This article is written by Laurie Marshall, Esq. of Marshall Law Group, LLC
What is a trademark? A trademark is any word, phrase, symbol, design, or a combination thereof that identifies and distinguishes the source of the goods of one party from those of another. Thus, your company’s name, products, logos, taglines and designs, if used in connection with the sale of your goods or services, constitute a trademark.
There is a misconception that having an LLC gives a company rights to use the name to offer goods and services. It does not. The intention of an LLC, or other corporate identity, is to protect you personally from liability if someone wants to sue you. If you want to use that same name to identify the goods or services you will be offering, you need to go through the trademark process in addition to registering as an LLC. This is typically the point in my presentations when I get the blank stares and open mouths. And just because the company name, domain name, twitter handle, etc. is available does not mean the trademark will also be available. This is when I hear the sound of pencils dropping out of people’s hands.
Unfortunately, this information is not disseminated enough and small businesses too often learn these trademark lessons the hard way. My goal here is to educate you about what you need to know-- in 1,000 words or less.
Business owners often ask me when they should begin the trademark process. My answer is always, “Now.”
Consider this: Does it make sense to spend hundreds or thousands of dollars deciding on your business name and logo design, advertising and marketing, securing social media avatars, and building branded sites all without knowing whether that name is available and will rightfully belong to you?
If you are going to spend the time, energy and money building your brand, it is imperative you make sure no one else owns better rights than you.
Another question I often get is: “What is the worst that can happen?” Here are two things I have seen happen to my clients:
1) They receive a Cease & Desist letter.
This letter requests you cease all use of the mark immediately. You will need to destroy everything with your trademark on it and provide inventory information to the opposing party. This can be devastating to a business, especially if you have established customer loyalty and need to rebrand. There can be large financial losses as a result of products on which you have already placed your trademark. Perhaps, most significantly, the opposing party can ask for an accounting and potentially demand some or even all of your profits.
2) They are sued in Federal Court for trademark infringement.
This has cost some of my clients upwards of $100,000.
Another question I am frequently asked is, “Why go through the registration process now?”
Delaying this part of the process creates unnecessary problems for a business. Often I see clients who wait too long to file an application only to find that someone else registered the name first. Although here in the U.S. we are a “first to use” country (meaning the first person to use a mark has the best rights), if your mark is not filed in the United States Patent & Trademark Office (USPTO), the USPTO is unaware that you may own better rights and will allow another mark to be registered. If you are ready to file your registration and someone has already beaten you to the punch, you will then need to pay in excess of $10,000 to remove the previously filed mark from the Federal Trademark register. And, if the previously filed mark has been registered for 5+ years, you may no longer be allowed to remove it as the mark may have been granted incontestable rights.
So how can you get started?
First, Make Sure Your Trademark is Clear
The trademark clearance process requires performing a search of third party trademarks and analyzing the search. Although you can conduct your own search on the USPTO’s website database (www.uspto.gov), the search functions do not pull up all problematic marks. Trademarks do not need to be identical to pose an issue as a mark could be a problem if it has a similar “commercial impression” to yours. It can be helpful in finding some red flags but will not be effective in uncovering all potential issues.
Next, the search results must be analyzed. Sometimes a trademark can coexist because multiple parties own similar marks each for separate and discrete goods or services. Other times one entity owns very strong rights to a mark and can prevent other marks from coming into its space, even selling distinguishable goods or services. The process is tricky to figure out and, therefore, is a reason a professional should help you through the process.
Second, File a Trademark Application
This can be done on the USPTO website. You can choose a $225 application where you select goods and/or services that have been predetermined by the USPTO. You also must decide whether you want to file an application based on use. If you have not used your trademark, filing an intent-to-use application would hold your place on the register.
Finally, Protect and Maintain Your Trademark
Once you have registered your trademark you must take care to protect it. Otherwise, you can lose your rights. Additionally, it is important that between the fifth and sixth year after filing you prove use of your mark. You must renew your trademark at every ten-year interval thereafter.
The most important thing to remember: It is considerably less expensive to search, clear and register your trademark than the potential costs associated with defending a litigation or dealing with a Cease & Desist letter. When you decide to go through this process, have a qualified attorney help you assess the risks. There is no substitute for solid legal guidance.
As a trademark attorney with over 20 years of experience, Laurie currently represents hundreds of small businesses and entrepreneurs in a variety of industries, assisting them with the legal aspects of branding their company at an affordable, flat fee. Many of these clients have come through Shark Tank’s Daymond John Academy. Previously, Laurie handled the trademarks for Major League Baseball for 10 years and continues to represent many MLB clubs and the National Basketball Association. She speaks regularly on the Legal Aspects of Branding a Small Business at events and conferences throughout the country.