What's in a trademark?
This article is for informational purposes only. It should not be construed as legal advice for any individual matter, nor does it create an attorney-client relationship between you and the author or the publisher. Guidelines pertain to U.S. law only.
In everyday parlance, the intellectual property terms "trademark," "patent," and "copyright" are used interchangeably. For brand strategists and managers, it is prudent to discern one from the next and, specifically in relation to building brands, understand what it really means and requires to "trademark" something. Let's start with what a trademark is not.
A trademark is not a patent. Patents protect novel, useful, non-obvious innovations comprising eligible subject matter. While these terms have precise definitions, patents generally cover inventions. When the U.S. Patent and Trademark Office (USPTO) approves a patent application, the patent owner gains the right to exclude others from making, using or selling the invention.
After the patent expires—though various factors can alter the term, it starts today at 20 years from the filing date—anyone can use the erstwhile patented invention.
A trademark is not a copyright. Copyrights protect original expressions of an idea, though not the idea itself. While authors are not required to submit materials to the U.S. Copyright Office to gain some protection, a registered copyright proves that the author created the work covered by the copyright and provides the author the exclusive rights to reproduce, distribute, display and perform the work. Copyrights last for at least the author's life plus up to 95 years. After the copyright expires, the material lapses into the public domain, permitting anyone to use it.
A trademark is not a trade secret. Trade secrets protect information not generally known or reasonably ascertainable by others, from which a business can obtain an economic advantage over competitors. They often embody processes, methods or formulas, such as the Colonel's 11 secret herbs and spices. No federal statute or administrative body regulates their recording or use. Unlike for patents, competitors may reverse engineer or otherwise make their own version of trade secrets, though the secrets may not be misappropriated and never expire as long as they remain confidential. Companies can develop brand equity through trade secrets because they frequently comprise the heart of the company's differentiation from its competition—everyone knows who sells the 11 secret herbs and spices, even though we don't know which seasonings they are.
So, what are trademarks? Trademarks indicate the source of goods or services to the public. Trademarks are a consumer protection mechanism, ensuring that customers don't mistakenly acquire an item because it bore a confusingly similar mark to another product. This is a twist on the other IP forms, which benefit the items' creators.
That said, federal trademark rights greatly aid mark owners. Federal trademarks furnish the exclusive right to use that mark in connection with the goods and services listed in the registration. Like any other asset, trademarks create revenue streams through sales or licensing. Further, trademarks engender goodwill with consumers. As Jerry Seinfeld quipped of sports fans, we're all rooting for laundry—team names, colors, and logos. Strong brands, and the trademarks that express them, distill the intangible characteristics businesses provide to their customers: quality, luxury, efficiency, value, authority, altruism, strength, or about a million other abstract ideas. Because registrants exclusively control trademarks, consumers come to associate each mark with the reputation of its owner. The most successful businesses harness those consumer associations while paying mind to the legal systems regulating their marks' use.
To earn federal trademark rights, mark users file an application with the USPTO including information like date of first use, the goods and services bearing the mark, and an example illustrating the mark's use. Once granted, registrations provide a potent array of benefits:
- The registration verifies ownership of the mark in the entire United States for its designated goods and services.
- Federal trademark owners may use the "®" symbol, which indicates a "registered" trademark, establishes commercial credibility, and deters potential infringers by notifying them of the owner's control of the mark.
- In the event of an infringement lawsuit, federal trademark owners may recover money damages and other costs from the infringer.
These are only some of the rights afforded to federal trademark owners. And unlike the other IP forms that entail filing with the government, trademark rights last as long as the owner keeps using the mark and files occasional maintenance paperwork.
What if a mark's user does not seek federal rights? When first adopting a trademark, the user accrues limited common law trademark rights. Common law rights protect the mark only within the geographic area where the owner uses the mark; for example, if a restaurant operates locations in one city, its common law mark will extend only to that city and its immediate surroundings. Common law owners cannot recover money damages in court if their mark is infringed, nor can they use the "®" symbol to dissuade encroachment into their territory. (Those relying on common law rights may use the "TM" or "SM" symbol to indicate a claim in its trademark, for tangible goods, or servicemark, for intangible services. Historically mark owners had to discern whether their marks represented goods or services, but modern U.S. trademark law does not require using a particular symbol. Trademark users today more often display these symbols for marks pending federal registration, when the "®" symbol can supplant them.)
Relying on common law marks to protect or expand a brand later often costs far more than registering the mark up front with the USPTO would have, while exposing the brand owner to far greater risks. That principle encapsulates the most practical reason why brand strategists and business owners should employ a detailed trademark plan. Protecting any viable trademark is often flexible and relatively inexpensive earlier and significantly stricter and more expensive later. Once a mark is registered, its owner can enjoy the fruits of ownership knowing that no existential threats to the rights to use the mark will arise. At a more fundamental level, understanding when trademark law requires attention versus patent or copyright law will ensure that brands are safe to use, unrestricted to own, and available to create value for the businesses they represent.
Perry Gattegno is an attorney and the co-founder of a fantasy sports startup set to launch in 2018. He focuses on trademark prosecution and intellectual property strategy and he collaborates with clients on projects in branding, naming, and identity. A recovering journalist, he retains a soft spot for a good story. He likes short sentences and hates legalese.