Introduction To Trademarks
So what is a trademark? In short a trademark is a brand name or slogan. It can be a word, name, symbol, device, phrase, slogan, logo, sound, or any combination thereof whose primary purpose is to identify a product or service and distinguish it from those of another. For simplicity sake, we will refer to these items as a "mark". When the mark refers to a product it is called a trademark. When the mark refers to a service, it is called a service mark. When the mark entails a product's packaging, shape, and/or appearance it is called trade dress. For the mark to be registrable at either the state or federal level, however, the mark must be used in commerce and either distinctive or famous.
To qualify as a trademark, a product name (logo, design, symbol, etc...) or name associated with the provision of a service must be: (1) used in commerce and either (2) distinctive or (2) famous due to continuous use and prominent national customer recognition.
What makes a trademark distinctive?
For a mark to be distinctive the mark must not be generic or descriptive of the product of service to which it represents. Most often, businesses who fail to seek the advice of competent counsel select a name that is either purely, or somewhat, generic and descriptive. This can pose a huge problem because when such is the case the owner of the generic and descriptive name cannot prevent others from using the name. So how do you pre-select a good name? Briefly, arbitrary, fanciful, and coined marks are best. These are either actual words that exist in the dictionary, or made up words, that have absolutely no connection to the related goods or services. Suggestive marks are also okay, but less favorable. A suggestive mark is a word that can be associated with the impression your product or service seeks to make. For example, Ford Motor Company selected the name (mark) "Mustang" for an automobile it wanted to promote as fast and sleek.
How Trade Names Differ from Trademarks
A trade name is a word, name, symbol, design, or any combination thereof whose primary purpose is to identify a business, occupation or vocation and distinguish it from the business, occupation, or vocation of another. Common examples of trade names include fictitious business names and d.b.a's. Trade names are different from trademarks and service marks in that a trade name is associated with the name the business opts to use on invoices, bank accounts, checks, etc.... Trademarks and service marks, on the other hand are associated with the name a company uses to promote and sell its goods and / or services. However, sometimes the name a company has selected as its trade name may also be used and function as the company's trademark.
Domain Names Distinguished
Doesn't owning the domain name give me trademark rights? One of the common misconceptions is that registration of a domain name automatically gives the domain name owner trademark rights in and to the domain name. This is simply false. While some domain names may act as a trademark, many do not. Technically, a domain name is more like an address than a trademark because a domain name's simple function is to provide a means for a potential customer to locate you on the world wide web. However, a domain name may also act as either a trade name or mark. When the domain name address is displayed on the web site as a reference to your business, the domain is acting as a trade name. But when the domain name is displayed as a product or service name, then it is acting as a mark.
In addition, it has now become clear that if someone owns a valid pre-existing trademark in and to a domain name, or part of domain name (in some cases) you have registered, the trademark owner may request that you stop using the domain name if certain circumstances exist, and may even opt to sue you for trademark infringement. The pre-existing mark need NOT be identical to the domain name you registered; in fact, it must merely be "confusingly similar". So what does that mean? This is a very complex area of the law that turns on many facts and circumstances. If you are even slightly unsure if your domain name conflicts with another person's mark, please consult an competent attorney familiar with the laws of trademark.
Corporate Names are Just Trade Names
Another common misconception is that if you have a corporate name approved by the Secretary of State, Commissioner of Corporations, or other state agency, then you have the right to freely use the name in commerce. This also is false. Corporate names are like trade names, which are fine for use on invoices, checks, and bank accounts. The fact that a state agency allows you to use a name for your corporation or limited liability company does not mean another company owning the trademark to the name, or a confusingly similar name, cannot stop you from using the name to promote or sell a competitive product or service. For this reason you should not attach any trademark significance to a state agency's approval of a corporate, limited liability company, or partnership name. In cases where it would be a hardship for you to change your business name, and destroy all documents containing that corporate name, it is wise to consult experienced trademark counsel to conduct a trademark search prior to selecting your corporate name. The costs associated with having such a search performed will generally be less than abandoning a name at a later date.
Conclusion
Naming a product or service, or having a new corporate logo designed, may be one of the most critical steps you take when starting a new business, or begin offering a new product or service. Likewise failure to do so properly can be a great hazard. California alone has over 80,000 active trademarks and the United States Patent and Trademark Office is said to have over 1,000,000 live trademarks. Selecting a name that either fails to meet the requirements for trademark registration, or infringes another's active mark can have such grave consequences as to put a person out of business forever. Why? Because unknowingly selecting a trademark that belongs to a competitor can lead to a very costly trademark infringement lawsuit. At the very least, upon discovery, the owner of a previously registered trademark will probably demand that you immediately cease and desist using the name and destroy all goods and advertising materials on which the name appears.
