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Trademarks: An Important Part of a Business Identity By Robert Ziogas of GFD&G

Posted by on Feb 8th, 2011 and filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

What’s in a name?  A lot when it comes to businesses, products or services.

Just as there are laws protecting individuals from identity theft and punishing those who steal another’s identity, there are laws that protect one’s trade name, trademark or service mark and punish those who wrongfully misappropriate such property from others.

A “trade name” is a name used to designate a business of a particular person or company.  Ownership in a “trade name” is derived through its use, so as to allow the public to identify a particular person’s business with that person.  Thus, in choosing a trade name, it is important to check public records to ensure that someone else is not using the prospective trade name in a similar business.  Adopting a confusingly similar name to that of another may result in the inability to continue to use that name.  Such conflicts can be costly and can have devastating effects on branding and marketing efforts.  Furthermore, it may result in injunctive relief against further use, as well as potential damages to the person whose name may be infringed.

A “trade mark” is a distinctive mark, logo or emblem which someone physically affixes to his goods so that the origin of those goods can be identified in the market.  Sometimes people misunderstand the way that rights to trademarks are obtained, believing that registration of a mark is required in order to become its owner.  However, like a trade name, the ownership of a trademark is obtained only through use.  Only after a mark is used will ownership rights vest in the user and it can only be registered after actual use in the marketplace.  (There are methods to file “intent to use” trademark applications, but actual registration will not be allowed until the mark is in actual use.)

Registration with the United States Patent and Trademark Office (as well as with the Commonwealth of Virginia or other states where the mark may be used) creates a presumption of ownership in the mark and provides the owner with certain rights and protections against use of the mark by others.  Generally, descriptive words describing the characteristics of a product cannot serve as a trademark.  After all, everyone should have the right to use descriptive words to describe his or her product.  Rather, fanciful words (that bear no relation to the nature or description of the product) provide the greatest trademark protection.  Some examples of such trademarks are “Apple®” for computer-related products and “Exxon®” for petroleum-related products.

The above principles also pertain to “service marks.”  Service marks apply to the promotion and sale of services, rather than goods.

Trade names, trademarks and service marks can become valuable assets of one’s business.  It is important to conduct proper searches to ensure that others do not have prior ownership interests in contemplated names or marks so as to avoid potential infringement claims, not to mention the expense and disruption of having to change a name or mark after attempting to use it in one’s business.

As with most matters pertaining to the initial set-up of a business endeavor, it is prudent to review the checklist with a legal expert.  This small investment can save a lot of time and money in the long run.  After securing and using an available trademark or service mark, an owner must be diligent in properly registering and timely renewing the registrations.  Furthermore, the owner should be diligent in giving “cease and desist” notices or taking other actions against infringers so that his ownership rights are not diluted or lost through his failure to protect them.

Robert Ziogas is a shareholder with Glenn, Feldmann, Darby & Goodlatte in Roanoke, Virginia.  He is an experienced litigator with a focus on business, construction and creditor’s rights law.  Visit www.gfdg.com to learn more.

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