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INTELLECTUAL PROPERTY RIGHTS

March 24, 2014

U.S. LAWS ON TRADEMARKS AND TRADE NAMES

 

Trademarks, service marks, and trade names are valuable business assets, which can be licensed or conveyed together with the good will, or “going concern value”, of the business. Trademark is defined in the Federal Trademark Act, Lanham Act (Sec. 45, 15 USCA Sec. 1127) as “...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”. For example: “Winston” cigarettes, “IBM” computers, “Sanka” coffee, or “Xerox” copiers.

 

A service mark is “a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others”. For example: “American Express”, “Merrill Lynch”, “Allstate”, or “Sargent & Lundy, Engineers”. Legal requirements for protecting trademarks and service marks are identical. Trademarks identify goods and service marks identify services. Both trademarks and service marks indicate a sole source, which can be anonymous, and represent uniform quality of such goods or services.

 

“Trade names” and “commercial names” include all names identifying businesses, vocations, occupations, and organizations engaged in trade or commerce. For example: “Boeing”, “Ogilvy & Mathers”, “20th Century Fox”, or “General Motors”. A “Certification Mark” on a product or in connection with a service certifies that origin, material, quality, or the characteristics of such goods or services, or that work or labor was performed by a certain organization, as meeting the standards set up by the certifier. For example: “PC Editors Choice” is the certification mark of PC Magazine. A “Collective Mark” is a trademark or service mark used by the members of a cooperative, an association and other collective group for identification of membership in a collective organization without identifying goods or services. Brand name is synonymous with a trademark.

 

The product shape may serve as a trademark, if it acquires secondary meaning. This means that the mark identifies the product source in the eyes of the public, such as Coca-Cola or Mogen David bottle shapes. The product shape may be subject to a design patent if it has features being new and non-obvious, to ordinary designer.

 

The strongest trademarks are the trademarks, which are arbitrary or fanciful as they do not describe or suggest the product or its characteristics, such as “Lexis”, “Kodak”, “Xerox”, “Parliament” (for cigarettes), or “Huffy” (for bikes). These trademarks can be easily registered on the Principal Register in the U.S. Patent and Trademark Office (“USPTO”) in Washington, D.C. Trademarks, which are descriptive or suggestive of product characteristics, can be registered only if one can prove that they acquired secondary meaning. That is they bring about consumer’s mental association of a product and its single source, such as “Extended Stay” for motels. Such proof is made using direct evidence in the form of surveys or buyer’s testimony. The proof can be made also through circumstantial evidence, such as advertising, length of use, exclusivity of sale, or sales volume.

 

There are many trademarks, which became generic. That means they fell into the public domain and trademark owners lost the marks’ value. For example, the trademarks “cellophane”, “elevator”, “aspirin” and “thermos” became commonly used product descriptions. That may happen to any trademark, which becomes too popular. That is why companies spend a lot of money on education of the public by accenting the words following the trademark. For example, “Xerox” is followed by a word “copiers” or “document company”, “Sanka” is followed by the words “brand of decaffeinated coffee”, “Scotch” is followed by” brand of an adhesive tape”.

 

Trademarks are independent intangible assets, which can generate their own stream of revenue through:

 

• Outright sales;

• Licensing or franchising;

• Lawsuit settlements arising from infringement of property rights in such assets by other     parties; and

• Training of personnel, operating and maintaining business equipment, or running the         transferee’s or licensee’s business.

 

A registered trademark search may be conducted on-line using commercial and the USPTO databases. Registration with the USPTO is not required but it gives constructive notice to the public, provides evidence of the registrant's ownership, serves as a basis for foreign registrations, gives the right to litigate and seek infringement damages in federal courts, facilitates research and dispute avoidance or resolution, and is used to stop the importation of infringing foreign goods. Infringement on the federally registered trademark may result in closing business or severe financial penalties.

 

Items protectable by Trademarks/Service Marks include:

 

1. Product Trade Dress

2. Brand, Trade and Internet Domain Names

3. Sub-Brand Names

4. Company Logo

5. Slogans, Mottos and Monikers

6. Corporate Name

7. Packaging Design

8. Title to a series (not a single work) of literary works.

9. Individual’s name (e.g. “Armani” for clothes, “Apple” for computers).

10. Geographic terms, such as “Malibu” or “Seville” for cars.

11. Letters (e.g. MS-DOS for software; BMW for cars;) and Numbers (e.g. “737” for      ‘Boeing’ airplanes).

12. Background designs making a separate commercial impression on ordinary buyers,     such as a colonel Sanders’ image for the “KFC” food chain.

13. Radio and television program titles and character names.

14. Product shape, if it acquires secondary meaning, i.e. the mark identifies the product     source in the eyes of the public (e.g. “Coca-Cola” or “Mogen David” bottle shapes). A       product shape may also be protected by a design patent, if it has features being new         and non-obvious to an ordinary designer.

 

A product’s intellectual property may be protected via combined legal means. For example, a toy vehicle may be legally shielded by a design patent (protecting the vehicle’s overall appearance), a utility patent (covering the drivetrain structure and operation), copyright law (since a toy is a “work of art”), and trademark law protecting a label identifying the seller.

 

Trademark’s life duration is unlimited if marks are used and respective registration in each country kept current. Nonuse results in a mark’s abandonment and loss of enforcement rights.

 

© 2014, Parad Law Offices, P.C.

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