Considerations in choosing and applying for trademarks to maximize income and help reduce liability

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1

Choose a name to build value in the long haul

Choose a name for your product or service which is: (1) Not Descriptive of ANY aspect of any goods or any services (2) Not Suggestive (Stink Test: if you told a stranger the product/service name and they can't guess what it might be, you may have a good mark.) (3) Not a Geographic or Place name (4) Not a government symbol, flag, coat of arms, etc. or scandalous name (5) Preferably not even a dictionary word, nor a word which is easily parsed into dictionary words. Beware of letting Marketing and Ad companies choose your mark. Although they may provide good marketing and ad copy for what you pay them, it has been my experience that they are adept at finding obscure marks owned by other people. In one case, on the recommendation of a marketing company we did 3 full searches, and every one turned up an obscure record which would have cost the adopter thousands and more to litigate.

2

The purpose of a trademark is to build wealth for you.

Keep in mind that the PRIMARY object of the game is not to be "cute", "catchy" or "sexy", but that you are choosing a vessel to hold your goodwill, so you can make a lot of extra money (especially at low capital gains rates) on sale of the business. The goodwill is virtually always assigned to the trademark, so if you have a weak or unprotectable mark, no buyer is going to pay you a full value for your business, products, or services. This is about PUTTING MONEY IN YOUR POCKET AT THE END OF YOUR WORK LIFE, not about seeing how much money you can spend arguing with and litigating against other holders of cheesy trademark names. Adopt the "buy low and sell high" approach.

3

Bad marks will make you bleed

How? (1) If your mark is similar, the money you spend on advertising will end up in your competitor's pockets. (2) Others constantly use descriptive marks and you will be litigating against them if you follow their lead. (3) An unusual mark like the Exxon mark chosen by Humble Oil has a significant higher capacity for good will than a descriptive term or a dictionary term. (4) Expenditure to "defend" a mark is typically not deductible. For each dollar you spend defending an ill chosen mark it will cost you $1.50 depending upon where you live. (5) Unusual names cause the reader of your advertisement to "pause" in trying to unwind the word and figure out what it means. An advertising campaign may be many times effective for the money spent as people tend to try and "divine" the elements of a mark which can result in "burning it into their memory". It can make your unusual trademark an unusually well remembered trademark.

4

Your trademark should not be a logo or have anything other than ordinary letters

Ideally go for the name by itself, and the logo by itself (apart from any words as a second trademark. Separate the plain name trademark from a non-name logo. Name logo combinations are generally quite weak, and it is better to use a regular trademark to fully protect the name (sequence of alphabetic letters) and a second mark to protect the logo by itself, even if another name or no name is used in conjunction with it. Combining words with a logo also tends to invite the Trademark office to require you to disclaim some of the words in a combination logo mark moreso than a plain typewritten mark. Logo marks almost say: "I'm not interested in protecting this word, but only when it is placed exactly like this logo". Don't do differential capitalization, it weakens the mark, as does any special symbols characters or weird font.

5

Keep in mind the inherent liability of trademark ownership

Ownership of a trademark is the entity that specifies the nature and quality of the goods. An individual can own and license a trademark and become liable for product defects sold under that licensed trademark even where the mark owner never manufactured or owned the product in commerce. This means that every product and trademark should be owned by a business entity where liability can arise which can be protected by a separate entity. Although not 100% possible, the majority of products and services should be protected by a mark owned by a business entity. Consider also insurance to help protect the business entity, and especially product liability insurance and trademark advertising insurance.

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Summary. Choose the trademark well. Starting over with a new trademark can be devastating

I spend the bulk of my trademark time urging potential new registrants not to make the above mistakes. Often the telephone questioner will be held in the death grip of an obsession about someone else's mark or a descriptive mark. Remember, when you are starting out, YOU are the little guy and you have to carve a high quality niche for yourself. The product + quality you put in it drives the good will. Even goofy name will eventually take on the mantle of quality you instill in the product or service. But even the catchiest, sexiest name in the world can't save a lousy or poorly maintained product. If you get a "cease and desist" letter because you were thoughtless in choosing your trademark, it will be painful to change. If you choose a good trademark and have good insurance, you will be able to face a "cease and desist" letter (if you should ever get one), with a better set of options than to simply do the trademark owners bidding instantly.

Additional Resources

PATENTAX LIBRARY

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