Protecting intellectual property and trademark registration is a major concern for entrepreneurs. Competition is stiff in nearly any market, and it takes only a few smart moves for slick competitors to steal a good idea and establish it as their own. Trademarks are one way for entrepreneurs to distinguish their products and establish a loyal customer base. Understanding how trademarks work is essential for entrepreneurs planning to create distinctive brands and differentiate their products.
The term “trademark” is often thrown around without any real understanding of what it means. Before you can develop, use, or protect a trademark, you must understand exactly what it is. A trademark can be a word, phrase, symbol, or other device to identify a specific product.
Services are represented by a service mark rather than a trademark. However, service marks are treated almost identically to trademarks. The only notable difference between the two is that trademarks apply to products, and service marks apply to services. You may even find that some people use the term “trademark” to refer to both types of marks. However, if you’re offering services, keep in mind that there is a different legal term that will apply to your mark, although this guide will still help you develop and protect it.
How Trademarks Work
Trademarks are designed to distinguish your goods from a competitor’s. Consider the overwhelmingly recognizable Louis Vuitton trademark. Other manufacturers can produce purses featuring similar materials, colors, and designs, but buyers know that they’re getting a Louis Vuitton purse because of the trademark stamped on the bag.
If you and your competitor both sell similar wheels of cheese, but your wheel of cheese has a recognizable stamp on it that lets your customer know it’s from your high-quality dairy, then that stamp is your trademark. Trademarks can appear in other places too, but perhaps their most important application is directly on the product in question.
Choosing a Good Trademark
The best trademarks are creative and not directly descriptive of the product in question. Good examples include “Kodak” or “Nike.” It's worthwhile to note that generic phrases like “disposable camera” or “tennis shoe” can’t be used as trademarks. Even if you invent a new phrase to describe your product, if it’s something that merely describes or identifies the class of product you provide, it likely won’t work as a trademark.
Identifying Competing Trademarks
The biggest challenge with developing and using trademarks is finding an unused mark. If a company begins using a trademark without doing adequate research beforehand, it could face serious legal repercussions. Conducting a thorough search of the United States Patent & Trademark Office database is the first step. Clearing a mark through the registered database does not always promise free use of the mark, though. A company can establish a trademark simply through regular and continuous use. A company that begins using the same mark, or one that’s similar, could still face a lawsuit.
Trademark lawyers can provide a more detailed analysis of the landscape. A lawyer also can provide documentation of his or her services, which will help a company facing a lawsuit to establish that they used the mark in good faith with a reasonable belief that it was not currently in use.
You don’t necessarily have to register a trademark to safely use it if you’ve done adequate research to determine that the mark is not already in use. Part of establishing a trademark lies in using it regularly and building a reputation based on the trademark among consumers. A registered mark that’s never used isn’t nearly as valuable to a business as a trademark that isn’t registered, but is used so reliably that it is widely recognized.
Registering a Trademark
Companies can register trademarks in a number of different ways. A very small local company with no intentions of expanding may find that a State Trademark Registration is adequate for its purposes. For most businesses, however, a United States Trademark Registration is likely a better choice. Filing a trademark application may seem like a complicated proposition to the uninitiated, but it's easier than it may seem. Once you’ve established that the trademark is free of any competition, it’s a matter of filling out the appropriate forms and monitoring the application until it is legally registered.
Registering a trademark is time-consuming, but only because it takes time for the application to pass through the system. It typically takes four to six months for applications to get approval. After this, other companies that believe your trademark infringes upon their own have 30 days to contest your trademark. After the 30 days have passed, you can consider yourself the proud new owner of a registered trademark. Even if a trademark is contested, you may still get to keep it if you can establish that you are not, in fact, infringing on another company’s mark.
A trademark can be a word, phrase, symbol, or other device to identify a specific product. It distinguishes a product or service from those of competitors. For example, if a particular stamp on a wheel of cheese indicates that it's from a specific dairy, then that stamp is the trademark of the dairy.
Both trademarks and service marks are used to distinguish goods and services. The main difference lies in their usage: trademarks are used to represent products, while service marks are used to represent services. However, these terms are often used interchangeably. Read more in our guide to trademarks vs service marks.
The best trademarks are creative and not directly descriptive of the product or service. A phrase that merely describes or identifies the class of product or service you provide is unlikely to work as a trademark. Renowned trademarks like “Kodak” or “Nike” are good examples.
While registering a trademark offers a level of protection, its real value lies in regular usage and consumer recognition. You don’t necessarily have to register a trademark if you’ve done adequate research to ensure it’s not already in use. However, registering your trademark makes it easier to legally protect it against infringement.