TRADEMARKS ARE INTELLECTUAL PROPERTY

"Trademark" is generically used to describe certain types of Intellectual Property which include trademarks, service marks, trade dress, certification marks, and collective marks. These types of intellectual property help the consumer recognize and identify a particular product or service and assure him or her that it has come from the same source and has the same quality as he or she experienced previously. Each type of mark is governed by certain legal requisites and may be assigned, sold or licensed. A trade name usually is just the name of a business but it may be used as a trademark when it is associated with specific goods or services and, when used as a mark, it is protected by trademark law. The distinction must be emphasized: a trademark is inseparable from the goods it identifies, while a trade name identifies the company which uses it.

WHAT IS A TRADEMARK? - A trademark includes any word, name, symbol or device, or any combination, adopted and used by a manufacturer or merchant to identify goods and distinguish them from the goods of others. Examples of trademarks Include coined words with no meaning at all (Kodak); an ordinary word which has no meaning in connection with the product to which it is attached (Arrow); a coined word suggesting what the product is (Kleenex); a foreign word (Lux); initials (STP); numerals (No.5); or a pictorial mark (Elsie the cow) or a symbol (Nike’s "swoosh").

A trademark can be other than a brand name or symbol. Elements of a product or a package (such as the product shape, container shape, or package design) can be registered as a trademark so long as the trademarked (protected) features are non-functional. That is, the protected elements cannot be related to the purpose, action, performance, the ease or economy of processing, handling, or use of the goods. For example, the Coca-Cola hourglass shaped bottle is a registered trademark that identifies the source of the soft drink. The bottle shape is non-functional with regard to the product. Here are some examples of different types of trademarks:

WORD MARKS - They are the most familiar kind of mark, including LIFE-BUOY, for soap, MUSTANG for automobiles, MICROSOFT for software, etc.

DESIGN MARKS - These include a wide range of pictorial symbols, such as the flying horse of Mobil, the Texaco star, the Prudential Rock of Gibraltar, the Mr. Peanut design, McDonald's golden arch design, and Calvin Klein’s stylized CK.

SLOGANS - Striking collections of words or phrases. Examples would be Intel’s "Intel Inside," McDonald’s "My McDonald’s," Maxwell House's "Good to the Last Drop," Budweiser's "Where There's Life There's Bud", 7-Up’s "The Uncola," and "I'd Walk a Mile for a Camel."

INITIALS AND NUMBERS - So long as they are not merely grade designations, these also can function as valid trademarks. Well known examples are "G.E.," "3M," "NBC," and "3-in-ONE".

CONTAINERS, CONFIGURATION OF GOODS, BUILDING DESIGNS - All of these, if sufficiently unique, and essentially nonfunctional, have been accorded trademark protection. The famous Coca-Cola and Haig & Haig Pinch Scotch are examples.

LABELS - These can be the subject matter of copyright protection; in some cases federal registration can be obtained if the label is judged to be capable of distinguishing the goods.

WHAT IS A SERVICE MARK? - A service mark is any word, name, symbol or device or a combination used to identify the services of a person or company and to distinguish them from the services of others. Examples include all those listed for trademarks as well as slogans and distinctive features of advertising used in commerce ("The Four Seasons" for a restaurant service).

WHAT IS A CERTIFICATION MARK? - A certification mark is a word or design used to identify goods or services of persons other than the owner of the mark to certify characteristics of the goods or services such as origin, material, mode of manufacture, quality or accuracy or that the goods were produced or services performed by members of a union or organization ("UL" for appliances meeting standards of Underwriters Laboratories, Inc. or _ to indicate that a product meets the kosher standards of a particular testing organization.

WHAT IS A COLLECTIVE MARK? - The term "collective mark" means a trademark or service mark used by the members of a cooperative, an association, or other collective group or organization, and includes marks used to indicate membership in a union, an association, or other organization. Examples of collective marks are FLORIDA ORANGE JUICE and PHI BETA KAPPA fraternity (collective membership).

