Why Trademark Registration Should Be Important To Small Business Owners

why-trademark-registration-should-be-important-to-small-business-owners

by Rosezena J. Pierce, Esq

What is a trademark?

Trademarks can be a word mark, a symbol, a slogan, and even a sound. Trademarks help consumers identify, and distinguishes, the owner of the goods and services of one party from that of others in the same or similar trades. For example, the sneaker company Nike uses various trademarks so that consumers can identify their products and distinguish their products from competitors, such as, Reebok, Adidas, and Under Armour. Some of Nike’s most famous trademarks consist of the word “Nike”, the swoosh symbol, and the slogan “Just Do It”. With these trademarks a consumer can immediately recognize an item as a Nike owned product.

Benefits of Trademark Registration

Small Business Owners can gain a lot of value in registering their company’s trademarks. Trademark registration will help consumers set owners apart from their competitors, but more importantly it will be easier to pursue a legal claim against any other person or entity that directly or indirectly copies their trademark.

Under the laws of trademark infringement, trademark registration grants presumed ownership rights in that trademark. This process, will make any legal claim against another for infringement easier and allow for damages.

Also, trademarks are valuable company assets. Trademarks can increase the company’s value over time. Trademarks can make brand expansion easier for customers to understand the company’s growth. Trademarks can also generate more revenue for the company via license deals. Lastly, trademarks can be used as collateral for business loans.

State Registration vs. Federal Registration

Trademark registration may be completed on both the federal and/or state level. A business owner would register on the state level if they only serviced customers in that particular state. For example, if a person owns one coffee shop, named “Boldee Coffee” and Boldee Coffee shop sits in the State of Illinois and only services customers in Illinois, then it would only qualify to register “Boldee Coffee” in Illinois as a trademark.

On the contrary, if a website is created, BoldeeCoffee.com, which contains product and pricing information available for nationwide shipment in addition to a store in Illinois, the business would then qualify for federal trademark registration. The shipping to customers outside of the State of Illinois creates interstate commerce, which is one of the two requirements for federal registration.

If a business qualifies for federal registration, it is always better to register on a federal level versus the state level because federal registration offers more legal protection and broader trademark rights.

A popular trademark case Burger King of Florida, Inc. v. Hoots (1968) set precedence for this issue.

In or about, 1957 there was a small, mom and pop restaurant in Southern Illinois that operated under the name Burger King with trademark registration in the state. When Burger King LLC (which we all know today as the large franchise) moved to Illinois from Florida in early 1960s the owner of the smaller restaurant assumed they had a monopoly in the state of Illinois for usage of the name. Burger King LLC was able to continue to do business in Illinois under its popular name while restricting the smaller restaurant not to expand outside of 20 miles of their location. The court reasoned that because Burger King LLC was registered under federal rules the larger company’s federal protection was broader than state protection. Not only did Burger King LLC have more right to use the name, they were also able to limit and restrict the smaller restaurant despite registering federally at a later date.

Federal Registration Requirements

The other requirement for trademark federal registration is the trademark must be distinctive. The trademark cannot be generic or descriptive. For instances, you cannot register “tissue” as a trademark, that is a generic term for toilet tissue. You cannot register “interior decorating” for an interior decorating services because its descriptive of the services. That is why it is always best that if an owner is seeking registration they create or use a trademark that is arbitrary or unique as possible. When the trademark is unique it avoids consumer confusion, which leads to trademark registration. Unique trademarks are usually words with no meaning, and arbitrary trademarks are words that in no way relates to the product. Examples of unique trademarks are: Kodak, Exxon, and Google. Examples of arbitrary marks are Apple (for computers), Lotus (for software), and Camel (for cigarettes).

There are many websites that allow individuals to produce their legal documents via automatic field population. Many prefer this method because one can avoid obtaining legal representation. To obtain legal trademark documents through these websites, the customer pays a fee and fills in information to specific questions. The document is automatically drafted and sent to the USPTO.

Although this method is convenient, it does not guarantee proper filing of your trademark application as an attorney could. The website only provides documentation it doesn’t provide a means to resolve any issues post filing, without paying more money to hire an attorney. When an application for trademark is received by the USPTO an Trademark Examiner reviews the document searching for errors that could prevent processing. Once errors are marked the Trademark Examiner sends a notice to the filing party, making them aware of the errors and allow them six months to correct the errors.

When these documents are filed via a website the site does not later resolve any errors with the application as an attorney would. Due to the process of trademark registration being possibly tedious and requires timely filing to gain protection, it is better for a licensed legal professional to file the documents on behalf of small business owners to help combat future issues with the filing which are inevitable.

If you want to learn how you can protect your brand join us for a live webinar on December 18 with Rosezena J. Pierce, Esq. Register here

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