Naming Your Product or Service

Naming your company, product or service is an important task. Good branding dictates that names convey who you are and what you provide. "A rose by any other name is still a rose," but consumers remember and recognize you by your name. In addition to branding considerations, there are a host of legal considerations to picking a name. As you may invest considerable time and money in the name you choose, assessment of the legal risks and requirements is important.

The Purpose of Trademark Law

The trademark act, or "Lanham Act," 18 USC Sec. 1051 etc., is meant to allow consumers to correctly identify the sources of goods or services.

For example, when a consumer buys a pair of Nike shoes, she want to know that Nike made them and they are of the quality and standards that Nike, as a company, offers consumers. Trademark law allows Nike to stop other companies who might make cheap shoes, and copy the Nike logo on, them from doing so. Allowing a third party to use the Nike mark on its products would (a) allow it to easily sell products by taking advantage of the money which Nike has spent on advertising, brand development, warranties and customer service; (b) allow it to offer its products at lower cost than Nike due to lower overhead; and (c) injure Nike because the consumer will associate bad performance of the products with Nike or will try to return products never sold by Nike to Nike and will be angered if Nike refuses to take such products back.

When considering if there is "trademark infringement," the main question a court considers is whether the average consumer would be confused as to the source of the good or service.

What is a Trademark?

A trademark is a word, phrase, symbol or design; or combination of words, phrases, symbols or designs; that identifies and distinguishes the source of goods or services. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product.

Normally, a trademark appears on the product or on its packaging, while a service mark appears on advertising for the services. A ™ on a product indicates unregistered (common law) trademark rights and an ® indicates registered trademark rights. It is illegal to place an ® on a mark that has not been registered.

Trade or service marks are granted in product and service classes. For example, there could be two registered marks for the word "Tide" – Tide detergent in a class for products and Tide seafood restaurant in a class for food service.

When Do You Get a Trademark and What's Required to Get a Trademark?

You may apply for registration of a trade or service mark after you use a mark on a product on in promotion of a service performed "in commerce". In commerce, simplified, mean for advertising and/or sale to customers. You may also register your company's intention to use a mark prior to its use and the complete application with a sample of its use in commerce.

You are not required to obtain national registration of a trade or service mark. Trademark rights arise upon use in commerce. However, national registration expands and protects your trademark rights, giving your company a legal presumption of first use of the mark in association with particular goods or services.

When you formally apply for national registration of a mark, you must submit an application, drawing of the mark if graphic, and sample of the mark as you have actually used it to identify your company's product or service. Obtaining full registration of a mark usually takes several years as the United States Patent and Trademark Office (USPTO) is understaffed and overburdened.

Trademark Searches

Since trade and service mark rights are based on use in commerce and priority of use, not every company registers its marks. Trademark rights can be asserted under state and federal law, and registration is not required to bring a lawsuit.

Before investing money in registration, advertising and branding of the mark, domain names and other promotional costs, a business may want to ensure that there are not others with usage rights greater to its own. To reduce the likelihood of another party asserting prior use in the mark, which may give them greater rights, in the future, your business may want to order a full trademark search.

You can conduct a cursory search by looking at the USPTO database of marks and registrations through their website at www.uspto.gov. However, since registration of marks is not mandatory, absence of a mark from the database does not ensure that there are not others with priority of rights to use the mark. Additionally, the USPTO database is usually about six months behind showing application and registration status.

A full trademark search will include phone books, newspapers, the Internet, state trade name registrations, the USPTO and other sources. The typical price is $500 to $800 for a full trademark search. You can find cheaper searches, but those are often not as comprehensive as the ones by professional trademark search companies, such as Thomson & Thomson (www.thomson–thomson.com). The results of a full search are several hundred pages of analyses of similar words and/or graphic representations of the mark from the United States including many that may not be registered but may have rights. You can also obtain worldwide trademark searches through professional trademark search companies.

A trademark search is not a requirement of registration. However, if you choose to apply without one, you are taking two risks (1) the USPTO may reject your mark because of marks you are unaware of; and (2) at any time, after application, opposition and/or registration, a party with earlier usage rights may try to assert a right to use the mark which is greater than yours and to stop your use.

