United States: Tips On Acquisition And Enforcement Of Trademark Rights On A Tight Budget


Creating, registering and protecting trademark rights can be a costly undertaking, whether on behalf of a large corporation's international portfolio or the single brand of a small business. In a weak economy constrained by drastically reduced budgets, trademark owners may be tempted to indiscriminately discard important intellectual property they might maintain in better times. However, setting anchor and dropping sails may not be the best approach to weathering the turbulent seas of an economic downturn. Trademark owners should consider ways in which costs may be reduced by working more efficiently with outside counsel, improving the predictability of costs, and investing in the long-term protection of intellectual property assets necessary to add real value to their undertakings. A number of suggestions follow.

1. Ask a Trademark Attorney to Educate You or Your Marketing Department to Help Avoid Common Pitfalls

Becoming educated about the basic aspects of trademark law is useful when planning for trademark protection on a tight budget. Learning, for example, how to select distinctive marks, how to properly describe the goods or services offered under a particular mark, how to avoid conflicts with prior rights and how to properly use a mark are among the considerations that factor into reducing costs. An experienced trademark attorney can provide in-person training or repurpose existing educational materials to assist in-house counsel in avoiding common pitfalls and their corresponding costs.

Potential educational topics include the following:

Selection of Distinctive Marks

A trademark attorney can render advice on how to select marks that are sufficiently distinctive to minimize the costs of conducting searches and arguing against refusals where useful and beneficial results are unlikely.

A mark may be fanciful, arbitrary, suggestive, deceptive, descriptive or generic. While fanciful, arbitrary, or suggestive marks are generally registrable, marks that are generic, descriptive, or deceptive are generally not entitled to registration. A trademark attorney can point out the differences among these types of marks and provide techniques for selecting fanciful, arbitrary, or suggestive marks. The attorney can also take you through using the internet to determine the relative distinctive strength of a proposed mark.

Understanding that, for example, ROPA (the Spanish word for clothing) is generic or THREADZ (the phonetic equivalent of threads) is merely descriptive for clothing, a well-trained marketing department may suggest marks that are more likely to be acceptable. As a result, outside searches can be limited to more-distinctive marks, for which there are generally fewer conflicting registrations or applications, and reduce the need to submit arguments to overcome descriptiveness refusals.

Proper Description and Classification of Goods and Services

A good trademark attorney should offer advice on how to properly describe and classify the goods and services to be offered under a proposed mark. Learning how to properly describe the goods/services and knowing their proper classes can streamline the registration process and minimize unnecessary correspondence with your attorney and the Trademark Office, and even reduce the cost of filing a trademark application.

Awareness of the differences between trademark practice in the U.S. and abroad is also helpful. The U.S. Patent and Trademark Office ("USPTO") follows a fairly stringent approach when reviewing the description of goods and services, whereas many Trademark Offices in other countries are more willing to accept broader descriptions. For example, most European Trademark Offices would likely find an application for "clothing and footwear" in Class 25 acceptable, whereas the USPTO would surely object to such a description as indefinite and request further clarification. The USPTO would also likely object to an application for "clothing, including, shirts (tops)" because of certain formal rules. Instead, a proper description in the U.S. might be "clothing, namely, t-shirts, shirts, caps, pants; and shoes, namely, leather boots, running shoes." A seasoned trademark attorney would be aware of these nuances in practice and thus avoid the expenses involved in filing amendments to the description of goods and services.

A trademark attorney should also provide guidance on the effective use of on-line tools to determine the appropriate class of goods or services. Knowing how to properly classify one's goods and services can help avoid formal objections by the Trademark Office. A proactive effort to file applications that conform to local practice can go a long way toward minimizing the costs of prosecution.

Avoidance of Refusals and Conflicts with Prior Registrations

Before committing to applying for trademark protection, it is important to check the availability of the proposed mark by conducting appropriate searches. A trademark attorney can help save some of the costs in conducting outside searches by performing in-house searches to identify registrations for identical or highly similar marks, and attempting to determine whether these marks may be in use. However, since in-house searches usually do not reflect whether an identical mark is the subject of state registrations or use that may materially affect the trademark owner's ability to register and use the proposed mark, further investigation may still be required. A trademark attorney can evaluate and expand upon the search results as needed, and advise on whether to conduct a more costly, comprehensive search. The attorney can also advise on the comparative risk among alternative marks for a fraction of the cost of individual, piecemeal searches.

