Trademarks for Business and Products in Commerce: An Overview of Trademarks
A trademark represents one of several types of intellectual property protected by US law. Trademarks are protected in the US at both the federal and state level.
• Identifies a single source of origin for goods and services.
• Distinguishes the owner’s goods and services from those of others.
• Provides the owner of the mark with the right to prevent others from adopting similar marks likely to cause confusion in the marketplace.
This Note provides an overview of US trademark law and discusses:
• The legal framework for trademark protection.
• The nature of trademark protection.
• The acquisition of trademark rights.
• The maintenance of trademark rights.
• The enforcement of trademark rights.
• Proper trademark use.
• Loss of trademark rights.
• Ways trademark rights can be exploited.
Legal Framework for Trademark Protection in the US
Trademarks may be protected under both federal and state law.
At the federal level, the primary source of trademark protection is the Lanham Act (15 U.S.C. §§ 1051 to 1141n).
The US Patent and Trademark Office (USPTO) is the federal agency that administers the Lanham Act and regulates registration of trademarks on the federal trademark register. UPSTO trademark regulations appear in Title 37 of the Code of Federal Regulations (37 C.F.R. §§ 2.2 to 7.41).
The USPTO website provides legal and regulatory information, and procedural guidance on the federal trademark application process. The Trademark Manual of Examining Procedure, published by the USPTO, provides detailed information concerning examination of a federal trademark application.
Trademarks are protected at the state level by:
• Common law unfair competition principles.
• State trademark statutes.
For more information on state trademark laws, Contact Kaplan & Associates.
Trademark rights are territorial in nature. Generally, rights in one jurisdiction do not give rise to rights in other jurisdictions. The US is a party to certain international agreements that provide various benefits for US companies seeking trademark protection outside of the US and for foreign companies seeking protection in the US, including:
• The Paris Convention for the Protection of Industrial Property.
• The Madrid Protocol.
Types of Trademarks
Under the Lanham Act, a trademark generally includes any of the following when used to identify and distinguish goods or services:
The term service mark is sometimes used to refer to a trademark that is used for services.
In some circumstances trademarks may consist of:
For more on trademark protection for these less common trademarks, contact Kaplan & Associates.
Under certain circumstances trade dress may be protectable as a trademark.
Collective Marks and Certification Marks
The Lanham Act also recognizes and provides for registration of:
• Collective marks.
• Certification marks.
For more information on the various types of trademarks, contact Kaplan & Associates.
Requirements for Federal Trademark Protection
To be protected as a trademark at the federal level, a designation must be:
• Used in interstate commerce.
Distinctiveness is the ability of a designation to identify a single source of goods or services. Distinctiveness may be either:
A mark is inherently distinctive if it is immediately capable of identifying a source of origin for a good or service.
Inherent distinctiveness is generally analyzed along a spectrum of distinctiveness ranging from generic terms, which are not protectable under any circumstances, to highly distinctive fanciful marks, which have the broadest scope of inherent protection.
For more information on inherent distinctiveness, contact Kaplan & Associates.
Some terms that are not inherently distinctive may acquire distinctiveness (also known as secondary meaning), and be capable of protection as a trademark, through use and promotion over time. For example, terms that describe a product attribute or characteristic may be protectable if they acquire distinctiveness. Under the Lanham Act, a mark that has been in substantially continuous and exclusive use for five years is entitled to a presumption of acquired distinctiveness (15 U.S.C. § 1052(f)).
Use in Commerce
In the US, trademark rights at the federal level arise through use of a protectable mark in interstate commerce in connection with goods or services. For more information on what qualifies as use in commerce, contact Kaplan & Associates.
At the state level, trademark rights arise through use of the mark in commerce within the state.
Trademark Searching and Clearance
Before using or seeking to register a trademark, a company should conduct trademark clearance. Trademark clearance typically involves:
• Conducting one or more trademark searches, including:
• preliminary or “knock out” searches; and
• full availability searches.
• Analyzing the search results.
• Taking additional steps to attempt to assess and mitigate any risks posed by potential obstacles disclosed in the searches, for example by:
• conducting use investigations of potentially conflicting marks;
• seeking consent or coexistence agreements from third parties that own potentially conflicting marks; or
• petitioning to cancel conflicting registrations.