You should note that the trademark application requires you or your attorney to swear that you are unaware of any similar mark that might cause confusion with your mark. This means that if you perform a search and obtain results showing conflicting marks, you would not be able to honestly submit the sworn oath on the application.

What Do You Have When You Have a Trademark?

The purpose of having a trade or service mark is to ensure consumers correctly identify the source of your goods or services. Having a trademark allows you to prevent others from using the same or similar mark, with similar products or services in the United States.

For example, when we buy a Nike shoes, we want to know that Nike made them. We assume that they have the quality and guarantees of Nike products. Trademark law allows Nike to stop other companies from using Nike's trademarks. Permitting another company to use the Nike mark on its products, would (a) allow it to easily sell products by taking advantage of the money which Nike has spent on advertising, brand development, warranties and customer service – its "goodwill"; (b) allow it to offer its products at lower cost than Nike because it has not invested funds in establishing goodwill like Nike has; and (c) injure Nike because consumers would associate low quality products and services created by the impostor company with Nike.

If another company uses your mark to sell similar products or services, you can bring a trademark infringement claim against such company to stop its use. You can bring a lawsuit for trademark infringement even if your mark is not registered. When deciding trademark infringement cases, a court considers which company used the mark first, where geographically the mark was used and the degree of consumer confusion with regard to the source of the mark.

Trademark rights are indefinite as long as your business uses the mark, controls others' use of the mark through licensing and policing of unauthorized use, and makes periodic trademark filings if the mark is registered.

Note about domain names: Having trademark rights is also important with regard to current law and domain names. Presently, the USPTO will not register a domain name that does not merit trade or service mark rights under traditional analysis. The name by itself is considered merely an address. Thus, it is very important to use your domain name as a trade or service mark in order to ensure retention of the domain name. Trademark owners may be granted ownership of their trademarks through arbitration or court if a party without trademark or other rights is using their mark –– in other words, trademark holders can take domain names that utilize their marks from registrants.

Naming Your Product or Service

Now that you understand trademark law, you have a better idea how to choose a name for your product or service depending on your business goals.

1. Begin by considering how easily you want to be able to register your mark.
   
   
2. 1. Arbitrary and Fanciful Marks: the marks most easily registered are those that are arbitrary or fanciful. These marks are those that have no obvious association with a particular good or service and/or are made up. Yahoo! is an example of a fanciful mark. Blue Diamond Almonds is an example of an arbitrary mark.
      
      
   2. Suggestive Marks: marks that are next most easily registered are suggestive. These marks require the consumer to give some thought to understand the association. Greyhound Buses is an example. A consumer must think about the characteristics of a greyhound –– fast and sleek–– and associate them with the bus service.
      
      
   3. Descriptive Marks: marks which describe aproduct or service, describe a product or service through use of a surname (Smith's plumbing), or describe a product or service through use of a geographical word (Napa Valley Chardonnay), may be difficult to register. Whether a mark is truly "descriptive," as opposed to "suggestive," is often subjective and depends on the USPTO examining attorney and how well your attorney can argue your application. The idea behind denial of registration is that applicants which are merely describing productsis that an application should not be able to monopolize use of the words necessary for use by the general public or others to simply describe a service. The USPTO will grant the mark if a company can prove that consumers identify a product or service with a source through a descriptive mark over a statutory period of time.
      
      
3. After you decide how easy you want your application process to be, begin by making a preliminary list of five or six names that you like and by writing a short, but broad, description of your product or service. Give this information to your intellectual property attorney and ask him or her to do a preliminary search of the names in relation to your product or service and discuss the results with you. The attorney will usually narrow your list to one or two name likely to be the best legally. You can then decide whether or not to do a full search (see Trademark Searches) or to risk the application process without one. Either way, you should put a ™ on your marks during the application process to give notice of your marks to others.
   
   

Conclusion

Naming a product or service is a complex and thoughtful decision. In fact, smart naming requires more thought than you will give to naming a child. However, with your attorney's help, you can lower your risks and choose wisely.