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Common Trademark Issues Facing New Businesses

3/10/2017 | By: David T. Azrin, Esq. | GDB 2017 Spring Newsletter
If I come up with a brand name for my business, product or service, how can I be sure that I have the legal right to use it?

Trademark rights are generally established based on who used the trademark first (not who registered it first). To be sure you can legally use the name, you must try to find a name that nobody has used before for your type of product or service (or a related product or service that people would expect would come from the same source).

This has become increasingly difficult, as many businesses find that almost every name they want to use is already being used by somebody else.

Trademark rights prevent someone else from using your name or a similar name for the same type of product or service if consumers are likely to be “confused” as to whether the other company’s products or services come from you.

When you come up with a new name, the first step in determining whether you can legally use the name is to perform a “knock out” search. This is accomplished by performing internet searches for the name, and by checking the trademark office website (which is very user friendly, to see if anybody else is already using the name or has registered the name for a product or service or related product or service, which is likely to cause customer confusion. 

If the “knock out” search has not uncovered any other businesses that are already using the trademark for a similar product or service, you should ask a professional service, such as Thomson, to perform a more comprehensive search, which usually costs less than $1,000 per trademark.

Once you have determined that there are no conflicting prior uses, you should promptly register the name with the trademark office website. You should also obtain the internet domain name as well as any similar domain names, including domain names with different endings, such as .com, .net, .org, or .us.

By filing the trademark registration application, you will be putting the world on notice that you are claiming the mark as your own, so that if anyone in the future is thinking about using the name, they will be deterred from using it because they will see that you have already registered it. 

The trademark office does not check to see if other people were using it before. Rather, it only checks to see if anyone ever registered the name or a similar name. It also checks to make sure it is not merely a descriptive or generic mark, which cannot be registered. For example, you cannot register and protect the name “gas station” for a gas station, or “tables” for a store that sells tables.

When a trademark registration application is filed, the application must be filed based on either “actual use” or “intent to use.” If the application is filed based on actual use, this means that you have already started using the name. If you file based on “actual use,” then the application must include an example (a “specimen”) showing how you are actually using it. The application process, from the filing of the application to the issuance of the registration, normally takes about 8-12 months.

Alternatively, the application can be based on “intent to use.” In this case you certify that you have a good faith intent to use the name. You have to start using it and submit evidence that you are using it within two years (provided that you file extension requests every six months). The law says that if you file an “intent to use” application request that is eventually granted, then you will be considered to have started “using” the mark on the date you filed the application (rather than the later date of actual use). This is the only major exception to the general rule that trademark rights are based on the date of first actual use.

How do I protect my brand?

When the trademark office issues the registration, you should immediately start using the ® symbol on your website and all of your marketing materials. This puts the world on notice that you have registered the mark and you are claiming it as yours. You are not allowed to use the ® symbol before you obtain the registration.

A second part of protecting your brand is taking prompt action against anyone who starts using the name or a similar name. This may mean sending a formal letter in which you demand that the competing user “cease and desist” from using your name, and then taking legal action if the user does not comply. If you allow other people to use the name, a competing user may argue in court that you waived or lost your right to stop other people from using the name because of your inaction. In special situations, it may be appropriate to enter into a “co-existence” agreement. Under this type of agreement, you and the other user agree that you both can continue using the trademark, provided that such use is restricted to a particular geographic area or type of good or service, in a manner that is not likely to cause customer confusion.

You should also monitor whether other people have started using the name by doing periodic searches on the internet and the trademark office website. You can pay a private service to conduct such searches and to notify you if anyone starts using your name or a similar name, applies for trademark registration of your name or a similar name, or applies for a domain name that contains your name or a similar name.