For more information on trademark searching and clearance, contact Kaplan & Associates.
Registering a Trademark
In the US a trademark may be registered at the federal or state level.
At the federal level, trademarks are registered under the Lanham Act in the USPTO. The USPTO administers two trademark registers:
• Principal Register. The Principal Register is the primary register of trademarks the USPTO maintains, subject to additional registrability requirements, and is reserved for marks that are inherently distinctive or that have acquired distinctiveness.
• Supplemental Register. The Supplemental Register is the secondary register and is reserved for certain nondistinctive marks that do not inherently qualify for registration on the Principal Register, but that are capable of distinguishing goods or services. If a mark on the Supplemental Register acquires distinctiveness through use and promotion over time, the owner may file a new application to register the mark on the Principal Register.
Term of a Federal Trademark Registration
A federal registration on the Principal Register or Supplemental Register is effective for ten years, subject to maintenance requirements, and may be renewed for additional ten-year periods if certain requirements are met.
Eligibility for Registration on the Principal Register
Not all words, symbols, logos, and devices can be registered as trademarks. The Lanham Act and USPTO regulations specify the eligibility of trademarks for federal registration.
Certain subject matter may not be registered under any circumstances, including:
• Marks likely to cause confusion as to source with a previously used or registered mark.
• Generic terms.
• Deceptive matter.
• Functional matter.
• Matter that falsely suggests a connection with a person or institution.
• Government insignia.
• Names, portraits, and signatures identifying particular living individuals without their written consent.
The Lanham Act, on its face, also still prohibits registration of immoral, scandalous, and disparaging marks (15 U.S.C. § 1052(a)). However, the US Supreme Court has invalidated these restrictions as unconstitutional under the First Amendment (Iancu v. Brunetti, 2019 WL 2570622 (U.S. June 24, 2019) (affirming Federal Circuit decision that Lanham Act immoral and scandalous mark proscriptions are unconstitutional restrictions on free speech); Matal v. Tam, 137 S. Ct. 1744 (2017) (holding that Lanham Act disparagement proscription constitutes unconstitutional government regulation of expression in violation of the First Amendment)).
Certain designations may be registered only on a showing of acquired distinctiveness (secondary meaning), including designations that are:
• Merely descriptive of the goods or services.
• Primarily geographically descriptive of the goods or services.
• Primarily merely a surname.
For more information on eligibility for federal trademark registration on the Principal Register, contact Kaplan & Associates.
Benefits of Federal Registration
Although not required for the acquisition and protection of trademark rights, federal registration of a mark on the Principal Register confers significant benefits on the trademark owner, including evidentiary presumptions relating to:
• Ownership of the mark.
• Validity of the mark.
• The exclusive right to use the mark nationwide in connection with the goods or services covered by the registration.
• The right to use the registered trademark symbol: ®.
Registration of a mark on the Supplemental Register confers certain benefits, including the right to use the registered trademark symbol, but not the evidentiary benefits of registration on the Principal Register.
For more information on the benefits of registration of a mark on the Principal Register and the Supplemental Register, contact Kaplan & Associates.
Most states have statutes for registering trademarks used in the state. Requirements for obtaining state registrations, and their terms, vary by state. Generally a mark must be used in commerce within the state before a registration can be obtained. A state registration may offer some procedural and evidentiary advantages in litigation. For more information on state trademark registration, contact Kaplan & Associates.
Federal Registration Process
If a company decides to seek registration of a mark after the search and clearance process has been completed, the next step is filing an application with the USPTO. Trademark applications are typically filed online through the USPTO’s Trademark Electronic Application System.
The most common trademark application filing bases are:
• Use in commerce. A use-based (Section 1(a)) application is based on existing use of the mark in interstate commerce (15 U.S.C. § 1051(a)).
• Intent to Use. An intent-to-use (ITU or Section 1(b)) application is based on a bona fide intent to use the mark in commerce in connection with the goods or services listed in the application, even though actual use of the mark has not yet taken place (15 U.S.C. § 1051(b)).
Applications to register a trademark on the Supplemental Register must be based on use in commerce.
