Trademarks, Part I

Trademarks – Cornerstone of Business Image and Goodwill Value
Part I: What is a Trademark, and What Benefits Do They Offer?
by Jacques M. Dulin, Esq., Innovation Law Group, Ltd.
 
          Trademarks have incredible value and importance to businesses as they are the means to “bank” the value of business identity, image and goodwill built-up over time. But these key and valuable business assets can be misused, lost, trivialized or diluted through misunderstanding of their value and use. This article is the first in a series of three that form a “clip-&-save” primer for all businesses, be they start-ups, sole proprietors or established area companies, whether selling goods or services.
 
            Scenario: You are starting up a semi-pro hockey league on the Olympic Peninsula and kicking around some team names and logos: Port Townsend Strait Shooters; Sequim Lavender Squids; Port Angeles Halos: Forks Logloaders; Neah Bay Orcas; The Joyce BigBrothers; Lake Crescent Mooners; Carlsborg BeerBuoys; Makah Makos; S’Klallam Eagles, etc. The business model you developed under the guidance of the Clallam Business Incubator (Lincoln Center in PA or CenturyTel Center in Forks) shows that you are not going to break even unless you get substantial revenue from merchandise sales: sales of T-shirts, jerseys, caps, jackets, key chains, hockey pucks, beer mugs, pennants, bumper stickers, etc., that have the team logos on them. Your market research showed that $150MM of team logo merchandise was sold the first year the San Jose Sharks were in the NHL, so protecting the name is a top priority.
           
          How do you make sure you do not get ripped off by someone copying the logo and selling home made T-shirts, sweatshirts etc outside the arena, or over the Internet?  What’s the process of protecting the logo, and what protection should you get: Copyrights in the name; Trademarks; Patents on the design? How do you be sure someone does not try to ride on your coat tails: next thing you know there is a Sequim Squids Happy Hour at a bar in Gardiner.  Are there other teams using the name Strait or Straight Shooters that might sue to stop your use of the name?  Can you use the city or tribe name in the team name?  What’s this ®, and ™ stuff all about, anyway?        
             These questions are answered by a body of federal and state laws (15 U.S.C. §1051 et seq. and Chapter 19.77 of the Revised Code of Washington), which establish a procedure for obtaining exclusive rights in trademarks.  Trademarks are the primary vehicle for building value in business image and goodwill.
           A trademark is a word, phrase, symbol or design, or a combination of these that identifies and distinguishes the source of the goods of one party from those of others.  A service mark is the same as a trademark, except that it distinguishes the source of a service rather than a product.  By registering the mark and adhering to appropriate usage standards, the right to use the trademark or servicemark becomes exclusive, and, in time, incontestable.
          Many different types of trademarks and servicemarks are available. Examples include marks protecting: product name; a company, group or team name or slogan; colors, symbols and font styles (logos); regional origin (e.g., certification of farm products from a certain region); certification of quality (e.g., an agricultural cooperative’s products that meet its standards); collective membership mark (again, the agricultural co-op, this time membership, e.g. Lavender Growers Association, Peninsula Home Builders Association, Realtors Association) and product and/or site appearance (packaging; external and internal store décor; product shapes, and even the look and feel of your business’s web page). 
            Here are a few you will recognize: the Coca-Cola cursive logo; Ford set in a blue oval; the shape of the Haig & Haig “”pinch” whiskey bottle; the UPS shield with a package above the letters and the slogan “What can Brown do for you?”; the gold McDonald’s arches; the “doink-doink” sound of Law and Order; and slogans such as “Don’t leave home without it (American Express); “It’s everywhere you want to be” (Visa); and, the ever-popular “Transforming Ideas into Business Assets” (legal and business service mark for Innovation Law Group). 
          You can establish common law rights in a mark by selection, adoption and legitimate use of the mark. Indeed, you don’t have to register it, but that can be short-sighted, as explained below. Obtaining a Federal Trademark Registration on your mark provides several very important benefits, including:
  • notice to the public of your claim of ownership in the mark;
  • a legal presumption of your ownership of the mark
  • your exclusive right to use the mark nationwide;
  • the ability to stop others from using your mark through suit in Federal court;
  • the use of the U.S. registration as a basis to obtain registration in foreign  countries; and,
  • the ability to file with the U.S. Customs Service to prevent importation of foreign goods that use your mark or a similar one.
          This article is meant as informational and educational only, not to serve as specific legal advice or opinion.  Mr. Dulin is a Registered Patent Attorney admitted to practice before the United States Patent & Trademark Office and is a member in good standing of the Bars of WA, CA and IL. He is the principal of Innovation Law Group, Ltd. of Sequim, WA.  He can be reached at 360-681-7305.
          ILG has represented many local, regional and national companies and individuals in trademark matters for many years, including The 3 Crabs, Olympic Cellars Winery, InsideOut Solutions, Present Events, Jace the Real Estate Company, Haven Trapping Company, the San Jose Sharks NHL team, the San Francisco Bay Blackhawks soccer team, the Rhinos national roller hockey league team,  Compaq Arena, Paul Harvey “The Rest of the Story,” Sweet Swing Trainer, The Keith Company, J. Lohr Winery, Mariani Packing Co, Gamma Photo Labs, Ingenuity Software, Industrial Resources and many others.
 

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