Naming your company, product or service is an important task. Good branding dictates that names convey who you are and what you provide. "A rose by any other name is still a rose," but consumers remember and recognize you by your name. In addition to branding considerations, there are a host of legal considerations to picking a name. As you may invest considerable time and money in the name you choose, assessment of the legal risks and requirements is important.
The Purpose of Trademark Law
The trademark act, or "Lanham Act," 18 USC Sec. 1051 etc. , is meant to allow consumers to correctly identify the sources of goods or services.
For example, when a consumer buys a pair of Nike shoes, she want to know that Nike made them and they are of the quality and standards that Nike, as a company, offers consumers. Allowing a third party to use the Nike mark on its products, would (a) allow it to easily sell products by taking advantage of the money which Nike has spent on advertising, brand development, warranties and customer service; (b) allow it to offer its products at lower cost than Nike due to lower overhead; and (c) injure Nike because the consumer will associate bad performance of the products with Nike or will try to return products never sold by Nike to Nike and will be angered if Nike refuses to take such products back.
When considering if there is "trademark infringement," the main question a court considers is whether the average consumer would be confused as to the source of the good or service.
What is a Trademark?
A trademark is a word, phrase, symbol or design; or combination of words, phrases, symbols or designs; that identifies and distinguishes the source of goods or services. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product.
Normally, a trademark appears on the product or on its packaging, while a service mark appears on advertising for the services. A "tm" on a product indicates unregistered (common law) trademark rights and an "reg" indicates registered trademark rights.
Trade or service marks are granted in product and service classes. For example, there could be two registered marks for the word Tide - Tide detergent in a class for products and Tide seafood restaurant in a class for food service.
When Do You Get a Trademark and What's Required to Get a Trademark?
You may apply for registration of a trade or service mark after you use a mark on a product on in promotion of a service performed "in commerce." In commerce, simplified, mean for advertising and/or sale to customers. You may also register your company's intention to use a mark prior to its use and the complete application with a sample of its use in commerce.
You are not required to obtain national registration of a trade or service mark. Trademark rights arise upon use in commerce. However, national registration expands and protects your trademark rights, giving your company a legal presumption of first use of the mark in association with particular goods or services.
Since trade and service mark rights are based on use in commerce and priority of use, not every company registers its marks. Trademark rights can be asserted under state and federal law, and registration is not required to bring a lawsuit.
You can conduct a cursory search by looking at the USPTO database of marks and registrations through their website at www.uspto.gov. However, since registration of marks is not mandatory, absence of a mark from the database does not ensure that there are not others with priority of rights to use the mark. To reduce the likelihood of another party asserting prior use in the mark, which may give them greater rights, in the future, your business may want to order a full trademark search.
What Do You Have When You Have a Trademark?
The purpose of having a trade or service mark is to ensure consumers correctly identify the source of your goods or services. Having a trademark allows you to prevent others from using the same or similar mark, with similar products or services in the United States.
If another company uses your mark to sell similar products or services, you can bring a trademark infringement claim against such company to stop its use. You can bring a lawsuit for trademark infringement even if your mark is not registered. When deciding trademark infringement cases, a court considers which company used the mark first, where geographically the mark was used and the degree of consumer confusion with regard to the source of the mark.
Having trademark rights is also important with regard to current law and domain names. Presently, the USPTO will not register a domain name that does not merit trade or service mark rights under traditional analysis. The name by itself is considered merely an address. Thus, it is very important to use your domain name as a trade or service mark in order to ensure retention of the domain name. Trademark owners may be granted ownership of their trademarks through arbitration or court if a party without trade mark or other rights is using their mark -- in other words, trade mark holders can take domain names which utilize their marks from registrants.
Naming a Company
If you are naming a company, a somewhat different analysis applies.
A name of a company is a "trade name" - a name under which a company does business. This may be the actual name of the corporation and/or a "fictitious" business name - a name other than the corporate name under which the company has a license to do business in a state. Both the actual company name and fictitious business name are trade names. Neither name, by itself, is a trade or service mark.
Relationship Between Trade Mark and Trade Name
Although the name of a business, by itself, is not a trademark, if the company uses its trade name as the name of a product or service, then it can be. The USPTO will not register a company name or other term that is not used as a trade mark.
Trade name registrations are the state listings of company names, which are registered to do business in the state - these include corporations and fictitious business name registrations. It is wise to request inclusion of these names when doing your full trademark search so that you do not later discover that you cannot use the name you have chosen in a state in which it is important for your business to do so.
Trade Name Registration
When doing a full trademark search, a thorough search will also include state trade name registrations. Trade name registrations are the state databases of company name which are registered to do business in each state - these include corporations and fictitious business name registrations.
Naming a company is a complex and thoughtful decision. In fact, smart naming be require more thought than you will give to naming a child. However, with your attorney's help, you can lower your risks and choose wisely.