For more information on filing bases, contact Kaplan & Associates.
A trademark application filed with the USPTO must comply with certain filing requirements and formalities.
After an application is filed, it is assigned to a trademark examining attorney for examination. The examining attorney reviews the application for:
• Compliance with formal application requirements.
• The eligibility of the trademark for registration.
For more information on the USPTO examination process, contact Kaplan & Associates.
If the examining attorney identifies any deficiencies in the application or issues pertaining to the registrability of the mark, he issues an Office Action identifying the deficiencies and issues. The applicant typically has six months from the mailing date of the Office Action to respond. The examining attorney may issue additional Office Actions if the applicant does not provide a satisfactory response.
In some cases where an application is refused based on a finding of likelihood of confusion with a prior registered mark, the applicant may be able to overcome the refusal through a consent agreement with the prior rights owner.
An application for the Principal Register that passes through examination is published for opposition in the USPTO’s Trademark Official Gazette. Applications to register marks on the Supplemental Register are not published.
For more information, contact Kaplan & Associates.
Once a mark is published for opposition, a party with standing may oppose registration of the mark by filing a Notice of Opposition within the opposition period or any applicable extension of the period.
If no opposition is filed, the next step in the registration process depends on whether the mark is the subject of:
• A use-based application. A mark that is the subject of a use-based application proceeds to registration if no opposition is filed.
• An intent-to-use application. A mark that is the subject of an intent-to-use application may not be registered until the applicant files a proper Statement of Use.
For more information on the process for registering a trademark with the USPTO, contact Kaplan & Associates.
Maintaining Trademark Rights
Trademark rights are subject to certain maintenance requirements for both common law rights and registrations.
Maintaining Common Law Rights
Common law rights in a trademark are maintained through bona fide use of the mark in commerce as a source identifier for goods or services. Absent federal registration, rights are generally limited to the geographic area in which the mark is used. Non-use of a mark may result in abandonment of the mark.
Trademark rights may be weakened, or even lost, through certain trademark owner conduct including:
• Misuse of the trademark.
• Failure to take appropriate action against third parties that infringe or otherwise misuse the mark.
For information on proper trademark use and protection, contact Kaplan & Associates.
Maintaining Federal Trademark Registrations
A federal trademark registration is maintained by:
• Continuous and consistent use of the mark in commerce.
• Compliance with registration maintenance formalities, including timely filing of:
• declarations of continued use or excusable nonuse; and
• renewal applications.
For more information, contact Kaplan & Associates.
The owner of a mark registered on the Principal Register may, subject to certain requirements, file a Declaration of Incontestability to seek incontestable status for the mark. A Declaration of Incontestability may be filed once the mark has been in continuous use in commerce for at least five consecutive years after the registration date. The declaration may be filed within one year after the expiration of any five-year period of continuous use following registration.
Incontestable status confers significant benefits on the trademark owner. For example, an incontestable registration is, subject to certain exceptions, conclusive evidence of the mark owner’s exclusive right to use the mark for the goods or services listed in the registration.
A registration on the Supplemental Register is not eligible for incontestable status.
Maintaining State Trademark Registrations
Requirements for maintaining state registrations vary by state.
Enforcing Trademark Rights
To maintain their rights, trademark owners must be diligent in protecting their marks by taking appropriate enforcement action against infringement and other misuse by third parties. In the US, the principal means of trademark enforcement are:
• Cease and desist letters.
• Litigation asserting infringement and related claims.
• Opposition and cancellation proceedings in the Trademark Trial and Appeal Board (TTAB).
Cease and Desist Letters
Trademark owners faced with infringement or misuse of their marks by third parties typically send cease and desist letters to attempt to resolve the matter without the need for formal legal action.
For more information on trademark cease and desist letters contact Kaplan & Associates.
At the federal level, the Lanham Act provides causes of action for infringement of:
• Federally registered trademarks, under Section 32 (15 U.S.C. § 1114).
• Marks that are not federally registered, under Section 43(a) (false designation of origin) (15 U.S.C. § 1125(a)(1)(A)).
