An Overview of the United States Trademark Law

Steven B. Smith, Esq.
This article provided by the Engstrom Institute

What is a Trademark?

Trademark is a word, name, pictorial matter, symbol, logo, etc. (or any combination of these) used by a business or entity to identify and distinguish its products from other products. Use of a word, name, etc. in connection with services is called a Service Mark.

Other items which may be protected include a Certification Mark (a mark used by a person other than its owner to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person's products or services; or that the work or labor on products or services was performed by members of a union or other organization), a Collective service mark/trademark (a mark used by the members of a cooperative, an association, or other collective group or organization to identify their products and services), a Collective membership mark (a mark used to indicate membership in a cooperative, an association, union, or other collective group or organization) and Trade dress (the overall design or appearance of a product or its packaging, which can include features such as size, shape, color, color combinations, texture, and graphics).

Basics of Trademark Law

Unlike many countries, in the United States proprietary rights in a mark can be acquired simply by using the mark "in commerce." Registration is not required to acquire trademark rights. Rights acquired by use, without registration, are known as Common Law rights.
To qualify as a "trademark," a word, name, or symbol must be distinctive when first used with the products or services with which it is used, or it must be capable of becoming distinctive with respect to those products or services.
Registration. Each state maintains a registry of marks, as does the United States Patent and Trademark Office (USPTO) in Washington, D.C. A "registered mark" is entered in one or more of these registries. If a mark is entered in the USPTO registry, it is called a federally registered mark.
Ownership. A mark's owner is the person (i.e. individual, corporation, etc.) who legitimately controls the nature and quality of the products or services that it identifies. Normally, the owner is the person who uses the mark, but the owner may also license others to use the mark.
The two primary goals of trademark law are to prevent others from infringing your marks and to ensure that your use of a mark does not infringe upon someone else's existing use of a mark.
The key element in most trademark analyses is the likelihood of confusion.

What is Necessary to Qualify As a Mark?

To qualify as a mark, a word, name, picture, etc. must be distinctive. A distinctive word, name, symbol, etc. is one that relevant members of the public readily associate with a particular product or service, such as XEROX with copiers or NIKE with athletic shoes. An inherently distinctive mark can be protected immediately upon first use.

A word, name, symbol, etc. which is descriptive of a product or service cannot be immediately protected, but may acquire distinctiveness through long and/or widespread advertising and use in connection with a product or service. At the time this happens it can be protected as a mark. Please note that geographic words which indicate origin or location are considered descriptive. Thus, the name USA Tiddlywinks would be considered descriptive (initially) because "USA" delineates the geographic origin, and "Tiddlywinks" describes the sport serviced.

In evaluating whether a word, name, symbol, etc. is distinctive, United States courts have established five categories:

Generic - the name for a product or service by which everyone knows it (e.g., bicycle, pizza, broadcasting); it is not and can never become distinctive or be protected.
Descriptive - tells about or describes the features, function, uses, nature, qualities or geographic origin of a particular product or service (e.g., suregrip for nonskid coatings; Paris for perfume); it is nondistinctive when first used and cannot be protected as a mark at that time, although it is capable of acquiring distinctiveness.
Suggestive - does not immediately convey information about a product or service. Rather, it indirectly says something about the features or characteristics of a product or service, which requires thought as well as imagination to know what it means (e.g., mouse seed for rat poison). This kind of mark is considered inherently distinctive and can be protected from the date of first use.
Arbitrary/fanciful - a mark whose accepted meaning has no significance in reference to and does not convey any information about the product or service (e.g., CAMEL for cigarettes). This kind of mark is considered inherently distinctive and can be protected from the date of first use.
Coined - a mark that is created solely for use as a mark and has no known meaning (e.g., CLOROX for bleach). This kind of mark is considered inherently distinctive and can be protected from the date of first use.

Surnames (FORD), alphabet letters (IBM), numbers (3 IN 1), slogans (YOU CAN BE SURE IF IT'S WESTINGHOUSE), nonfunctional product and packaging configurations (Perrier bottle), nonfunctional architectural features of a structure (McDonald's arch), and the overall appearance of a product or its packaging (Vuitton handbags), called "trade dress," can be protected as marks.

Understanding Common Law Trademark Rights

As discussed above, a party acquires common law rights in a mark (assuming that it is the proper subject for a mark) upon use of the mark in commerce.
First use of a mark establishes a priority date in the mark. From this date on, the owner of a mark can exclude others from using the mark. In the event of a dispute between parties over who has the rights to use a mark, with all other things being equal, the earlier priority date will prevail.
For an owner of a mark who relies on common law rights (i.e. does not federally register the mark), his or her exclusive right is limited to the geographic area where use occurs and can be enforced only against subsequent users in that area. To enforce common law trademark rights against a later user in a remote geographic area, the owner must show that the later user knew about the owner's mark before the later user used it.
A similar mark may be used in connection with dissimilar goods and services depending upon the strength of the original owner's mark. For example, there can be Lotus Software and Lotus Automobiles.