HOW ARE TRADEMARK RIGHTS OBTAINED? - Trademark rights in the U.S. are acquired only by actual use or intended use, with actual use occurring within the statutory period, of the mark on or in connection with goods or by displaying the mark in connection with the sale or advertising of services in interstate commerce. Trademark rights continue indefinitely so long as the mark is not abandoned, is properly used and renewed. A trademark need not be registered to be protected. Rights will be protected without registration under common law. Once a mark is actually used, the rights so established in the user can be enhanced and even expanded through state and federal registration. This is in contrast to the systems of most foreign countries, where formal registration is the first requirement and use without registration is made at great peril. If goods bearing the trademark are shipped in interstate or foreign commerce, or if services under the mark either are subject to federal regulation or have been rendered in more than one state, the owner is entitled to apply to register the mark in the U.S. Patent and Trademark Office. MEYER & ASSOCIATES, LLC can register your trademarks, service marks and trademarks for reasonable fees. Failure to federally register can "territorially restrict" your rights. This may preclude you from going nationwide with a trademarked product. After registration, one of the following trademark registration notices may be used. "Registered U.S. Patent and Trademark Office", "Reg. U.S. Pat. & Tm. Off." or ®. It is important to note that use of a trademark registration notice before the mark actually has been registered not only is inappropriate but also may prevent the owner from obtaining relief against an infringer. Until registration is granted, you are only permitted to identify your trademark with the notation "TM" or "Trademark."

Federal trademark registration is obtained for appropriate goods and services by filing an application for registration. Federal Registration (on the Principal Register) gives constructive notice throughout the United States of the use of a mark from the date of registration, and to some extent, even earlier (if it is done correctly). Federal registration is prima facie evidence of a registrant's exclusive right  to use a registered mark. After five years, the registration maybe deemed virtually conclusive evidence of the registrant's exclusive right to use the mark. Federal registration has substantial advantages: (a) it is constructive notice of the registrant's nationwide claim of ownership; (b) it is evidence of the registrant's ownership rights; © it gives federal courts jurisdiction to hear infringement and related claims of unfair competition; (d) it can be used as a basis for registration in some foreign countries; and (e) it can be recorded with the U.S. Customs Service to prevent importation of foreign goods bearing infringing marks.

International trademark protection is obtained on a country-by-country basis. In many countries rights are acquired by registration rather than use, although use may be required to maintain a registration.

DO NOT RELY ON INCORPORATION TO PROTECT YOUR TRADEMARK.

Incorporation within a state or registration as a foreign corporation affords a corporation some limited rights in its name; however, those rights are subject to being displaced by superior trademark rights of others, as well as by superior rights of prior incorporation or foreign corporation registrations, and the senior corporation has the right to object to the junior corporation's usage. In addition to the initial registration or name establishments, a major source of trademark rights is the assignment of these rights and the goodwill represented thereby. Such assignments can be recorded at the federal and state levels to give constructive notice and prevent later bona fide purchasers of the same rights from asserting better title.

WHO OWNS A TRADEMARK? - The first user of a mark (or intended user with subsequent actual use within the statutory period) is considered its owner. In the corporate structure, the user is considered to be the corporation. Unlike some countries, in the United States, the first to register will not prevail over the first user. The owner of a trademark may license another to use the mark, dictating the nature and quality of the licensee's goods or services bearing the mark. Similarly, the trademark owner may assign his mark to another party.

GUIDELINES FOR SELECTING NEW TRADEMARKS

Although the primary function of a trademark is to indicate origin, trademarks also represent the quality of the goods bearing the mark and serve to create and maintain demand for the product. Obviously, a good trademark must be original, gripping, powerful and memorable. But beyond these creative aspects the following guidelines should be followed:

1. Trademarks that are easiest to protect are "coined" words, having no meaning in any language. The classic is KODAK. The problem with such a mark is that there is no immediate relationship between the product and the trademark and consumers may find difficulty in associating the two.

2. Trademarks should not be:

a. words which, when applied to the goods, are merely descriptive of the goods, or of their prime function (i.e.,"photocopies" could not be registered).

b. words which, when applied to the goods, are geographically descriptive (i.e., Southern Fried Chicken) or indicate regional origin.

c. words which are primarily surnames. (In some instances long and unaltered use will give certain un-registerable terms trademark status such as Kentucky Fried Chicken or Ford.)

