Twelve common misconceptions about US trade marks

Trade marks frequently rank among a company’s most valuable assets. Marks operate as source identifiers by distinguishing the goods or services of one business from those of another, while facilitating consumers’ purchasing decisions. Despite trade marks serving as an essential component of a company’s corporate arsenal, even the most seasoned executives, lawyers and marketing officers can be susceptible to several common myths and misconceptions regarding US trade mark law and practice. Below are 12 costly and commonly shared trade mark misunderstandings.

1. All trade marks are created equal

Not all trade marks are created equal. To evaluate the strength of a proposed mark, it is critical to understand that trade marks are viewed within a spectrum of distinctiveness. Ranging from generic to arbitrary or fanciful, a mark’s scope of protection is categorised along a vibrant continuum. Ranging from unprotectable to highly distinctive, the level of descriptiveness or distinctiveness may be appraised by examining the mark in  relation to the goods or services offered in connection with that designation. A trade mark may be compartmentalised into four main categories: generic, descriptive, suggestive or arbitrary/fanciful.

A) Generic: On one end of the distinctiveness spectrum, generic terms are common words that name goods or services; these are incapable of functioning as trade marks. Registration of a generic term would prevent others from rightfully utilising the common word and serve no source identification function.

B) Descriptive: Moving up the band, a mark is considered merely descriptive if the primary significance of the term immediately describes an ingredient, quality, characteristic, feature, function or purpose of the specifically delineated goods or services. Although adopting a descriptive mark simplifies marketing efforts by conveying features of the product or service to the purchaser, it also presents hurdles at both the registration and enforcement stages. Common examples of descriptive marks include Arthriticare (for arthritis medication), Car Freshener (for car deodoriser), and World Book (for encyclopedias).

C) Suggestive: Suggestive trade marks indirectly refer to the goods or services with which they are associated. The mark requires an intellectual leap, imagination, thought or perception in order for the consumer to reach a conclusion as to the nature of the goods or services. For example, Coppertone (for tanning lotion) and Chicken Of The Sea (for tuna) are considered suggestive marks. Traditionally, marketing professionals prefer suggestive marks due to their inherent ability to evoke ideas in the minds of consumers, suggesting the nature of the goods or services offered. By subconsciously linking a mark to a product or service, this approach enhances brand awareness while reducing costs associated with marketing campaigns. However, a fine line separates descriptive and suggestive trade marks. What a marketer may deem suggestive, the examining attorney may find descriptive.

D) Arbitrary or fanciful: Finally, arbitrary or fanciful marks are afforded the broadest scope of protection. An arbitrary mark is a word that exists but has no meaning when used on the product itself, whereas a fanciful mark is a word not recognised by the dictionary. For instance, the marks Pepsi and Exxon are deemed fanciful because they have no meaning or common usage. Alternatively, Apple used in connection with computers is considered an arbitrary mark because it is a known term used in an uncommon fashion.

2. Searched the USPTO and no one has registered the mark – let’s move forward.

Merely performing a quick search for the proposed mark on the United States Patent and Trademark Office (USPTO) Electronic Search System is insufficient to determine whether the trade mark is available.

For instance, other companies may own common law rights that compromise the value and availability of a trade mark. Common law rights arise from actual use of a mark in commerce even absent federal registration. Although federal registration affords additional rights that are unavailable under the common law scheme, rights still develop without registration. These limited rights are cabined to the geographic area in which the mark is used. Within that specific territory, rights are based on the priority of use of a mark. Occasionally, a federal registrant may not be the first user of a trade mark in a specific territory; therefore, an unregistered prior user may enjoy superior rights. Thus, when applying for a trade mark, even a company with common law rights may file an opposition based on first use in commerce.

Further, if the USPTO has deemed a trade mark cancelled or abandoned, that designation does not ensure that your agency may use the mark without complications. A mark may be deemed cancelled or abandoned for a bundle of reasons. As stated above, trade mark rights continue at the common law level if a company continues to employ their mark in commerce. Marketers should not take the USPTO’s designation that a mark is cancelled or abandoned as absolute without investigating the actual use of the mark in commerce.

The USPTO Trademark Electronic Search System is only one tool used to determine the registrability of a proposed mark. Whether you hire a trade mark attorney or purchase a professional clearance search, multiple considerations must be made when determining a mark’s registrability. There are many sources in addition to the USPTO, such as common law sources, state trade mark registries and industry publications.

This article originally appeared in Managing Intellectual Property, December 2015 / January 2016. Read the full article as PDF.