Picking a name for a business or product is one of the first steps for any new venture. However, many companies don’t register their trademarks during the start-up phase, usually waiting until a later time when sufficient cash is available if registered at all. That decision is a bit of a gamble. In reality, businesses should prioritize trademark registration for their brands or company name because the potential consequences of failing to timely register a trademark can be severe. Take a look at the five points below to see why.
Your Trademark rights: First we need to look at what you get if you have a registered trademark for your brand. Registering a trademark gives you the exclusive right to use that mark for your products or services, which includes the right to keep others from using that name for those same products or services. If multiple companies are selling the same products with the same brand names, consumers won’t know what they are really purchasing or from whom they are purchasing. The term used in trademark law for this concept is “likelihood of confusion” or “confusing similarity.” Additionally, it would be unjust for a company to expend resources to build up a brand only to find another company that enters the market with the same type of products and brand name, generating revenue based on your hard work. In that way, it is similar to copyright protection.
However, the right only applies to the types of goods or services that are registered for that name. The name does not apply to all products. If your trademark is for a line of clothing, another company can still use that name for its tractors. Also, a trademark is limited to goods or services being produced now, not ones you are thinking about for the future. We wouldn’t want trademark squatters to hold trademarks n the way that domain name squatters do, trying to sell them to you at exorbitant prices. Yet, we also don’t want to lose a trademark for a product that we are planning on making in the near future. The United States Patent and Trademark Office (USPTO) does allow, for a limited time, the ability to hold a name for future goods or services by filing an “intent-to-use” application. While it is active, others cannot register a trademark for those goods or services, but you also do not have the exclusive right to the trademark. So, you cannot stop someone from using the name. Once you offer that product for sale and prove to the USPTO that your business is genuine, you can receive the trademark and stop others from using it.
Trademarks protect more than just the products you make or the service you perform. The USPTO manual of goods and services encompasses thousands of items, which all fall into only 45 Classes; 34 for goods and 11 for services. Registration fees are per class, not per goods or service. While you or your company may only produce a few goods, the security trademarks afford can encompass far more. Remember the idea behind the likelihood of confusion by consumers? Well, confusion doesn’t happen just with the products you make, but also with the kinds of products made. This concept is best illustrated by an example: Imagine your business, Arterrific, has a registered trademark for art products like gouache, watercolors, and brushes (that are all in Class 16 – Paper goods and printed matter). Assume another company starts selling a line of easels. You do not sell those products, and your trademark list of goods does not mention them. Still, customers might be confused that your business makes those easels because easels are a logical business extension. Many of those sales are made, not only by people thinking it is your product but due to the reputation that you spent years building. Let’s take this idea a step further; say those easels were horribly made, sparking a series of consumer complaints. That may have an effect on your company’s reputation. So even though you do not make easels, you can still stop the other company from using your trademark on their easels.
Securing your trademark protects your name and provides considerable protection as your business grows.
Trademarks also protect similar names. Again, this goes back to the likelihood of confusion. Similarly spelled or pronounced names do not necessarily make them different because consumers may still be confused, resulting in purchasing products to the benefit of another company. If you start an online photo-sharing service called Flikker, Flickers, or Flicksters, you will likely receive a cease-and-desist letter from Yahoo, owners of Flickr. If you try to register any of these names, they will not be approved. Even more problematic is that companies, like Yahoo, subscribe to automated services that watch for trademark applications with similar goods or services or similar sounding names. As soon as your registration becomes public, Yahoo will be alerted to your existence and oppose your trademark or send you a cease-and-desist letter.
Trademarks should be at the forefront of business strategy. Imagine that you have built up a reputation for your art gallery in your local city, and unbeknownst to you, another gallery with the same name opens in another city. The other company decides to trademark its name and over the years, begins to grow. Five years later, they open a gallery in your city and discover that you are already there. You are hit with a trademark infringement lawsuit. You try to mount a legal defense, but in the end, are forced to change your name. Along with the cost of a legal defense, you have to change everything from signage to stationery, as well as the loss of any value or goodwill you built. Trademark infringement letters are common as are infringement lawsuits. If your business takes the time and resources to choose a brand name and build its business around that brand, why gamble? Registering your trademark protects your brand name and provides security as your business grows.
One last point: Don’t use cheap services to obtain your trademarks. We all know that lawyers are expensive and that those looking for trademarks are often start-ups or individuals with limited resources. The tendency will be to turn to inexpensive ways to get things done, such as using generic legal websites like Legal Zoom. If at all possible, find an intellectual property attorney to file your trademarks. Trademark applications can be tricky and require someone with experience to obtain the broadest possible protection. Also, trademarks submitted by attorneys are approved far more often than those submitted by non-attorneys. If money is truly a problem, you can shop around; a local attorney is not necessary. Any Intellectual Property attorney can handle trademark registrations regardless of where they are located.