United States: Trademark Basics And Trademark Use

Last Updated: September 30 2019
Article by Mark E. Miller and Scott W. Pink

What is a Trademark?

Legally, under United States law, a trademark (or service mark) is defined as any word, name, symbol, or device, or any combination thereof, which identifies and distinguishes the goods (or services) provided in conjunction with the mark from the goods (or services) of others. A mark also indicates the source of goods (or services), even if the source is unknown to consumers.

Grammatically, a mark is a proper adjective (for example, Rolex) which modifies the generic product name (a noun) (for example, wristwatch). A mark is not a noun—it is not the generic name of the product or of the service. A mark must not be used in a plural or possessive form, which would indicate improper use as a noun. A proper adjective, like a proper noun, is entitled to an initial capital letter. For example, "Rolex brand wristwatch" is proper trademark use, while "a Rolex" or "Rolexes" used without a generic term are not. Similarly, a mark is not a verb. For example, asking someone to "Instagram" a picture is improper use, while asking someone "to edit or post a photo through the INSTAGRAM app" is proper trademark use.

Functionally, a mark identifies a particular brand of a product or service and tells a consumer something about a product or service. For example, the mark Rolex used in conjunction with wristwatches tells a consumer about the expected quality of the product and the source of the product. A mark also allows consumers to quickly differentiate similar competing products. For example, a consumer facing the ice cream selections below would be able to immediately select the product of the source and quality that the consumer desires:

Categories of Trademarks and Service Marks

Fanciful (Coined) and Arbitrary Marks. Fanciful marks are "made up;" examples include KODAK, XEROX, and EXXON. An arbitrary mark is created when a common word is applied to a product or service unrelated to the meaning of the word; examples include NIKE (for sneakers), TIDE (for detergent), and PINCH (for scotch). Fanciful and arbitrary marks are the strongest marks.

Suggestive Marks. Suggestive marks act in the manner for which they are named—they suggest some characteristic of the associated goods or services, but require a consumer to use imagination to draw a conclusion about that characteristic. Examples of suggestive marks include SUNKIST for oranges and orange juice, PLAX for plaque removing dental rinse, WORD for word processing software, and COPPERTONE for suntan oil. Suggestive marks are strong marks, although typically not as strong as fanciful and arbitrary marks.

Descriptive Marks. A mark is descriptive if it describes any characteristic of the associated goods or services. Generally, descriptive marks cannot be protected unless the owner or user of the mark can prove that the mark has acquired distinctiveness—meaning that consumers associate the mark with the owner (as the source of the goods or services). Examples of descriptive marks that have acquired distinctiveness include MR. PEANUT peanuts, PARK-N-FLY airport parking, and COKE ZERO soft drinks. Descriptive marks are the weakest marks and may be difficult to protect.

Generic Terms. Terms that describe a category of product or service rather than a certain brand of product or service are generic terms. Generic terms can never acquire trademark significance and cannot be protected or infringed. Examples of generic terms are "microprocessor," "ice cream," and "shoes." Marks that have lost trademark significance, no longer serving as an indicator of source or quality, become generic terms. Aspirin, escalator, cellophane, and videotape are former trademarks that lost trademark significance and became generic terms.

Obtaining Rights in a Mark

Rights in a trademark or a service mark are obtained by using the mark in commerce. Using a trademark "in commerce" means selling or transporting goods that have the trademark affixed to the goods or the packaging for the goods. Using a service mark "in commerce" means advertising or promoting services using the service mark, provided that the services have actually been rendered. Rights arising from use of a mark are known as common law trademark rights and are enforceable under both federal and state law. A federal trademark registration confirms trademark rights and provides favorable legal presumptions and additional legal recourse for enforcing those rights. A federal registration is not, however, a prerequisite to ownership of protectable and enforceable trademark rights.

