of the mark, the more difficult legally it is to enforce the mark and stop other people from using it. For that reason, the best practice is to have an employee regularly search online for unauthorized uses of the mark, and if any such use is found, to quickly send cease and desist letters to those parties using the mark.
Conclusion. Creating a brand worth buying requires that you have a strong, defensible trademark. The stronger the mark and the brand, the higher the value and larger the multiplier you are going to be able to negotiate with a potential buyer. When there is value in your business name and not just in the assets themselves, the more you will get paid for your goods or services.