What Security Measures Should Business Owners Take to Protect Their Trademarks?

Trademarks are the most valuable assets of many businesses. How do you protect them?

Victor Grafe III


Do I own any trademarks, and how does that matter?

You own trademarks. Your logo and business name are trademarks. Your names for products or services, taglines, and even color schemes may also qualify for legal protection as trademarks.

Trademarks are how customers recognize your business and distinguish you from your competitors. They carry the weight of your reputation. People pay you instead of someone else because they have developed some level of trust and respect for you.

For example, we’ll pay four times as much for shoes that say “Nike” as for shoes that say “Joe’s Overseas-Manufactured Sneakers,” because we have confidence in Nike to provide good shoes under its brand. There are also connotations attached to the Nike brand that many people like.

Trademarks are the most valuable asset of many businesses. Tools get replaced, employees come and go, but a good company keeps doing good work. Customers know that is you by your trademarks.

Cartoon: your sister invents trademark "Metates" for small business of red-chile, chipotle cupcakes

Suppose your sister creates the most wonderful red-chile, chipotle cupcakes in the world. She starts selling them. She calls them “Metates” and designs a great logo. They’re a hit! Pretty soon they get picked up by Albertson’s.

A few months later she calls you. She’s so excited: Nabisco wants to buy her out! What does Nabisco want to buy?

Your sister’s blender? They have a factory. Her recipe? They can reverse-engineer it. They want the customer goodwill attached to the name “Metates” and logo.

You have got to protect your identity and reputation. If customers can’t tell your company apart from your competitors, your great customer service gets washed away and your marketing is a waste. This can happen if you have a very generic name, or if someone else copies your brand. Intentional knockoffs are reputation burglars. You could even go out of business if another guy messes up and people think it’s you.

How are trademarks legally protected?

Trademark law gives businesses exclusive legal rights to the trademarks they uniquely own and control. The owner of a trademark can use the courts to stop anyone else who copies their brand or uses similar elements in a way that is likely to cause confusion. The infringers also have to pay damages for the harm done.

Basic trademark rights arise under U.S. law just from using a trademark. So if you use a name or brand in the marketplace, you probably already have legal rights in it. You are not powerless to protect your reputation.

If you see someone trespassing in your trademark space, you have to take action or your trademarks can cease to exist. For every webpage, advertisement, or product label customers see that looks like your trademark but it’s not you, you are losing control over your brand. If enough control slips away, your trademarks will not meaningfully and uniquely identify your business anymore. Then they won’t be trademarks at all. Once famous brands such as Thermos, Escalator, Dry Ice, and Zipper died when the trademarks ceased to uniquely identify the owners’ products. Please, don’t take your life’s work anywhere close to that edge.

Depending on who the infringer is, you might try a personal phone call first, from businessman to businessman. But if that doesn’t stop it, you’ll want a trademark lawyer to write a letter that briefly states your rights under trademark law and demands that the infringement immediately stop or you will sue them. People don’t like to be sued, so this letter is often enough to fix the problem. As a last resort, you may have to sue them.

If you have a trademark that is important for you, consider registration with the United States Patent and Trademark Office (USPTO) to enhance its strength and enforcement power. Federal registration expands your legal rights and your leverage in any trademark-related negotiation or dispute. These are some of the advantages:

·        Your trademark rights apply nationwide, instead of only locally.

·        If there is a lawsuit about the trademark, your opponent has to prove that you don’t own the trademark, instead of you having to prove that you do.

·        After five years, your trademark can be declared “incontestable,” which tightly restricts the grounds on which an adversary could challenge the validity of your rights.

·        Only registered trademarks are eligible for the Amazon brand registry.

·        You can request U.S. Customs to block importation of goods that infringe your trademark.

·        No one else can federally register the same trademark for the same or related products.

·        You can use the circle-R symbol, which lets everyone know you take your trademark rights seriously and have taken the steps to be ready to enforce them.

Registration is also powerful defensively. If your trademark is registered, anyone who tries to push you off of it will have a much harder time. The registration might even deter them from trying.

When is the right time to register a trademark?

As soon as possible. Here’s why:

Under U.S. law, whoever uses the trademark first gets basic trademark rights to it in their local area. That’s good, but compare it with what the first person to successfully apply to register the trademark gets: full federal-registration trademark rights everywhere else in the U.S.A.