The Value of Trademark Rights

In summary, the value of obtaining rights in a trademark or service mark lies in two areas: (a) the right to use a trademark to identify the source of goods or services (i.e. developing brand recognition and goodwill); and (b) the right to prevent others from using the same or a similar trademark in conjunction with the same or similar goods or services (i.e. protecting brand recognition and goodwill by eliminating confusion). The ultimate value of a mark is to enhance sales of the goods or services advertised, marketed, or sold with the mark through brand recognition and the expected quality of the good or service.

Is a Domain Name a Trademark?

A domain name is part of a Uniform Resource Locator (URL), which is the address of a site or document on the Internet. In general, a domain name is composed of a second-level domain, a "dot," and a top-level domain (TLD). The wording to the left of the "dot" is the second-level domain, and the wording to the right of the "dot" is the TLD. For example, in the domain name www.xyz.com, the term "xyz" is the second-level domain and the term "com" is the TLD.

Generic TLDs are designated for use by the public. Unrestricted generic TLDs, available to any individual or entity, include COM, NET, and ORG. Restricted generic TLDs include EDU for degree-granting colleges/universities, GOV for federal government entities, INT for international organizations, and MIL for U.S. military organizations.

Traditionally, neither the beginning of the URL (http://www.) nor the TLD had any sourceindicating significance. Those designations are devices that every Internet site provider must use as part of its URL. In 2011, however, the Internet Corporation for Assigned Names and Numbers (ICANN) launched a program to introduce new TLDs. The introduction of new TLDs made it possible for a TLD to have source-indicating significance. For example, if the wording after the dot is already used as a trademark or service mark the appearance of such marks as a TLD may not negate the consumer perception of them as source indicators. Nevertheless, it is the secondlevel domain that must be primarily examined when protecting or enforcing a trademark or service mark.

A mark composed of a domain name may be registered as a trademark or service mark only if it functions as a source identifier. The mark must be perceived by potential purchasers as indicating source and not merely as an informational indication of the domain name address used to access a website. A term that only identifies the applicant's domain name or the location on the Internet where the applicant's website appears, and does not separately identify applicant's products or services, does not function as a trademark or service mark. Instances of a domain name used only as an Internet address include a domain name used in close proximity to language referring to the domain name as an address or a domain name displayed merely as part of the information on how to contact the applicant. For example, using the URL www.xyz.com in an advertisement that states "visit us on the web at www.xyz.com," does not constitute use of the URL as a trademark or service mark. Similarly, listing the URL www.xyz.com on a business card below information such as a telephone and fax number would not constitute use as a trademark or service mark.

What is Trade Dress?

Trade dress refers to the non-functional physical detail and design of a product or its packaging or to the décor or atmosphere of a business. Trade dress must serve as a source identifier and distinguish a product or service from third-party products or services. Trade dress refers to the total image and overall appearance of a product or its packaging, including features such as size, shape, color, texture, or graphics, or to the décor, signage, menu, and general "atmosphere" of a restaurant or store. When assessing trade dress or considering whether a third-party product design, packaging, or décor infringes a trade dress, the elements of the trade dress (i.e. the features of its appearance) must be viewed together, rather than separately.

Trade dress rights only arise if a product design or packaging or the business décor is (1) nonfunctional and (2) distinctive (i.e. serves as a source identifier) rather than generic. Although product packaging can be inherently distinctive (and capable of trade dress protection), the design of a product can never be inherently distinctive. A product design (or non-inherently distinctive product packaging) is only protectable if the owner can prove that the design (or packaging) has acquired distinctiveness (i.e. serves as the source of the goods).

As with trademarks and service marks, trade dress rights arise from use and are known as common law trade dress rights. Those rights are enforceable under both federal and state law. It is also possible, as with a trademark or service mark, to obtain a federal registration confirming trade dress rights. The process for registering a trade dress is slightly more rigorous than for a trademark because—in addition to other requirements—the applicant is required to demonstrate that the trade dress is nonfunctional and is either inherently distinctive or has acquired distinctiveness. Examples of registered trade dress include Maker's Mark's red dripping wax seal on its whisky bottles, the Coca-Cola soft drink bottle, and Chipotle restaurants' neo-industrial feel established through the use of unpainted galvanized or stainless steel.

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