In infringement litigation, owners of federally registered marks typically assert false designation of origin (unfair competition) claims under Section 43(a), along with infringement claims under Section 32. Depending on the ground for cancellation, a Section 43(a) claim may survive a cancellation of the owner’s registration in the litigation because the 43(a) claim does not depend on the existence of the registration.
Federal and state courts have concurrent subject matter jurisdiction over Lanham Act claims. Most suits are brought in federal court, however, because federal judges have greater familiarity with the Lanham Act.
Likelihood of Confusion
Likelihood of confusion is the test for trademark infringement. Likelihood of confusion refers to confusion in the marketplace over source, sponsorship, or affiliation resulting from the simultaneous use by different parties of identical or similar marks for their respective goods or services. Likelihood of confusion is analyzed according to a multi-factor test. The specific tests vary somewhat from circuit to circuit, but common factors examined include:
• The strength of the plaintiff’s mark.
• The similarity of the parties’ marks.
• The relatedness of the parties’ goods or services.
• The similarity of the parties’ trade and marketing channels.
• The defendant’s intent.
• The existence of actual confusion.
For more information on the likelihood of confusion analysis in infringement litigation under the Lanham Act, contact Kaplan & Associates.
Principal Remedies for Infringement
Principal remedies available in trademark infringement actions under the Lanham Act include:
• Preliminary and permanent injunctive relief.
• Actual damages.
• Profits of the infringer.
• Enhanced damages for willful infringement.
• Attorneys’ fees in exceptional cases.
For more information, contact Kaplan & Associates.
Principal Defenses to Infringement Claims
Principal defenses to infringement claims include:
• Challenges to the ownership, validity, and enforceability of the plaintiff’s mark, for example, challenges that the mark is generic, abandoned, or functional.
• Descriptive fair use.
• Nominative fair use.
• First Amendment protection, including parody.
• Equitable defenses, including laches.
Additional Lanham Act Claims
Trademark owners may also protect their marks through claims under the Lanham Act for:
• Unfair competition under Section 43(a). Court decisions have established that Section 43(a) of the Lanham Act provides a cause of action for infringement of trademarks not registered with the USPTO. Section 43(a) also provides a cause of action for other acts likely to cause consumer confusion or deception (15 U.S.C. § 1125(a)(1)(A)).
• Dilution. Dilution is the lessening of the capacity of a famous mark to identify and distinguish goods or services. Dilution may be by:
• blurring; and
• Cyberpiracy. The Lanham Act provides a cause of action for trademark owners against cyberpirates who engage in bad faith registration or trafficking in domain names for profit (15 U.S.C. 1125(d)).
• Trademark counterfeiting. Trademark counterfeiting is a form of infringement involving the use of a counterfeit of a registered mark. The Lanham Act provides a trademark owner with additional potential remedies for acts of trademark counterfeiting.
Trademark owners, subject to various requirements, may also protect their interests through claims under state statutes and common law, including claims for:
• Common law trademark infringement and unfair competition.
• Unfair competition under state statutes.
• Dilution under state statutes and common law.
• Counterfeiting under state statutes.
For federally protected marks, state claims are typically asserted together with federal claims under the Lanham Act.
Recording Trademarks with US Customs and Border Protection
To help combat counterfeiting and gray market activities, trademark owners may record their trademark registrations with US Customs and Border Protection (CBP).
Opposition and Cancellation Proceedings
Trademark owners may, under certain circumstances, oppose registration of a trademark that is the subject of a federal trademark application for registration on the Principal Register. Principal grounds to oppose registration of the applied-for mark include that the mark is:
• Likely to cause consumer confusion about the source of goods or services.
• Likely to dilute the distinctiveness of an owner’s famous mark.
• Generic for or merely descriptive of the goods or services.
Trademark opposition proceedings are conducted before the TTAB within the USPTO.
Most opposition proceedings settle before trial, often with the parties entering into an agreement for their marks to coexist in the marketplace subject to certain restrictions.
Cancellation proceedings in the TTAB allow parties to cancel registrations after the USPTO has issued the registration. The grounds for cancellation are largely consistent with the grounds for opposition, but are limited once a registration has been in existence for five years.
Proper Trademark Use
To protect and keep their rights, trademark owners must both:
• Take appropriate measures to enforce their rights against third parties.