In certain foreign jurisdictions where trademark applications are not examined for prior, conflicting marks (so-called relative grounds), searches, although often costly, can be important in evaluating the risk that the mark may be opposed and possibly avoid unnecessary expenses related to the filing and prosecution of unavailable marks. The search results may also suggest a solution to a potential conflict based on, for example, (i) determining which goods/services are fundamentally of interest; (ii) comparing the respective goods/services; and (iii) limiting the goods/services in order to avoid creating a conflict with the previously registered marks. A trademark attorney should advise you about cost-effective ways to conduct these searches.

Proper Use of the Mark

Use of a mark is important to obtain and maintain rights both at common law and in support of a U.S. federal trademark registration. Improper use of the mark may result in a denial of rights. A trademark attorney can provide guidance on the proper use of a trademark so that it complies with the fundamental requirement that it function as a source identifier.

In order to obtain and maintain a federal registration in the U.S., in most cases the mark must be used in connection with all of the goods/services identified in the application/registration. Non-compliance with this requirement may provide a basis for cancellation. Although the USPTO only requires a single specimen in order to show use of a mark for each class of goods and services, a registration may be vulnerable if the owner fails to adhere to its sworn statement that it uses the mark on all of the goods or services in the class. Foreign companies and law firms should be particularly concerned with this issue since, in the U.S., the use of a mark for different or partially different goods/services could amount to "fraudulent use" and render the registration vulnerable to cancellation for the whole class of goods/services, despite evidence that the mark is in use with respect to some of those goods/services.

Moreover, a registration based on foreign trademark rights may be cancelled if the owner cannot provide documentary evidence, typically during discovery, that it had a bona fide intent to use the mark on the goods and services in U.S. commerce at the time of filing.

Document Retention and Destruction

A trademark attorney can also provide helpful guidance regarding which types of documents should be retained and when others should be routinely destroyed.

Certain materials generated early in the process of adopting a mark may support efforts to enforce trademark rights, while others may be vital to defending against the invalidation of such rights. For example, advertising and sales figures may be needed for purposes of determining damages that may have resulted from an infringement. Documentation supporting an applicant's bona fide intent to use a mark at the time of filing, such as search reports and budget proposals, may be necessary to defend against efforts by third parties to invalidate U.S. trademark registrations. Other materials, such as signed consent agreements, website archives, and copyright assignment and license agreements for design marks, can also be helpful.

While it can be beneficial to retain some materials, over-retention of hardcopies and electronic documents can create a substantial burden not only because of storage needs, but also because of the time that would be required to review and produce these materials in response to a discovery request. An attorney can provide guidance proactively in designing and implementing a document retention and destruction policy to help the company manage which materials should be routinely destroyed and when such destruction should occur.

2. Ask a Trademark Attorney to Review and Analyze Your Work

Where trademark owners can pursue trademark applications on their own, it is always advisable, at a minimum, to have a trademark attorney review and analyze their work, including the results of any self-conducted searches or drafts of applications or arguments to the Trademark Office. For example, some searches may be inherently inconclusive, and evaluating the extent to which any third party rights may be applicable requires particular knowledge and skill. More specifically, in the U.S., searches of the Trademark Office database alone are not a reliable indication of the availability of a mark because they do not reveal whether third parties may own state registrations or rights based on common law usage.

There are many technical issues that should only be addressed by a seasoned trademark attorney involving vulnerabilities of potential registrations. Applicants acting on their own may not be sufficiently familiar with trademark law, and as a result, may give up and allow their application to be abandoned as soon as a prior mark is cited. By researching the particulars and investigating the use of the cited mark, your attorney may be able to determine means to inexpensively overcome a refusal by the Examining Attorney. For these reasons, it is often advisable to have a trademark attorney review an office action issued against an application and analyze alternative ways to overcome a refusal before allowing an application to become abandoned.

Finally, the extensive amount of docketing inherent in trademark prosecution and maintenance may also pose a substantial burden on those not equipped with specialized systems for this purpose.

3. File or Amend Applications to be based on Use and/or on a Foreign Mark

U.S. applications filed before the applicant has actually used the mark in U.S. commerce may be costly. The additional costs arise when the applicant needs to submit proof of use or request extensions of time to do so since these actions involve government fees, plus the attorney's service charges. In some cases, these expenses can be avoided or reduced either by claiming use earlier in the application process, or, for foreign applicants, by relying solely upon a corresponding "home" registration. It may be advantageous for foreign applicants to initially file their U.S. applications based on both a corresponding home application and secondarily on their bona fide intent to use the mark in the U.S., the latter of which can be deleted once the foreign application has issued to registration.

4. Require Predictability of Fees

Expenses associated with the prosecution, enforcement and defense of a trademark are difficult to predict. Companies struggling to manage their budget for legal work in a weak economy can require that their IP attorneys work within their budget by requesting estimates in advance for each service and/or by negotiating flat fees or other fee arrangements. Estimates may be particularly beneficial because attorneys may feel compelled to come within the estimate even if it might mean billing less time than it actually took to complete a particular task.

