Trademark Law

Prior to using any trademark, perform due diligence to ensure the business does not infringe on the marks of others. Such due diligence might include:

• Online searches
• Review of relevant trade and industry journals
• Employing a law firm or trademark search firm or service
• Employing a trademark watch service or purchase trademark infringement protection software to ensure against others infringing on your trademarks
• Making sure that you own your own logo. Many businesses hire others to create logos to identify the businesses goods and services. Logos that are graphic designs are generally protected by copyright law. Unless the person who created it is you or your employee, you may not actually own the design. Where appropriate, a written work for hire agreement signed by everyone who will participate in the creation of a logo must be signed before any work begins. Otherwise, you may need to obtain a copyright assignment after the fact transferring their copyright in the design to you, including the right to use it as your trademark.

Trademarks and service marks permit consumers to identify the source of goods or services. The purpose of trademark law is to ensure that consumers are able to rely on marks in exercising their purchasing preferences by prohibiting competitors from using marks in a way that confuses consumers. Ensuring that trademarks accurately identify the source of goods or services benefits businesses by helping them create and protect business good will. Use of trademarks and service marks are subject to common law (unfair trade practices), state statutory law, and federal law (the Lanham Act).

To receive recognition and protection as a mark, a business must ensure that the mark (1) is distinctive and not generic, (2) is used in the ordinary course of trade—not merely in a nominal or token manner, and (3) is used in close and regular connection with the relevant goods or services.

Trademark law categorizes marks based on their level of distinctiveness. At the top of the hierarchy are arbitrary and fanciful marks. Businesses create arbitrary marks by applying common words in an unrelated context—such as Blue Diamond® for peanuts or Green Leaf® for insurance. They invent fanciful marks entirely, as seen with Exxon® and Xerox®. Suggestive marks—like Best Buy®, Greyhound®, Coppertone® (for suntan oil), and Roach Motel® (for insect traps)—imply a quality or feature of the product and are also considered inherently distinctive.

Lower on the scale are descriptive marks, such as The Real Yellow Pages®, and surname marks, like Edward Jones® or Charles Schwab®. Because these marks describe the product or use common names, courts do not consider them inherently distinctive. Businesses can only protect these marks if they establish that the public associates them with a specific source—a concept known as secondary meaning.

Secondary meaning is attained when, due to exposure to the mark in the market place, the relevant consuming public views the mark not in its primary, descriptive or surname sense, but as an indication of the source of the product or service. Generic marks (Carolina Bagel Bakery & Cafe) are incapable of becoming distinctive and cannot have ownership rights to them, nor can marks that are scandalous or immoral, or deceptive.

Trademark users have certain protections under common law principles of unfair trade practices. Under common law, the first user of a mark is the owner of it. However, if a second party later uses a confusingly similar mark in a remote geographic area in good faith (with no notice of the earlier use of the other mark that is ongoing in the U.S.) the second party will have superior rights in the mark in that remote geographical area (known as a ‘”good faith defense”).

The area of a party’s actual use of a mark is comprised not just of the area in which the user has sold goods or services through use of the mark. It may also include those areas in which there have been no sales but the mark has a presence by virtue of advertising or general reputation. Common Law Symbols. May use “TM” and “SM” to put world on notice of use of a non-federally registered mark.

On the state-level, registration is generally done with the applicable Secretary of State. Protection is generally limited to the State. Not all Secretary of State offices perform any due diligence to determine whether use of the official name of the business is infringing on the trademark or service mark of others. Nor do applicable Secretary of State Offices generally perform a search against federal or other state registered marks upon when processing applications. Due diligence is generally left to the applicant to perform.

Businesses can often satisfy the interstate commerce requirement through out-of-state sales, transactions involving customers engaged in interstate travel, the use of shipping services with hubs outside South Carolina, or by accepting credit card payments.

Registration on the Principle Register of the United States Patent and Trade Mark Office (USPTO). Registration on the Principle Register of the USPTO provides: (1) a right to assistance from U.S. Customs in preventing infringing goods from entering the country; (2) presumptions of mark ownership and validity and, after five years of registration, preclusion of certain challenges or defenses to the
mark; and (3) rights in the mark in a greater geographical area than would be possible under common law.

Be sure to make all periodic filings with the USPTO in the U.S. or elsewhere, as appropriate, or employ an appropriately equipped law firm to do so.

A person who has already satisfied the threshold requirements of distinctiveness, use in trade, close and regular connection with the good or service, and used in interstate commerce may file an application with the USPTO. The USPTO will examine the applications and publish it for opposition. If there is no successful opposition, the USPTO will register the mark and issue a certificate of registration.

Alternatively, a person may file an application alleging a bona fide intention to use the mark in trade and interstate commerce. The USPTO will make an initial examination of the applications and publish it for opposition. If there is no successful opposition, the applicant will have six months, renewable up to two-and-a-half years, to make the necessary use in trade and commerce and file a statement of use with the USPTO. After the statement of use is filed, the mark can be registered and a certificate of registration can be issued.

Marks registered on the federal level are indicated by the ® symbol.

Federal law allows businesses to protect trade dress—such as a product’s shape, a distinctive and colorful background design on the product or its packaging, or even the unique design and décor of a retail chain or franchise—as a mark, if the trade dress creates a separate commercial impression and can identify or distinguish the product in the marketplace.

Under the Trademark Dilution Act of 1995, which became law in 1996, the owner of a “famous” trademark can now stop someone from using its trademark if it tends to weaken, blur or tarnish the famous mark. Unlike traditional trademark law, which still applies, with trademark dilution you do not have to show any likelihood of confusion over the source or sponsorship of the goods or services.
Trademark Protection Recommendations

Communicate with an attorney experienced in trademark matters to determine whether any critically important trademarks and service marks used by your business are candidates for trademark protection. These might include:

• The name of the business.
• Names of specific goods and services.
• Domain names used by the company.
• Sales slogans.
• Trade dress of products, packaging, or storefronts, etc.