TL;DR
Trademarks function as identifiers of source, allowing consumers to distinguish one seller’s goods or services from those of other seller offering the same type of product. A product brand is the most common type of trademark, which may also be called a service mark where services are being provided.
These trademarks identify a single provider of goods or services even if the consumer does not know what the actual business behind the brand is. The trademark itself is enough to assure the consumer that they are getting the same product as they encountered or learned about at some earlier time.
There are also two other types of trademark. Trademarks like ROTARY, VFW or the names of college fraternities are called collective membership marks. These marks identify membership in a particular organization.
Trademarks like UL in connection with electrical products, SWISS in connection with chocolates or the “Restricted” label at the movie theater are called certification marks. These marks indicate that the goods or services they are used with meet some requirement set by a particular certifying entity.
Trademarks used as brands should not describe the branded goods or services. At best trademarks that describe the provided product do a poor job indicating source. Consumers encountering such a mark are likely to think the mark identifies the type of product rather than a brand for the type. This is especially true when the encounter spoken. Even if a descriptive mark becomes protectable the protection afforded the mark is relatively weak, and will never prevent a competitor’s use of the term to fairly and accurately describe the characteristics of their own goods or services.
Virtually anything that is capable of functioning as a trademark can be used as a trademark. To function as a trademark, the mark must simply be capable of distinguishing the owner’s goods or services from those of the same type offered by others. This goes well beyond words to include symbols, graphical designs and other logos.
Qualifying trademarks also include such things as shapes or colors of products or product packaging, particular scents, and sounds, but all of these have additional requirements beyond what is required to protect more traditional marks.
In selecting good trademarks, it is important to keep in mind that the strongest trademarks say nothing about the qualities or characteristics of the branded goods or services. These marks say only that the product comes from the brand owner, and it is the brand owner’s reputation that speaks to the qualities and characteristics of the product. As such, the marks are easily recognized as product brands and are also given the broadest protection.
Within these guidelines, it is most important to select a memorable mark that will gain the attention of target consumers. With a mark selected, it is generally a very good idea to have the mark evaluated by trademark counsel and to obtain an opinion regarding registrability.
Trademark rights are created by use of the mark on or in connection with goods or services, and the value of the trademark is a measure of consumer goodwill obtained through use of the mark. The full extent of protection given to these fundamental rights, however, is only attainable through registration. In general, registration increases the value of the trademark by ultimately ensuring that the owner will be able to continue to use the mark indefinitely.
Registration also facilitates enforcement of the trademark by providing evidence of the owner’s rights, and with time federal registration can preclude challenges to those rights. Federal registration also qualifies the trademark for protection at the borders, enabling U.S. Customs to seize infringing goods before they can enter the United States.
An often underappreciated value is the public record that is created by trademark registration. Any sizable business will generally conduct comprehensive searches of the public records before adopting a mark for use. These businesses will almost always avoid using a mark that is already claimed by another. As a result, the public record prevents disputes from ever arising.
Registration is very important and even critical to some business transactions. For example, trademark rights are central to franchising opportunities. In many cases, it is the trademark rights built up over time that provide the value of a business.
Rather than starting anew, a buyer may wish to purchase an ongoing business to obtain established manufacturing lines, an experienced workforce or a prime location. It is the trademark, though, that provides an established customer base. In a case where the sale of a business at some future date is contemplated, it is very important to obtain registration of the associated trademarks as soon as possible in order to fully vest the benefits of registration, providing the buyer with some assurance that the trademark rights are sound.
The value of a trademark is the goodwill consumers have for the business, and ownership of the mark must never be separated from the goodwill. Because of this, the transfer of trademark rights must be handled correctly to avoid abandonment of the trademark rights on transfer. If purchasing a business in a transaction including trademark rights, the advice of trademark counsel is strongly recommended.
A proper application is required to obtain registration of a trademark, whether at the state level or federally. Although the process itself is relatively straightforward, the details matter. Failure to select the best version of the mark may result in a registration of limited scope. Failure to properly identify the goods or services, on the other hand, can derail the application process. In a worst case scenario, such a failure to properly identify the goods or services can result in a defective registration that later cannot be maintained or is found unenforceable.
In any case, the application will be examined to determine whether it is in proper form and is supported by the evidence showing use. The examination will also include a search of the trademark records by the examiner, who will make a determination whether the mark is so similar to the mark of another that it is likely to confuse the consuming public. If so, the application will be refused and the applicant will be given a deadline for response.
If all is in order a Texas application will immediately register. In a federal application details of the application will be published to allow others the opportunity to oppose the registration. If no opposition is filed, the application will continue toward registration.
International trademark protection can be sought if the owner of a trademark intends to conduct business in any of over 120 countries. This option requires the applicant to have either a pending U.S. trademark application or an in force trademark registration. It also requires the applicant to have a connection to the United States. A national application of a foreign country may also benefit from an earlier filed U.S. application or an existing U.S. registration if action is taken within prescribed time periods.