How to Protect Your Intellectual Property: Trademark Basics

This blog was written as a guest blog post for Element 3.

At Gutwein Law, we want to help educate entrepreneurs on how to adequately protect themselves in the realm of trademark law. This post should help you decide whether trademark protection is something in which you should invest.

What is a trademark or service mark?

Let’s say you have a great phrase you want to start using as a tagline to market your business. Or maybe you have a new product you want to start selling across the United States. Is there anything you should do before using the phrase or product?

First, you should realize that you have a trademark or service mark issue. Here’s what these terms mean:

• A trademark is essentially a word, name, symbol, phrase, logo, or combination of those, that identifies and distinguishes goods from another’s goods. (For example, your product name or company logo is a trademark.)
• A service mark identifies and distinguishes services from another’s services. 

For simplicity, I’ll use the word “trademark” in this post to refer to both trademarks and service marks. You have three options when it comes to your trademarks.

Trademarks can be:

1. Used without registering with the state or federal governments, in which case, as the first user you would have common law protection in a limited geographic area;
2. Registered at the state level, which has more benefits for the trademark owner and protects your use of the trademark across the entire state; or
3. Registered at the federal level through the United States Patent and Trademark Office (USPTO), which provides the broadest rights in the trademark and grants you certain protection and rights throughout the whole United States. 

Trademark search and infringement

What happens if someone is already using a trademark that you want or is close to what you want?  

I recommend a trademark search to determine if a mark is available for your use because as soon as a company starts using a trademark, the company also starts accruing common law rights in the trademark with regard to its class of use (the kind of product or service it is used for). Superior rights through common law use or state or federal registrations can lead to a trademark infringement lawsuit against subsequent use of the same or a similar mark.

The cornerstone of trademark infringement is “likelihood of confusion” – meaning generally whether your use of the same (or a similar) trademark as someone else creates a likelihood of confusion for consumers as to the source of goods or services being provided. 

For example, if you and Nike® both put the same (or a similar) swoosh on shoes, would a potential buyer be able to identify who made the shoes? Probably not, so there would be potential liability for trademark infringement. “Likelihood of confusion” is based on analyzing various factors, including the similarity of the marks and the relatedness of the goods and services that bear the marks. A trademark search can reveal “likelihood of confusion” problems that may cause a company to tweak, change, or eliminate a proposed mark to avoid incurring liability.

Reputable trademark attorneys will be well versed at performing trademark searches and analyzing the results. There are also businesses that do extensive trademark searches covering all fifty individual states, the USPTO, and common law uses. These businesses will put together the search results, usually in a binder several inches thick, and then the businesses will have an attorney review the report and determine whether there is a likelihood of confusion with any registered or common law trademarks.

If there is no likelihood of confusion issues from the trademark search, you may then use your desired trademark with a “TM” symbol for trademarks or “SM” symbol for service marks and begin accruing common law rights. If you want more protection, you can then file for state or federal trademark registration.  

The benefits of federal trademark registration

While the process for obtaining a federal trademark registration takes longer (generally at least a year if the process goes fairly smoothly) and is more expensive than a state registration (with a current filing fee of $325 per class at the USPTO compared to, for example, an Indiana filing fee of $10 per class), the benefits of federal registration far outweigh these negatives.

There are many advantages to federal trademark registration:

• You can essentially reserve a trademark before you start to use it by filing an “intent-to-use” application. However, you must begin using the trademark in commerce and pay an additional fee before the trademark will actually be registered.
• You are allowed to use the federal registration symbol (®), which puts the public on notice that the trademark is registered with the federal government.
• There is a legal presumption that you are the owner of the trademark and that it is valid.
• You have the exclusive right to use the trademark in connection with the goods or services listed in your registration throughout the United States.
• You gain the ability to bring a trademark infringement lawsuit in federal court and possibly collect attorney’s fees and treble damages.
• You receive the right to record the registration with the U.S. Customs and Border Protection (CBP) Service to help prevent infringing foreign goods from being imported into the United States.
• It acts as a basis for obtaining trademark registration in foreign countries.

If you want to market your product or business outside of your immediate locality, trademark registration is the way to go to protect yourself from competitors.