3. Under certain circumstances a trademark may be suggestive (but not descriptive) ofa desired or intended nature, function or end result that accrues to the benefit of the user of the product or service (i.e., ULTRA BRITE to indicate bright white teeth).

PROTECTING YOUR COMPANY'S TRADEMARKS

Failure of each of your employees and your advertising agency to take proper care can result in your company's losing exclusive rights to its marks. Whether the communication is a letter, memo, data sheet, sales report, technical bulletin, press release invoice or advertising brochure, any mention of a company product by its trademark must comply with the guidelines set out below. Look at a Frito-Lay product package sometime. They do an excellent job of protecting their marks. Correct usage is a must throughout your company. Any employee who misuses a trademark unwittingly contributes to its demise. For example, all of the following words were once valuable U.S. trademarks: kleenex, aspirin, cellophane, escalator, linoleum, shredded wheat and zipper. Because their owners did not properly use and protect them, valuable rights were lost.

BASIC REQUISITES FOR PROPER USE OF YOUR COMPANY'S TRADEMARKS - A trademark is protectable when widely, frequently and properly used. A mark should be used whenever possible, both within and without the company, to designate your company's services. It is especially preferable that a mark be frequently identified as the sole property of your company so that the ultimate source of the marked goods is definitely and unalterably established. MEYER & ASSOCIATES, LLC can help you set standards for use of your marks. The following is only a general guideline. Trademarks are unique identifiers and should be used in accordance with the following rules.

1. ALWAYS MAKE YOUR TRADEMARKS APPEAR DISTINCTIVE - The basic rule is that the trademark be easily distinguishable from the surrounding text. At the very least, the mark should be capitalized. If the initial capital does not make the trademark distinctive in the context, place the trademark in quotes.

2. USE THE APPROPRIATE NOTICE TO IDENTIFY YOUR TRADEMARKS -The symbol ® stands for "registered trademark" and should be used only with trademarks that have been registered with the U.S. Patent and Trademark Office. Do not claim registration unless you are sure the mark is registered for the product it is being used to describe. Use "TM" to identify marks which have not been registered by the federal government.

3. USE YOUR TRADEMARKS ONLY AS PROPER ADJECTIVES - A trademark must modify the descriptive or generic term.

4. BE SURE "OWNERSHIP" OF YOUR TRADEMARK IS INDICATED OR READILY APPARENT - The purpose of a trademark is to uniquely designate origin or source. Ownership of your company's marks should always be given if not readily apparent.

REQUISITES FOR PROPER USE OF YOUR COMPANY'S DESIGN MARKS The value of your company's design, as well as other visual logos, is tremendous. The visual logo adds a further dimension to the identification scheme of the trademark. There are special rules that govern proper use of design trademarks which are in addition to the previous rules for proper use of Trademarks generally.

1. The registered design mark is a freestanding complete unit on a solid background. It is not to be superimposed over any background or foreground.

2. The mark should always be used in its entirety as registered.

3. The colors and layouts should always be the same. Constant change dilutes the effect of your mark.

IMPROPER USE OF YOUR COMPANY'S TRADEMARKS

1. NEVER use your company's name ahead of a trademark. This implies incorrectly that someone else makes your product using the same trademark.

2. NEVER combine your trademarks either with marks of your own or those of others.

3. NEVER use your trademarks as nouns, verbs, plurals or possessives.

4. NEVER change or modify your trademarks. Don't alter the spelling of a trademark, or coin a new word from it. Absolutely avoid any variations, embellishments or abbreviations. Do not compound a trademark by hyphenation with another term.

5. NEVER use your trademark to describe a product not sold by your company under the trademark.

MISUSE AND INFRINGEMENT OF YOUR COMPANY'S TRADEMARKS - All your employees should be alert to any variations in use of your company's trademarks from those uses outlined above. In order to protect one's trademark rights, it is important to challenge another's use of an identical or similar mark on the same or similar product. Knowingly permitting another to use one's mark on the same or similar goods results in the abandonment of trademark rights. Third party violations should be brought to the attention of your trademark attorney. Whenever possible, samples of the material in question, address and name of offender (company), and all other pertinent data should be forwarded to your trademark attorney.

