Trademark Law 101: What Every Business Owner Should Know

Trademark Law 101: What Every Business Owner Should Know

Your business name and logo are the face of your brand, but did you know they can also be your most valuable assets, protected by the law of trademarks? This article will cover the basics of trademarks – what they are, why they’re valuable, and how they’re protected.

To start, what is a trademark?

A trademark can be any word, phrase, symbol, design, or a combination of these things that identifies a source of goods or services. A service mark is a brand name or logo that identifies the provider of a service. Trademarks distinguish goods while service marks distinguish services.

Examples of notable trademarks are the Nike swoosh, the phrase “Just Do It,” and, here in Minnesota especially, the Target logo. A service mark example is AA for American Airlines, which provides airline services. This article will talk more broadly about trademarks, but the same rationale applies to service marks.

In a nutshell, a trademark identifies the source of the goods or services you provide or sell, provides legal protection for your brand, and helps you guard against counterfeiting and fraud.

Trademarks in the marketplace distinguish the goods of one manufacturer from the goods of competitors and allow customers to easily identify which goods a manufacturer produce. In the modern era, we cannot think of a good without a trademark. Goods and their marks are almost synonymous. But the origins of trademark law date back well before Mad Men and Madison Avenue to the times of merchants who dealt in goods, such as grain or rice or spices (see a little history of trade here). Many merchants (or traders) displayed stamped marks on their goods to distinguish the sources of those goods. And this principal – to identify the source of a good – remains at the forefront of trademark law today.

How is a trademark valuable?

A trademark itself is an asset commonly described as intellectual property. The value that a trademark provides is that a trademark owner can legally prevent others from using the same or a similar trademark for related goods or services. The trademark owner’s exclusive right to use their mark allows them to build a brand and reputation around their mark that is distinct to their goods or services.

The stronger your trademark is, the more easily you can prevent others from using it without your permission. The strength of a trademark depends on its level of distinctiveness, which generally falls into one of four categories – fanciful/arbitrary, suggestive, descriptive, and generic. Fanciful (think Pepsi), arbitrary (think Apple computers), and suggestive (think Coppertone tanning products) marks are acceptable trademarks, while descriptive (think Speedy Buses) and generic (think Hat Shop) marks are not acceptable trademarks.

There is a caveat that descriptive marks may be registrable if they have gained distinctiveness in identifying a source through extensive use in commerce over a period of time, typically referred to as a requirement of acquired “secondary meaning.” Once your trademark is registered, additional value may come from licensing your trademark, where someone will pay you to use the mark in association with their goods or services.

How is a trademark protected?

You become a trademark owner from the moment you start using your trademark with your goods or services, but the protections that come with being the first to use the trademark in commerce are limited. For example, your trademark rights only apply to the geographic area where you’re providing goods or services. Therefore, it may be wise to apply for federal registration of your trademark to maximize your rights to use and protect your trademark, though registration is not a requirement.

Federal registration of your trademark provides many benefits, perhaps the most important being nation-wide protection. A federally registered trademark owner has the right to bring a lawsuit concerning their trademark in federal court. Also, registration provides a clear public record of the registration dates and owners of registered trademarks, minimizing the amount of evidence required to demonstrate ownership or to settle priority disputes.

Whether you register your trademark or not will affect how you let consumers know that you are using your mark as a trademark. You can use “TM” for goods or “SM” for services with your mark to let consumers and competitors know that you are claiming the trademark as your own, and this applies even if you haven’t filed an application to register your mark. Once you federally register your trademark with the US Patent and Trademark Office (USPTO), you can use the ® registration symbol anywhere around your trademark, typically in a superscript or subscript at the end of your trademark.

How long does trademark protection last?

A trademark can last forever as long as you continue to use it in commerce with your goods or services. Registered trademarks require filing maintenance documents, typically every five years, and providing evidence to the USPTO that you are still using the mark in commerce. As long as these requirements are met the registered mark can last indefinitely. The longer a trademark lasts, the more it solidifies the distinctiveness of the owners as a major player in the market.

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Kimberly Lowe

Kimberly Lowe

For over 20 years I have lawyered from the trenches with experience based on a comprehensive knowledge and understanding of how both for-profit and nonprofit enterprises operate. I guide entrepreneurs, executive management teams, boards of directors, multigenerational families, shareholders and investors through all aspects of the business life cycle from formation to operation to exit. Read Kim's Bio.

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