Considering the Implications & Benefits of Trademarks and Trademark Registration When Forming Your Business - January 2014
In forming a new business (whether an LLC, Corporation, etc.), often the focus lies on whether the name of the business passes muster with the State Corporation Commission (“SCC”). However, registering a business with the SCC merely gives one the right to do business in that particular state under that particular name. If you are interested in using a logo for your business or branding the goods or services that your business provides, you may want to establish a trademark or service mark that is associated with your business’s goods or services.
A trademark is a word, phrase, symbol, design, or a combination thereof that identifies and distinguishes your goods from similar or identical goods that are offered by others.  A service mark is the same as a trademark, except it identifies the source of a service as opposed to a good.  The trademark or service mark may be the same as the name of your business, or it may be different. However, registering a business name with the SCC does not qualify as trademark use, nor does it mean that you have acquired trademark rights in the name you chose. Furthermore, even if you successfully register to do business under a particular name with the SCC, this could not be used as a defense if another party later tries to prevent your use of the business name if they believe a likelihood of confusion exists with their trademark.
Thus, as a practical matter, you should consider the possibility that someone else may claim rights to a trademark that is similar to the name of the business you intend to form. Before forming your business, it is worthwhile endeavor to first conduct a thorough search for other businesses, brands, or trademarks that may be confusingly similar to the name you intend to use for your business. If there are none, you should consider whether you would like to establish your own trademark, possibly using the name of your business or a different mark, to brand your goods or services.
You can establish rights in a mark based simply on using the mark in commerce. This is sometimes referred to as a “common law” trademark or service mark. Often you will see a “TM” (trademark) or “SM” (service mark) behind a brand or logo that is not federally registered or for which federal registration is pending. Your common law trademark would be protected in the area that you use the trademark. Some states offer trademark registration; however, state registration typically provides rights only within the borders of the state.
Once you’ve established a mark to use with your business, you have the option to federally register your trademark with the United States Patent and Trademark Office (“USPTO”), which provides more protection than a common law or state-registered trademark. Federally registered marks are often designated by the ® symbol. Federal registration comes with several benefits, including (1) a legal presumption that you own the mark, and you have exclusive rights to use the mark nationwide on or in connection with the goods/services listed in the registration; (2) the ability to bring an action for infringement concerning the mark in federal court; (3) statutory protection, including the ability to recover statutory damages and attorney's fees for infringement;  (4) the ability to record the registration with the U.S. Customs and Boarder Protection Service to prevent importation of infringing foreign goods; (5) The use of the us registration as a basis to obtain registration in foreign countries; (6) listing in the USPTO databases and the right to use the federal registration symbol ®.
If you decide to establish a trademark to use with your business, and further decide to federally register such mark, keep in mind that not every mark is registrable with the USPTO. The USPTO will not register a mark if there is a likelihood of confusion with another mark that is already registered or pending registration. Furthermore, the USPTO will not register a mark that is merely descriptive or generic, unless the mark has, over time, acquired a certain level of distinctiveness such that consumers associate the mark with your goods or services.
For more detailed information on trademarks, service marks, and federal registration, including the registration process, please see Protecting Your Trademark: Enhancing Your Rights Through Federal Registration or you may contact Kristen R. Jurjevich at Pender & Coward about registering a trademark for you or your business.
Ownership of a trademark or service mark is not limited to business entities. An individual may also establish and/or register a mark with the United States Patent and Trademark Office.
15 U.S.C. § 1127.
See id. When “trademarks” are discussed herein, it should be understood that the same legal implications and/or benefits apply to service marks, unless stated otherwise.
See 15 U.S.C. § 1117.
This article is available on the USPTO’s website at http://www.uspto.gov/trademarks/basics/BasicFacts.pdf.