5. Respond Promptly and Maintain a Docketing System

Responding to an attorney's inquiries in a timely fashion helps minimize costs. Many law firms charge for routine communications. When instructions are not received until the last moment, several inefficiencies may arise. The attorney may take longer to handle the matter because it may no longer be as fresh in his mind. Also, as a result of the time constraints, the client's instructions may not have the benefit of the attorney's careful review and the options arising therefrom. By dealing early with your attorney's requests, you may be able to save fees as well as some time in obtaining trademark protection.

In addition, the use of a docketing system, no matter how simple or complex, may enable clients to align their thinking and their schedule with those of their attorney. In doing so, attorney-client communications may be more concise. The burden on companies in managing a large portfolio may be reduced by making use of specialized software for management of intellectual property matters.

6. Obtain Online Access to Your Trademark Portfolio

A company with substantial intellectual property assets can save time and money through online access to its trademark portfolio. A secure, on-line interface allowing an instant, top-down view of the portfolio, an updated status for each trademark application or registration, and the corresponding goods/services reduces the need to rely on the attorney for such information before making business decisions.

7. Trim Your Trademark Portfolio

Many companies maintain extensive trademark portfolios including a number of marks that may never be needed in a particular jurisdiction or may no longer be in use. The costs inherent in keeping such applications and registrations active may far outweigh the value of the marks. As a result, it may be beneficial to periodically reevaluate the overall portfolio in order to save the costs of further prosecution and renewal.

8. Be Proactive

The enforcement of trademark rights can be costly, particularly if not addressed at an early stage. Companies that are proactive in attempting to prevent others from applying for similar marks and in cutting off counterfeit operations quickly can preserve a substantial amount of their legal budget. These proactive efforts may include the use of watch services, customs recordals, the education and mobilization of consumers to identify and prevent infringements, participation in provider-based notification services such as eBay's VeRO program, and the announcement through appropriate media of actions taken.

Watch services help reduce expenses by promptly identifying potential conflicts on a worldwide basis. A watch service should be customizable to the needs of the subscriber and can also be vetted by your attorney for recommendations as to appropriate action, if any. Defensive actions may save a great deal of economic resources when timely addressed by legitimate trademark holders. By learning of a potential conflict early on, a company has the possibility of investigating the business more in depth to form a better opinion as to whether it is worthwhile to litigate.

9. Take Advantage of Centralized Control Over an Extensive International Network

Identifying and engaging competent trademark counsel in non-U.S. jurisdictions can be another source of costly inefficiencies. Many firms may not be responsive or may fail to offer competitive rates. Moreover, it may be overwhelming to maintain centralized control over multiple firms. A firm with an extensive network of local counsel is in a better position to deal with these issues and provide a more consistent top-down approach to the trademark portfolio. An attorney familiar with foreign trademark matters can also take a more critical view of the advice provided by local counsel.

10. Limit the Use of Self-Service

Although self-service websites may superficially appear to provide a less expensive alternative for individuals and small businesses to apply for intellectual property rights, their use may result in substantially greater costs in the long run. While such services lower the barriers to entry resulting from a limited budget by automating some of the more basic aspects of applying and initially avoiding the services of an attorney, it may be short-sighted to use them.

In contrast to a self-service website, an experienced trademark attorney can help an applicant avoid several costly and common pitfalls. For example, at the most basic level, a trademark attorney can evaluate (1) whether a proposed mark would likely be considered generic or descriptive; (2) whether a proposed identification of goods or services may be acceptable as written; or (3) whether a specimen showing use of the mark will likely be accepted. These basic issues are often ignored by self-service websites. However, failure to address these issues will inevitably lead to objections by the Trademark Office, resulting in unnecessary cost. Overcoming these objections may prove difficult without legal advice, removing the perceived economic benefits of applying through a self-service site. An experienced trademark attorney can maximize the chances for successful results by addressing issues both (1) before the application is filed; and (2) when complex issues arise thereafter.

In the long run, an applicant, by using self-service websites, may be required to spend at least as much time and money as it would have spent had it secured competent legal advice from the beginning.


There are many ways to reduce the costs of obtaining, maintaining, enforcing and defending trademark rights. The value of trademarks transcends any given period of economic stress. They should not be neglected for shortsighted cost savings, but rather they should be more efficiently protected.

Allan S. Pilson is a partner, and Matthew Asbell and Sebastian Lovera are associates at the firm of Ladas & Parry LLP in New York, NY.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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