Suppose you’re working hard to build your business and reputation, and your brand is becoming known and respected in the Albuquerque area. You’re so busy making happy customers you never even think about trademark registration.

Some time later a guy in New Jersey starts using the same name for his business in Newark. You don’t know about it and wouldn’t care if you did; he’s so far away. But then the New Jersey guy federally registers the trademark with the USPTO.

You work and sacrifice and grow, and it’s time to open up your first location in Colorado. Congratulations! But then—can you believe it? The New Jersey guy sues you! And he’s going to win because he has the registration, which gives him exclusive federal rights to the trademark everywhere in the U.S.A. except where you were already operating. You don’t have to close in Albuquerque, but Colorado belongs to the New Jersey guy. He might even get Las Cruces.

To make it worse, suppose the New Jersey guy decides he wants to knock you out of Albuquerque, too. He sues you again. The law is on your side this time, but winning will be hard because the New Jersey guy’s federal registration gives him huge procedural advantages in the lawsuit. You have to prove everything about your ownership of the brand and your history of using it in Albuquerque, while the New Jersey guy doesn’t even have to prove he ever used the brand.

Moral of the story: if you care about your brand, win the race register the trademark.

You can even register a brand before it launches. It’s called an “intent-to-use” application. If you have settled on a name and you’re going to invest in it, file your trademark registration application in advance so no one else gobbles up the rights first.

When should I not apply to register a trademark?

You shouldn’t apply to register a trademark if it’s not important to you. That’s a waste of time and money. Consider whether it’s time to re-brand.

You shouldn’t apply to register a trademark if it’s clearly unregistrable. For example, a completely generic name cannot be registered, like “The Bookstore” for a bookstore. There are other rules about registration. But if a particular trademark is important to your business, a good attorney might find a work-around to get you some level of protection.

Should I do the registration myself or hire an attorney?

Using an attorney is not legally required, but it’s often a good idea. Here’s the value a trademark attorney will provide that is hard to replace:

·        Does the work in just a few hours because he’s familiar with the process.

·        Provides confidence that things were done right.

·        Crafts the application to maximize the breadth of your trademark rights.

·        Avoids unnecessary denials of registration.

·        Makes legal arguments to counter opposition from the USPTO examiner or another business owner.

·        Determines which of your trademarks are legally “strong” or “weak,” so you can prioritize.

You decide how important these things are to you.

The self-registration route saves you the attorney’s fee, but you run the risk of making mistakes, which could result in a failed application or an invalid or low-quality registration. If you end up calling an attorney to try to fix things, you’ll pay more than if you had worked with an attorney from day one.

How much does it cost to register a trademark?

I can’t speak for others, but for me think a baseline of two or three hours of attorney time, plus USPTO filing fees—total, start-to-finish, something under $1,000 if it goes smoothly.

If the USPTO examiner raises objections to the trademark’s registrability or another business owner files an opposition to the application, that makes a bigger project. It may be necessary to prepare legal arguments or prove the history of your trademark use.

I prepare registration applications carefully to make these scenarios less likely, but there’s always a chance, especially if your trademark is legally “weak” or you’re trying to thread a path through similar registrations that other people filed first.

What other security measures should I take to protect my trademark rights?

Commercially strong trademarks are legally strong trademarks, so use good brand management. For example, use the same forms of your trademarks consistently so customers get a very clear brand impression. They should see the same logo on your website, your Facebook, your ads, everywhere. The different exposures reinforce each other, and they leave no doubt in the customer’s mind that they are all messages from the same great company.

Also, don’t let anyone else use your trademarks. Your brand is you. Letting someone else use it is like letting someone else sign your name. The exception, of course, is licensing, where someone essentially rents your reputation, such as in franchising or merchandising. Always put a licensing agreement in writing, and always have a trademark lawyer do it, because there are certain clauses and legal phrases a trademark license has to have to keep it from voiding your trademarks. Please don’t play around with this.

Enforcement, federal registration, and good brand management are the key security measures that apply for almost every business, but there are other protections to consider for the most robust protection or special circumstances. Talk to your trademark lawyer about whether anything else would be prudent and cost-effective for you.

This blog post is intended only as general information and must only be used as such. Nothing in this blog or website is legal advice. Every person and business has unique circumstances.

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