Trademark Searches Before Using or Filing To Register a Mark

The importance of a trademark search cannot be overstated, regardless of whether a party intends to register a mark or rely on common law rights. Use of a particular mark may infringe because someone already uses it or a similar mark. The applicable law in the United States says a mark's first user may be able to successfully challenge some or all later users. Whether this is the case is determined by where the first user's rights exist geographically, the kind of products or services the first user's mark identifies, as well as whether and when the first user federally registered the mark.

Keeping the foregoing in mind, it is important to learn whether anyone is or may be in a position to successfully challenge use and/or federal registration of a mark. This can be done by conducting a trademark clearance investigation ("search"). Failing to conduct a search can be a costly mistake.

A search involves examining databases that contain information about marks and names that are used and/or registered federally or at the state level. An evaluation of search data involves comparing the sound, appearance, and meaning of the disclosed marks with that of the mark to be used and/or registered in the United States as well as the products/services they identify. Other factors considered include the trade channels through which the products/services are offered as well as the nature and number of similar marks used by third parties.

Search results can often be obtained in as little time as one day.

Advantages of Registering a Mark

Federal registration can establish a nationwide priority date with respect to the right to exclusively use the mark throughout the United States, regardless of where it is actually used. This benefit is referred to as "constructive use." This priority date can usually become effective on the filing date.
If a mark's first user federally registers it, that person may be able to obtain the exclusive right to use it nationwide in connection with the products or services that the registration covers and perhaps related products or services, subject to certain exceptions.
A registrant is entitled to automatic jurisdiction in a federal court in an infringement lawsuit.
An owner of a registered mark has a basis to bar importation of products bearing an infringing mark.
A registrant also has an opportunity to make the right exclusively to use a mark incontestable.
Please note that marks which are inherently distinctive (i.e., arbitrary, fanciful, coined and suggestive marks, and trade dress) can be federally registered on the Principal Register. Similarly, a descriptive mark can be federally registered but not on the Principal Register until it acquires distinctiveness; before that happens it can be federally registered on the Supplemental Register.

The Federal Registration Process

Use or Intent to Use. The first decision to make in the registration process is whether to file a "Use" application or an "Intent to Use" application. A Use application should be filed if the mark has been used on or in connection with products or services offered or transported in commerce between two states or commerce which the United States Congress can control (this includes commerce between the United States and foreign countries). An Intent to Use ("ITU") application should be filed if the applicant has not used the mark on or in connection with products or services offered in interstate commerce, but has a bona fide intention to use the mark in such commerce.
Classes of Goods/Services. Each application must identify and describe the goods or services on which the mark is or will be used. The USPTO recognizes the international classification system, which divides the world of all goods and services into 42 different classes. An application must identify the appropriate class(es) and describe the goods or services falling under the class(es).
Application Fee. The current application fee is $325 per mark per class. Careful evaluation should be made to determine in how many classes to register a mark.
Specimens. A Use application must be accompanied by three specimens (samples) showing use of the mark on or in connection with the products or services the mark identifies. For products, the specimens may be labels, hang tags, packaging, or photographs showing the mark affixed to the product. For services, the specimens can be copies of advertising and/or promotional material that includes the mark and refers to the services. In either case, all three of the specimens can be the same. Specimens are not filed with an intent to use application.
Multiple class application. It is possible to file one application for a mark that identifies products/services which are in more than one class. However, the filing fee will still be based on the number of classes for which registration is requested.
Examination. Applications are examined by the U.S. Patent and Trademark Office for formalities and confusingly similar registered marks.
Publication. Applications which pass the USPTO's examination are then published for opposition in the Official Gazette. Often, however, the USPTO will issue a priority action seeking clarification of the application or requesting additional information.
Opposition. For 30 days after the date of publication, anyone who believes he will be damaged by the registration can oppose the registration by filing a Notice of Opposition.
Registration or Notice of Allowance. If the 30 day opposition period passes without the filing of a Notice of Opposition (or an extension of time), the USPTO will issue a Certificate of Registration for use applications and a Notice of Allowance for intent to use applications.
Amendment to Allege Use and Statement of Use. For an intent to use application, actual use in commerce must eventually be demonstrated. This can be done before the Notice of Allowance is issued by filing an Amendment to Amend Use with the USPTO. After the Notice of Allowance is filed, a Statement of Use must be filed. Both must be accompanied by three specimens showing the mark's use in commerce and the appropriate fee. A Statement of Use must be filed within six months from the date the Notice of Allowance was mailed, or the application will automatically be deemed abandoned. Alternatively, a request for an additional six months to file the Statement can be filed, but this must be done within the time period the Statement is due. Up to six extension requests can be filed.
Cancellation. A Petition to Cancel a registration can be filed any time within five years from the registration date by anyone who believes he will be damaged by the registration.
Affidavit of Continuing Use. An affidavit alleging use of the mark must be filed at any time between five and six years from the registration date; otherwise the registration will be canceled automatically.
Incontestability. A registration can become incontestable (subject to certain exceptions) after five years from the registration date if an incontestability affidavit is filed any time after the mark has been continuously used for five years.
Length of Registration and Renewal. The registration term is ten years from the registration date (if the use affidavit is timely filed) and can be renewed for additional ten-year periods by filing a renewal application.

