You’ve got a great business idea, you’ve done your research and due diligence and can’t wait to enter the great American business ring. But what do you call this new company or product or service? This query is often the first hurdle a new or growing business faces, and with good reason.
Choosing a strong trademark can help avoid many problems in the future. The usual suspects may not be the best: surnames, geographical indicators, and generic or descriptive names all help readily convey what it is you are selling, but they also carry the downside of leaving you exposed to copycats. What business owners and entrepreneurs ought to strive for is a name that will imprint itself in the minds of your customers and grow to become synonymous with your business.
Today, when you think Apple or Amazon, the personal computer giant and global online marketplace immediately come to mind. Thirty years ago, a fruit and South American rain forest would have been on the tips of your tongues. What trademark owners should strive for is creating an association between their name and their wares that mimics the near universal recall that these two Fortune 50 giants have built.
Avoiding Likelihood of Confusion
The first consideration is ensuring that no one else has prior rights to the name you have chosen.
It is crucial to determine whether another entity is already using a trademark that is the same or similar to your proposed trademark in connection with related products or services. This is commonly referred to as the "likelihood of confusion" issue. Likelihood of confusion is the basic test that is used to determine trademark infringement. Under this test, the question to be answered is whether the average purchaser of a product or service would be confused as to the source of the product or service. It is important to note that the "likelihood of confusion" of two trademarks is examined with the specific product or service in mind. Thus it is possible to have identical trademarks associated with wholly unrelated goods or services, such as DOMINO’S for pizza and DOMINO for sugar.
Choosing a Distinctive Mark
A second important issue is the sustainability and enforceability of your proposed trademark. Trademarks can generally be classified in four categories: generic, descriptive, suggestive, and arbitrary/fanciful. Typically, the strength of a trademark is related to the category in which it falls. For example, arbitrary or fanciful trademarks are very strong, while a trademark that is generic receives no protection.
As its name suggests, a generic name is the common name associated with a type of product or service and, therefore, must be available for all proprietors in that sector. For instance, no one can claim exclusive trademark rights to the mark INTERNET for online business.
Descriptive marks literally describe the product or service – or a quality, characteristic or ingredient of the offering. Descriptive trademarks are sometimes enticing because they immediately convey to your prospective consumer what you are selling – but it is for that very reason that it often cannot serve as a strong trademark. If your competitors are also describing their offerigs in a similar fashion, then the consumer is trained to see the name as more of an explanation than a term that identifies who is doing the selling. Examples of marks found to be descriptive are HONEYBAKED for hams, TRIM for manicuring implements, and ICE for beer.
A suggestive mark is similar to a descriptive mark, but it does not literally or immediately describe the product or service. Suggestive marks require some thought, imagination, and/or perception to determine the goods or services. A popular example of a suggestive mark is GREYHOUND for bus services, because it carries the connotation of speedy travel without describing it. A suggestive mark is the minimum standard for which a new trademark owner should strive.
Finally, arbitrary and fanciful marks are very strong and typically receive the greatest protection. Arbitrary marks are common words that are applied in an unexpected manner, such as APPLE for computers, CAMEL for cigarettes, or AMAZON for online retail services. On the other hand, fanciful marks are newly-invented contributions to the English lexicon – terms that have no dictionary meaning such as KODAK for film, LEXUS for automobiles, or XEROX for copiers.
Can you get the domain? Often overlooked when choosing a name is whether you can get the domain name for that trademark. While there are ways to challenge another’s use of your trademark in their domain, if you choose a new trademark for which the corresponding domain is unavailable, you are creating an avoidable obstacle at the outset of your venture.
Another consideration is whether the trademark you choose is registrable. While trademark rights commence from the day you begin using the name in commerce, it will not be registrable if someone else is using it or if it is generic or (in many instances) descriptive. While federal registration introduces an added cost to the construction of your new business, the benefits are far-reaching and comforting. For instance, federal registration puts everyone else in the nation on constructive notice that you are the first user and trademark owner. For another, it opens up the possibility of recouping attorneys’ fees in the event of litigation. Finally, it can reserve your ability to expand into new territories of the United States and force another user of the same or similar trademark to stop even if they began using it in that territory before you did.
Before expending large amounts of time and money on advertising and marketing for a new product or service, a business should consider the points set out above and consult with a trademark attorney to ensure that they’re chosen mark is, indeed, a strong one.