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WHAT BUSINESS OWNERS NEED TO KNOW ABOUT TRADEMARKS

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Trademarks are not the first thing that a business owner typically thinks about when they are developing a new product of service. However, with the widespread use of the internet and increased use of global suppliers, a business owner must prioritize both protecting your own trademarks and avoiding infringement of others’ marks. The following are important concepts to understand as you develop your business’s trademark strategy.

  1. What is a trademark? A trademark identifies a business or individual as the source of a good or service. It can take the form of words, phrases, symbols, designs, colors, or a combination of elements. The key to a trademark is that it serves to identify, for consumers, the source of a good or service.
  1. Trademark infringement does not require an exact duplicate. The standard for assessing trademark infringement is likelihood of confusion. Under this standard, the question is not whether one mark duplicates or is likely to be confused with another, but rather how likely it is that consumers will be confused as to the source of a particular good or service as a result of the mark used in connection with offering that good or service. In practice, this means that when you select or design a mark, it is not enough that the mark differs in some manner from that of a third party. Rather, the mark must be sufficiently distinguishable to avoid a likelihood of confusion as to its source. The likelihood of confusion analysis takes into consideration numerous factors beyond the similarity of the marks. For example, the relatedness of the goods and services at issue is also an important consideration. Thus, if two marks sound or look similar but are used in connection with products or services that are not related—for example, one company sells computers and the other sells cat food—there is less likelihood that consumers would be confused, and thus less basis for a determination of trademark infringement.
  1. The more distinctive the better. The strength of a mark is determined by its distinctiveness. The more distinctive a mark, the stronger it is. Trademark law affords different levels of protection to marks depending on where they fall on a spectrum of distinctiveness, with the greatest scope of protection afforded to distinctive, strong marks. The strongest marks are arbitrary marks (such as Apple for computers) and fanciful or coined marks (such as Kodak) that have no relation to the goods or services for which they are used. By contrast, generic terms—that is, terms that name the goods or services offered—are the weakest marks. Adopting strong, distinctive marks is an important step in ensuring the broadest protection for your business’s marks.
  1. Trademark infringement can be expensive. The consequences of trademark infringement can be significant. The owner of an infringing mark may be forced to cease business activity and repay the trademark owner for any financial damage caused by the infringement. If there is a dispute as to which party has stronger rights to a mark, trademark litigation can result, which can be lengthy and extremely costly for both sides. Even if a smaller business has a strong claim for trademark infringement, it may find it difficult to allocate the funds to pursue the claim. For businesses harmed by an infringer, the infringement can result in a decrease in direct sales, the dilution of its brand, and harm to its reputation. Thus, protecting your business’s trademarks and avoiding infringement of third-party marks is not merely a matter of intellectual property rights; it is of utmost importance to your business’s financial health.

The first step to protecting your business’ trademark rights is the careful selection of a trademark. This should be done with diligence and the careful assistance of an experienced trademark attorney. We would be happy to discuss the trademark selection process with you or to evaluate your company’s trademark portfolio and recommend steps for additional protection of your company’s brand.