By: Kelly Donohue and Radhika “Ronnie” Raju, Wilkinson Barker Knauer, LLP
In today’s digital economy, trademarks are often the most valuable assets that a business owns. For example, in 2015, Google’s trademark portfolio was estimated to be worth $76 billion, which constituted almost one third of the entire value of the company. Microsoft clocked in at $67 billion, with Verizon close behind at almost $60 billion. While you may not hit 11-digit figures like these intellectual property behemoths, a smart trademark strategy can put you on the right course. This blog is the first of a five-part series that will help you understand trademarks and how they function, so that you can maximize the value of your own trademark portfolio. We’ll run the other four articles in the weeks to come. So keep reading!
So, what is a trademark? A trademark identifies products or services as coming from a particular source. Although a trademark is usually a word, a phrase or a design, it can also consist of or incorporate features such as color, smell, taste, shape (product configuration), touch, motion and sound. But not all trademarks are created equal. A strong mark can preclude the use by others of somewhat similar marks for goods and services that may not be directly competitive. In contrast, a weak mark may only be entitled to protection against the use of an identical mark for the same goods and services. How do you select a trademark that will most effectively help you build your brand?
The equation is simple: the more distinctive the mark as applied to a type of goods or services, the stronger it is and the easier it is to register and protect. There are five categories in which trademarks can be classified, listed below from strongest to weakest:
- Fanciful or coined marks are terms that are made up and have no meaning other than as a trademark. These are the strongest kind of mark and offer the broadest scope of protection. Examples of fanciful marks include KODAK for film, EXXON for gasoline and VIACOM for broadcasting services. The disadvantage to a fanciful mark is that it takes more marketing resources to help consumers remember and associate the mark with a particular company and create brand awareness.
- Arbitrary marks are common words that are found in the dictionary, but do not have any connection with the goods or services that they brand. Famous arbitrary marks include APPLE for computers, LOTUS for software and FOX for television broadcasting services. As with fanciful or coined marks, arbitrary marks receive a broad scope of protection.
- Suggestive marks suggest some feature or advantage of a particular product or service, but do not immediately describe the goods or services. It requires some thought or imagination for the consumer to reach a conclusion as to the goods or services. Examples include COPPERTONE for suntan lotion and GREYHOUND for providing transportation by bus.
- Descriptive marks immediately convey some aspect of the goods or services. Examples include PARK N’FLY for airport parking lot services and YOUR #1 ROCK STATION for radio broadcasting services. Descriptive marks are entitled to no protection unless the owner of the mark can show “acquired distinctiveness,” which we wrote about here in connection with questions as to whether the podcast SERIAL could trademark its name. This showing can be made in a number of ways, such as a consumer survey, establishing exclusive use of the mark for at least five years and detailing the extensive advertising efforts that have been undertaken to create brand awareness among consumers.
- Generic terms are words that are the common name of a particular category of goods or services, such as APPLE for apples or NEWS STATION for broadcasting services. Generic terms are incapable of functioning as trademarks and can neither be registered nor appropriated to the use of one owner. Sometimes previously strong trademarks become generic due to an inadequate protection strategy of the owner. If consumers come to understand the trademark to be the name of the product itself as opposed to identifying an exclusive source of the products, the mark essentially dies. Examples of this include aspirin for acetylsalicylic acid and escalator for a moving staircase.
Now that you have a better understanding of what trademarks are, why are they so important? In today’s world, where attention spans are reduced to the size of a Twitter feed, companies now more than ever need the ability to catch the consumer’s eye and cut through the crowded marketplace. A good branding strategy can help you convey a range of information, from price point to target audience to the types of goods and services you are offering. Likewise, it can help boost your online presence – having a consistent, thoughtful branding strategy across your media platforms and social media feeds can help your customers find you quickly. Finally, a good brand can lead to new licensing opportunities and revenue streams.
So, when you are choosing a mark, make sure that it is distinctive and strong, or otherwise be prepared to spend time and money convincing the Trademark Office or a court that it is protectable (and potentially fending off potential third-party uses of the mark; after all, if it is descriptive, others may feel that they can use it freely!). Consider how you use the mark online, on your website, social media, etc. to make sure you are branding across all of your online properties consistently. And finally, make sure you are keeping track of your trademarks, as these are valuable assets that can grow in value over time (like real property, they can be bought, sold, licensed, used as collateral, etc.). Also, make sure to have a trademark attorney conduct a clearance search before you start using the mark, to ensure that no third parties are already using and/or have already registered the mark. The last thing you want is do is to spend valuable time and money plastering your new mark all over your media outlets (commercials, websites, flyers, etc.) only to find that someone else had first dibs on the mark, forcing you to re-brand and go back to Square One. We will help you avoid this pitfall in our next installment, Trademark Basics, Part Two: How Trademark Searches Can Keep You Out of Legal Hot Water.
Reprinted by permission.