To eliminate confusion or potential exploitation by competitors, savvy business owners use trademark law to protect their business’s brand and the public’s perception and good will associated with that brand. In this post, we will discuss what it means to choose a “good” business name to achieve the highest level of trademark protection.
Trademark protection simplified
A business name or brand can be protected under either federal trademark law or state common law. To obtain federal trademark protection, a trademark application must be filed with the United States Patent and Trademark Office (USPTO). If the application meets all the legal requirements and the applicant is using the mark in commerce, the USPTO will issue a registration. For as long the trademark owner can prove to the USPTO that the trademark is being used in commerce, the trademark will be federally registered and will provide nationwide protection.
One of the most significant steps a business owner takes when forming a business is choosing a name. It’s an important decision because the name creates the business’s public identity and brand. If chosen wisely, the name can distinguish a business’s goods and services in the marketplace. It can also build a solid foundation for positive public perception where good will toward the brand and the company can grow.
Another option commonly used by business owners is to acquire common law trademark rights by simply using the mark. If a business creates a name for itself and begins using that name to promote its goods or services to the public, that business will acquire common law trademark rights to the name if it can prove it was the first to use that name. This option eliminates the need to file an application with the USPTO. However, it is important to note that common law trademark rights provide limited protection and are generally restricted to the local geographic area where the business operates and uses the trademark.
Strong v. weak trademarks
There are several different categories of trademarks, which fall on a spectrum according to how much or how little protection they offer. Some trademarks are very strong (arbitrary or fanciful marks); others are extremely weak or non-existent (generic marks). In the middle of the spectrum are descriptive and suggestive marks. A strong trademark means better trademark protection.
Generic marks. The weakest mark of all is called a “generic” mark and really provides no protection at all. Generic marks are considered “generic” because they are simply a common term for an entire class of goods and services. For example, a laundry business called “Laundromat” is a common term for laundry services and fails to distinguish that business from other businesses that provide similar laundry services. If a generic mark is chosen, nothing would prevent other businesses from using that same name.
Arbitrary and fanciful marks. While generic marks receive no trademark protection, arbitrary and fanciful trademarks provide the highest level of protection. Arbitrary trademarks are words used in everyday life, but the meaning of the word has nothing to do with the business itself. For example, the word “Apple” has nothing to do with computers, but is now commonly associated with Apple® computers.
Fanciful trademarks consist of made-up words that have no particular meaning. For example, the oil company Exxon® is considered a fanciful mark, as the term “Exxon” itself holds no meaning and was only created to distinguish itself from other similar businesses.
Descriptive and suggestive marks. Between generic marks at the low end of the spectrum and arbitrary/fanciful marks at the high end fall descriptive and suggestive marks. Descriptive marks describe a particular characteristic of the good or services—like the “Cold & Creamy” for a business selling ice cream. Suggestive marks, on the other hand, require the consumer to make a “mental leap” to understand the relationship between the mark and the goods or services. For example, Coppertone® is a suggestive mark for suntan lotion that a consumer might imagine would give them a coppery-tone skin color. The difference between descriptive and suggestive marks is often a grey area, and a significant amount of time and effort can be spent trying the categorize a certain mark as a suggestive or descriptive mark.
That distinction is important, however, because unless a descriptive mark has achieved secondary meaning, it will receive no trademark protection. Secondary meaning occurs when the trademark owner engages in extensive advertising over time and causes the consumer to only associate the descriptive mark with the trademark owner’s goods and services. For example, Kentucky Fried Chicken® is a descriptive mark that has—over time—acquired secondary meaning. The phrase “Fried Chicken” is understood by consumers to describe a characteristic of the goods provided by a restaurant. But through extensive advertising and exclusive use of the mark over a period of years, the Kentucky Fried Chicken® mark has acquired secondary meaning and allows consumers to distinguish the goods and services of Kentucky Fried Chicken® from other fried chicken restaurants. In general, it’s better not to choose a descriptive mark because secondary meanings can be very difficult and expensive to acquire and prove.
Absolutely avoid generic and descriptive marks. Remember, generic marks afford no trademark protection. And descriptive marks, likewise, are not entitled to trademark protection unless the mark has acquired secondary meaning, which is only achieved through extensive advertising and exclusive use over a period of years or even decades.
Aim for an arbitrary or a fanciful mark. A business owner should strive to select an arbitrary or a fanciful mark. Arbitrary and fanciful marks will receive strong trademark protection so long as the trademark owner can prove that it was the first to use the mark.
Contact an attorney. A business owner should contact an attorney before selecting a business name. Forming a relationship with an attorney who specializes in trademark law can prove to be an invaluable asset to a potential business owner. Additionally, by discussing preliminary issues with a trademark expert, you could avoid potential future problems and expenses.