*A mark may be approved for registration in as brief a period as seven months from the filing date, or it may take two years or more depending upon the particular application.

**Federal registration gives a trademark many legal and procedural advantages not available for unregistered marks.Therefore, a federal application should be filed as soon as possible after determining that a mark's use and registration in the United States appear to be okay. This is the case whether the mark has been used or is intended to be used in interstate commerce.

The Following Marks Cannot Be Federally Registered

marks that consist of immoral, deceptive, or scandalous matter.
marks which may disparage or falsely suggest a connection with persons, living or dead, or with institutions, beliefs, or national symbols, or bring them into contempt or disrepute.
marks that consist of or comprise the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof.
marks that consist of a name, portrait, or signature identifying a particular living individual except by his/her written consent, or the name, signature, or portrait of a deceased President of the United States during the life of his widow, if any, except by the written consent of the widow.
names and symbols protected by specific federal statutes, such as Smokey the Bear, American Legion, the Red Cross insignia, Olympic, Olympiad, five interlocking rings (i.e., the Olympic symbol), and Little League Baseball.
marks that are confusingly similar to federally registered marks.

Labeling a Mark

Until a mark is federally registered there is no special symbol or designation that should be used in association with it. The symbol ™ or something other than the federal registration symbol can be used with unregistered or state registered marks, but there is no legal requirement that this be done.

However, after federal registration it is important to use ® to avoid losing some federal registration benefits.

TRADEMARK INFRINGEMENT

Trademark infringement occurs when a mark so resembles another that it is likely to cause confusion, mistake, or deception. Actual confusion is unnecessary. The relevant confusion, mistake, or deception is that which exists in the minds of persons who are or may be customers for the products or services the marks identify.

Arguably, infringement occurs if an appreciable number of persons of average intelligence and experience buying under the usual conditions and exercising ordinary care are likely to believe the products or services of one person are made, offered, sponsored by, or in some other way connected with those of another person because of the mark that is used.

Under certain circumstances the first user does not have the right to stop others from using the same mark. This occurs when someone else uses the mark to identify products or services that are different enough from the first user's products or services to present no likelihood of confusion.

Stopping Importation of Products Bearing an Infringing Mark

By federally registering a trademark and recording the registration with United States Customs, a trademark owner may be able to bar importation of products bearing an infringing mark. United States Customs will withhold delivery of any item it has reason to believe may infringe a registered and recorded trademark.

Protecting Marks in Foreign Countries

The right to exclusively use a mark in the United States does not automatically extend to foreign countries or insure its availability for use everywhere by the United States owner.

In many countries, legal protection for a mark depends solely on registration in that country - the first person to register a mark obtains the exclusive right to use it. Therefore, it is important to file for registration as soon as practical in foreign countries where you plan to use a mark.

Please note that, under the Paris Convention Treaty, an applicant for federal registration in the United States can apply for a foreign registration and use the U.S. filing date as the priority date for rights in a foreign country, but only if the foreign application is filed within six months from the United States federal application filing date.

Some foreign countries have laws similar to the United States in that trademark rights can be acquired by using a mark in that country. Please be aware, however, that use must occur in that country; use in the United States will not suffice.

Guidelines For Proper Usage Of a Trademark

A mark should always be used as an adjective, not as a noun.
The generic name for the products/services the mark identifies should be used in close association with it and at least once at the mark's most prominent appearance on the product, labeling, and/or in advertising; the generic name should be short and in lower case or other non-distinctive lettering.
Avoid using the mark in the plural or possessive form.
The mark should be used in a manner that distinguishes it from surrounding text by depicting it in italics, capital letters, or bold-face type, or by using initial capital letters, by underlining, or placing quotations around it.
If federally registered, the registration notice ® should be used in close association with it; if unregistered the designation ™ may be used.

Steven B. Smith, Esq. is an attorney in Colorado Springs, CO with Holme Roberts & Owen LLP.

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