The most valuable property a business possesses is its good name, which symbolizes its goodwill and reputation. A trade name may be used as a trademark when it is associated with specific goods or services and, as a mark, is protected by trademark law. The distinction must be emphasized: a trademark is inseparable from the goods it identifies, while a trade name represents the firm which uses it.

A corporate name is that identification which legally denotes the company structure, i.e., "corporation", "company", "association", "partnership", etc. Thus, the corporate name is the legal name of the business entity and should be distinguished from the trade name which is the business identification of the entity. The corporate name is acquired through state registration with the Secretary of State in the state of incorporation. The corporate name is also registered with the Secretary of State in each state where the business is licensed to do business. MEYER & ASSOCIATES, LLC can help you protect your corporate name as well as your trade name.

MORE TECHNICAL INFORMATION ON TRADEMARKS

DEFINITION

Under federal law a trademark is " . . . any word, name, symbol or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others." 15 U.S.C. 1127.Most states have statutes providing for trademark registration and define a trademark similarly to federal law.

REGISTRATION

Under federal law the applicant must have used the mark on goods or services prior to registration. However, an applicant does not have to satisfy the actual use requirement to register a mark so long as they have a bona fide intent to use the mark on goods or services. Most state statutes still require some showing of use. A federal registration gives the trademark owner certain benefits under federal law including the jurisdiction of federal courts to resolve trademark infringement litigations and a serving as a predicate for foreign registrations.

ASSIGNMENT

Federal law provides for registration of trademarks and also provides for their transfer. Title 15, U.S. Code, Section 1060 provides as follows:

"A registered mark or a mark for which application to register has been filed shall be assignable with the goodwill of the business in which the mark is used, or with that part of the goodwill of the business connected with the use of and symbolized by the mark, and in any such assignment it shall not be necessary to include the goodwill of the business connected with the use of and symbolized by any other mark used in the business or by the name or style under which the business is conducted. Assignment shall be by instruments in writing duly executed. Acknowledgment shall be prima facie evidence of execution. An assignment shall be void as against any subsequent purchaser for a valuable consideration without notice, unless it is recorded in the Patent and Trademark Office within three months after the date thereof or prior to such subsequent purchase. A separate record of assignments submitted for recording hereunder shall be maintained in the Patent and Trademark Office."

It is important to note that no special provision is made under federal law for the granting or perfecting of a lien on a trademark. The security document as filed is denominated as an assignment and is recorded under the same provision as transfer of ownership. Indeed when the original recorded assignment is returned from the Patent and trademark Office it lists the lender as the assignee. In order to register an assignment under federal law the form of assignment must state that the trademark or application is being assigned together with the goodwill of the business symbolized thereby. This is because the policy of trademark law is that a trademark is a symbol of the goodwill of the business. The Patent and Trademark Office may not accept for filing an assignment without these words, and if they do it is not clear whether such an assignment would be effective under federal law. However, merely including such words may not be effective.

A trademark constitutes a general intangible under the UCC. General intangible is defined in Section 9-106 of the UCC as 'any personal property (including things in action) other than goods, accounts, chattel paper, documents, instruments, and money. The Official UCC Comments to Section 9-106 give examples of general intangibles and include trademarks and patents, except to the extent that they may be excluded by Section 9-104(a) of the UCC. Since federal law does not provide for the granting of security interests in trademarks, the UCC is apparently not preempted by federal law under Section 9-104(a) and since federal law does not provide for national registration of security interests filing of a UCC financing statement is sufficient under Section 9-302 of the UCC.

It is strongly recommended that federal law (and applicable state trademark law if there are state registrations) be complied with. The reasons for this are (1) to achieve a priority over subsequent purchasers or assignors of the trademark and (2) to facilitate a transfer of the trademark in the event collateral is to be realized upon. There are may issues in perfecting a security interest in intellectual property. MEYER & ASSOCIATES, LLC can help you determine proper procedure in a particular case.

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