Trademarks and Service Marks

A trademark or service mark consists of two parts. In reverse order, they are:

• The noun that specifies what kind of product or service you're talking about. Examples: automobile; health plan.

• The word or words that function as an adjective to identify a product or service as being different from all others. Examples: Buick automobile; Saab automobile; Blue Shield health plan; Kaiser health plan.

Think of these as the first and last names of products and services. The last name identifies the group; the first name uniquely specifies a member of that group. As such, the trademark is used as a proper adjective and is always capitalized.

Trademark law is the main tool that businesses use to protect the symbols and words that identify the origin of services and products. The basic premise is that the first user of a distinctive (that is, creative or unusual) name or symbol gets the exclusive right to use it. If you're the first user, you can make that right easier to enforce if you register the name or symbol with the federal trademark agency. The principal purpose of registration is to protect rights that already existed because you used the mark first. But registration can also confer other rights. For example, if you're using an unregistered mark without knowing that someone else used it first, federal registration can give you priority in areas outside the first user's market territory. The twin goals of trademark law are:

• to prevent businesses from getting a free ride off the creativity of others in naming and distinguishing services and products, and

• to prevent customers from being confused by names that are misleadingly similar.

From a legal protection standpoint, the best trademarks are coined words, such as Kodak or Yuban, or arbitrary words such as Arrow for shirts or Camel for cigarettes, which have nothing to do with the product. Nearly as good are suggestive trademarks-ones that hint at some aspect of the product. For example, Talon suggests the gripping power of a zipper.

Trademarks that consist of creative, unusual or otherwise memorable terms are called "distinctive" and "strong." If you're the first to use such a name or symbol, you can legally stop others from using it in most situations.

Trademarks that consist of ordinary terms are called "weak," and competitors are free to use them. Merely descriptive words (such as Easy Clean for a cleanser) generally are not legally protectable. These weak marks can, however, become strong if they acquire a secondary meaning through prolonged usage. If that happens, they may be federally registered and may also be protected under the law of unfair competition if there's a local conflict with a similar mark.

You can't acquire any rights in the name of the product itself; this is called a generic name. This means you can't adopt Bicycle or Refrigerator as your trademark for your version

The law doesn't allow a business to claim the exclusive right to use descriptive words and generic names because competitors also need to describe their products. If you could tie up key words for your own exclusive use, your competitors would be unduly restricted in describing their goods. Also, descriptive terms aren't particularly memorable and don't further the purpose of trademarks and service marks.

Strong and Weak Trademarks

As noted earlier, with very few exceptions, only strong trademarks or service marks have the full protection of federal and state trademark laws. Remember, too, that trademark laws don't automatically protect a business name (the name of your company); to be considered a mark, a business name must be used to identify a product or service in the marketplace.

A trademark is considered weak when others can use it (or something similar) on products or services that don't compete directly with yours. Most ordinary trademarks are weak. Examples: Liquor Barn, Cuts Deluxe, Charlie's Auto Parts, 10-Minute Lube.

A trademark is considered legally strong when others can?t use it or anything similar on related goods or services. There are two kinds of strong trademarks: ones that contain distinctive terms and ones that contain ordinary terms that have acquired distinctiveness through use.

1. Distinctive Terms
   Distinctive trademarks are memorable, evocative, unique or somehow surprising-for example, 7-Up, Lycra or Cherokee apparel. The words themselves have little or no descriptive function; they serve to set the product or service off from others.

   So if you're naming a service or product and want a strong mark, try for a name that is either unusual or used in an unusual way. A judge is likely to treat a distinctive name as a trademark or service mark and protect it from use by others-unless someone else has used a similar trademark on the same type of product or service first.

   EXAMPLE: "Buick" distinguishes a line of cars from others, and the name means nothing apart from its trademark use. It?s a distinctive name. Conversely, "Dependable Dry Cleaners" merely tells you something about the business; it doesn't help you distinguish it from rivals who might also advertise their services as reliable or efficient. So the name would probably not qualify for trademark or service mark protection unless it had been in use for a long time and developed a sizable following - that is, a secondary meaning.

2. Ordinary Words
   Generic terms can't be protected by trademark law; original and distinctive words can be protected. But what about other words used to identify products and services - ordinary words that are neither generic nor distinctive? This category covers place names (Downtown Barbers), surnames (Harris Sales), words that describe the product or service (Slim-Fast Diet Food) and words of praise (Tip-Top Pet Shop). Ordinary words receive limited legal protection as trademarks. It's more difficult to keep others from using them or something similar.

   Even a weak trademark can acquire limited protection under unfair competition laws. For example, an ordinary name (a weak trademark) can be protected from someone else using the name in a confusing way. The law of unfair competition is generally based on state law (statutes and judge-made law) that supplements federal and state trademark laws. Owners of weak and unregistered names can get some relief from a rival's use of the identical name on the identical product or service in a competing market.

   Weak trademarks can become strong ones through long use and extensive public familiarity with the mark. A trademark that starts out being ordinary or otherwise weak (like Dependable Cleaners) can sometimes, over time and through use, become identified in the public's mind with a specific product or service. When that happens, it can be transformed into a strong trademark.

   EXAMPLE: Chap Stick brand of lip balm was originally a weak trademark. It simply described the condition the product was designed to cure: chapped lips. But it became strong as advertising and word of mouth helped the public develop a clear association between the name and a specific product. Over time, the name developed distinctiveness based on familiarity rather than any quality inherent in the name.

Excerpted from the "Legal Guide for Starting and Running a Small Business" by Fred S. Steingold
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