By: Bruce E. Colfin & Jeffrey E. Jacobson © 2008 Jacobson & Colfin, P.C.,
Why bother spending money and time choosing the “right” name for a new business venture or for a group of professional musicians and entertainers?
Business names, trademarks, product names, brand names, or professional names are valuable assets for any type of business. Whether it is used as a name or logo for a group of professional musicians, a production company, manufacturer or distributor of any type of product, the choice of the “name” or “mark” used in association with the product or service can be crucial.
Significant dollars and man hours may be expended in establishing the name or mark of a business. The “goodwill” that is generated by a product or service will be attributed to the name or mark associated with that product or service. For the purposes of this article, “Name” or “Mark” are interchangeable.
During an initial consultation at The Firm with a start up or established business, or a group of musicians performing together as a band, a commonly asked question is: How can we protect our name from being used by others? Of course, many people are not aware of the importance of a tradename or trademark. If that is the case, then our initial questions are: Has a name been chosen? Has any form of search been done to determine if anyone else is using that same (or similar) name in the same (or similar) business? Is the name already in use? Where, and for how long?
What usually follows is our very basic review of some of the complex principles of Trademark law. Generally, an understanding of the concepts will aid our clients in their choice of a tradename or mark and in obtaining legal protection for use of the tradename or mark.
The laws regarding trademarks developed as a device to help consumers identify those responsible for providing goods for sale in the marketplace. Similarly, servicemarks identify those responsible for providing services.
Among the purposes of the laws involving servicemarks and trademarks is the prevention of “passing off” or “palming off” the goods or services of one entity as those of another. In addition, marks allow manufacturers to promote their own products while assisting the consumer in choosing one product over another or serving to identify goods or services of a particular type. This is especially important in an era when mass production and intense competition in the marketplace can cause the purchasing public to experience much confusion and indecision. Trademarks and servicemarks also serve to assure a certain level of quality in certain goods and/or services. For example, when a consumer buys a piece of jewelry from a certain company, he expects to receive a level of quality that is known to be relatively consistent with products from that company. The same is true with the brand name of a well-known line of clothing. The name, to a certain extent, assures the consumer of a quality known by the public to be associated with that clothing’s label. Similarly, a music production company or professional group name denotes a certain quality or style that the public expects.
The rights to a mark in this country are generally established through “use,” not through registration. However, registration is necessary to protect an adopted mark from misuse by others and to ensure that ownership of the mark is recorded. Amongst competing users, priority of use, (who used it first) is an important factor in determining who has the superior right to use a name. Various state registration procedures require that the item sought to be registered be put on the market prior to registration. There are generally no requirements for the degree or duration of the first use in order to gain rights to a mark. A single prior use may be sufficient.
The Federal law regarding trademarks has changed recently. Applications for a federally registered mark or name can now be submitted based merely upon an INTENT to use it in interstate commerce (across state lines) instead of actual use. The Trademark Office will not officially register a mark until that mark has actually been placed in interstate commerce. However, filing an “intent to use” application has the effect of “reserving” the mark as against others who may wish to register it after you. This has been the situation in several foreign countries for many years. After the application has been fully examined by the U.S. Patent and Trademark Office, it is necessary to file an affidavit stating the mark has been in actual use, in interstate commerce, within six months after receiving a “Notice of Allowance.” (If the owner has still not used the name in interstate commerce, an additional six month period is available). This means that after conducting a search to see if a name is available, you can reserve your chosen name prior to actually using it on a product or with services.
This easing of the law has permitted individuals and businesses to gain access to a mark without the necessity of expending the time and expense of printing labels (or packaging) and marketing the named product without definitely knowing whether registration would be granted (and without the fear that another user would come along in the interim and apply to register the same name). However, the search and subsequent clearance of a name does not, in and of itself, grant the applicant any rights in the mark nor any priority in the right to register that mark. Additionally, just because you have incorporated a business (in one state) under a certain name, you do not necessarily have rights to that name in trade. Certain names or words are considered (or eventually become) merely descriptive of the goods or services to which they refer, in which case registration may not be available. The strongest mark for registration is what is called a “fanciful mark.” That is one which is not descriptive and might be a newly created word or combination of letters and numbers.
Federal Registration gives constructive notice to the public that there is an owner of a particular mark or tradename. Moreover, registering a mark with the federal government gives you access to federal courts for any claims concerning that mark, so long as that mark is the sole or primary issue involved in the claim. Federal registration also enables you to register with U.S. Customs and utilize their system for blocking the import of infringing goods.
The Lanham Act (Title 15 of the U.S. Code) is the governing Federal law for trademarks. Once a certificate of registration has been issued, the owner of a mark must file an affidavit of continued use after the first five years, (but before the end of the sixth year), in order to avoid automatic cancellation of the mark by the United States Patent and Trademark Office. Registration then becomes basically “uncontestable” and valid for the remainder of the initial ten (10) year period. The registration may be renewed for consecutive periods of ten (10) years each provided it is still in use (or not “abandoned”).
As with priority of use, the user can acquire certain strong rights in the name or mark; whether or not it has been registered, if it has gained “secondary meaning.”
“Secondary meaning” refers to the public’s ability to distinguish the goods or services of a particular mark or company from those of others. Certain states, like New York, place less significance on secondary meaning. In New York courts, emphasis is placed on the likelihood of confusion between the goods or services represented by one mark or tradename as opposed to another, the extent and degree of damage to business and/or reputation due to the infringement, and the overall strength of the mark or name itself.
Many states have also enacted “anti-dilution” statutes which protect a claimant against the “whittling away” of an established mark’s selling power and value caused by its unauthorized use by others. In order to succeed, the owner of the mark must generally be able to demonstrate that the mark is strong and distinctive in the minds of the public, and that its value is capable of and is actually being “diluted” by another’s use of that same or confusingly similar mark.
Used properly, a mark can theoretically last forever. It is important to know how to protect that mark since it is often an extension and representation of its owners. Marks also represent valuable property assets as well as the goodwill of a business. Trademark law is quite complex. Consequently it is crucial to discuss each situation with your attorney prior to using a name in commerce. It is also essential to do a trademark search before adopting a name and incurring the expense of applying for registration. For a Federal Registration, depending upon a number of factors including the filer’s knowledge of the filing procedure, the initial filing fee to the U.S. Patent and Trademark Office, ranges between two hundred and seventy five dollars ($275) and three hundred and seventy five dollars ($375).
© 2008, 2006, 2005, 1994, 1992, Jacobson & Colfin, P.C. all rights reserved. THE FIRM ® is a federally registered servicemark of Bruce Colfin. This publication is intended to provide accurate information on the subject matter covered. It is provided with the understanding that The Firm is not rendering a legal service, and we assume no liability whatsoever in connection with its use.