• Ensure that they use their marks properly to maintain the brand name significance of the marks.
If trademarks are not used properly, their strength and scope of protection may be eroded and, in a worst case scenario, the marks may become generic if their source-identifying significance is lost.
For more information on proper trademark use, contact Kaplan & Associates.
Exploiting Trademark Rights
Trademarks are property and are transferable. The value of a trademark is based on its goodwill and its ability to exclude others from using similar marks likely to cause marketplace confusion. In addition to actively enforcing its trademark against third parties, a trademark owner may be able to exploit its trademark in various ways, for example by:
• Licensing the mark.
• Selling the mark.
• Using the mark as collateral to secure financing.
Trademark owners may license their marks to others to use, subject to various terms and conditions agreed on by the parties, including exclusivity, licensing fees, and royalties. Trademark licenses can be recorded with the USPTO, but recordation is not required.
The trademark owner must monitor the nature and quality of the licensee’s goods and services. Failure to exercise adequate quality control can lead to abandonment of the licensed trademarks.
For sample arms-length trademark license agreements, contact Kaplan & Associates.
For an intercompany license agreement, contact Kaplan & Associates.
For a checklist of common issues that a licensor should consider when starting a trademark licensing program, contact Kaplan & Associates.
A trademark owner may be able to obtain value by selling and assigning its trademarks and any associated registrations or applications.
Both registered and unregistered trademarks can be assigned, but the assignment of the mark must include the goodwill associated with the mark. An assignment of a registered trademark must be in writing. Recordation of a trademark assignment with the USPTO is not required to make a transfer effective, but provides certain benefits. There are restrictions on the assignment of intent-to-use trademark applications.
For more information on trademark assignments, contact Kaplan & Associates.
Using Trademarks as Collateral
State UCC Article 9 provisions govern perfection of security interests over trademarks. While the USPTO accepts documents evidencing grants of security interests in federally registered trademarks and trademark applications, these recordings are not necessary or effective to perfect the lender’s security interest. However, USPTO recordation is recommended, as it may provide protection against subsequent bona fide purchasers and mortgagees.
Loss of Trademark Rights
There are various ways that trademark rights may be lost. The most common means for losing rights include:
• Abandonment of a mark through nonuse.
• Abandonment of a mark through uncontrolled licensing.
There are other ways that trademark rights may be limited or lost through conduct of the owner, including improper assignments.
Abandonment Through Nonuse
In the US, a trademark must be used to keep rights in the mark. If a mark is not used, it is subject to abandonment. Under the Lanham Act, abandonment occurs when the trademark owner both:
• Discontinues use.
• Has an intent not to resume use.
(15 U.S.C. § 1127.)
Under the Lanham Act there is a rebuttable presumption of abandonment after three consecutive years of nonuse (15 U.S.C. § 1127).
Abandonment Through Uncontrolled Licensing
The Lanham Act provides that a mark is abandoned if, through conduct of the trademark owner, the mark either:
• Becomes the generic name for the goods or services.
• Otherwise loses its significance as a trademark.
(15 U.S.C. § 1127.)
One way that a mark may lose its trademark significance is if the owner licenses the mark without exercising adequate quality control over the nature and quality of the licensed goods or services. This is commonly known as naked licensing.
Trademark rights can be lost if the mark’s primary meaning to the relevant public becomes the name of the genus of the goods or services.
Improper Trademark Assignments
Improper trademark assignments may also lead to the limitation or loss of trademark rights. Improper assignments include:
• Assignments in gross.
• Improper assignments of intent-to-use trademark applications.
THIS PUBLICATION DOES NOT CONSTITUTE LEGAL ADVICE, BUT IS A GENERAL OUTLINE FOR DISCUSSION PURPOSES. THIS PUBLICATION WILL NOT BE REVISED PAST ITS PUBLICATION DATE THEREFORE ANY READER SHOULD CHECK THE STATUS OF THE LAW, AND CONTACT AN ATTORNEY WITH ANY QUESTIONS PRIOR TO ANY ACTION. THIS PUBLICATION ONLY OUTLINES FEDERAL LAW, COLORADO LAW, AND NEW YORK LAW WHERE SPECIFICALLY STATED.