Julie Tennyson & Donovan Gibbs
This article was developed by the Kentucky Bar Association (KBA) Intellectual Property (IP) Section. To learn more about the KBA IP Section, visit https://www.kybar.org/page/intellectualproperty.
As an Intellectual Property attorney, a couple of times a year, I receive a call because someone has received a Cease-and-Desist letter concerning a trademark violation. The most common problem is the potential client has named their company the same as, or confusingly similar to, a federally registered trademark or service mark. A common example is a store or a restaurant with increasing internet traffic to their site or social media, drawing the attention of the true trademark owner. The response I almost always get from the potential client is that an attorney or accountant told them they could get the name, “So what is the problem?”
The problem is that registering a business with the Kentucky Secretary of State is not a search of registered Federal trademarks or service marks. It is not even a search of registered State trademarks. The Kentucky Secretary of State will let you register an almost identical corporate name, but the USPTO, United States Patent and Trademark Office, will not approve the application of an almost identical mark. If you operate a business, sell products, or provide services under a federally registered trademark (and you are not the owner), you are at risk of a trademark infringement lawsuit.
Sometimes, a cease-and-desist situation can be resolved amicably if the client simply changes their name. At this point, unfortunately, the client has likely incurred significant costs for marketing materials (i.e. signs, printed materials, and websites.) The cost of obtaining a registered trademark beforehand could be a fraction of what it costs for marketing materials and could potentially save a business thousands of dollars in waste and rebranding. Costs resulting from this oversight could be terminal to a start-up business. Attorneys should be wary; if an attorney files articles of organization or incorporation without advising their client that they should consult a trademark attorney about whether the name is registered by someone else, the attorney may be risking a malpractice claim.
Registration, What's the Point?
Simply put, you don’t need to be federally registered to own your trademark and use it in the market. You become a trademark owner as soon as you start using your trademark with your goods or services. An unregistered trademark is called a Common Law trademark. You establish rights in your trademark by using it, but those rights are limited, and they only apply to the geographic area in which you’re providing your goods or services. However, if someone owns a federally registered trademark of the same name, their rights supersede your common law rights.
The point of registering your trademark is to enjoy the benefits of ownership; for federal registration that could be the nationwide exclusive rights to use the mark, for state registration that could be the increased likelihood of your mark showing up in a trademark search and deterring third parties from using confusingly similar marks. Yes, you heard it right, both state and federal trademark registrations are possible. If the client is only using the name within the state, the client could make a second filing with the Kentucky Secretary of State for state trademark protection within Kentucky. If the client is using or intends to use the name in interstate commerce, the client should file for a registered federal trademark.
Steps to Choosing the Right Name for Your Trademark
Many clients go to an attorney with an idea for a name for their business or product. Often, they’ve invested a lot of time and energy into this one name and are determined to use it in commerce. However, like many great ideas, others may have thought of it too. A trademark attorney should work with the client to see if use of this mark in commerce is feasible. These are a few steps they should follow.
Step One: Securing the Domain Name
The first step to consider is searching for an available domain name for the client. Often the client will abandon the name if the domain choices are not “.com” or require an unreasonably long domain name. The client should buy the domain name before filing the articles of incorporation or organization, to register their business with Kentucky Secretary of State. If the client does not buy the domain name first, someone looking to make money reselling the domain name will buy it. Resellers, sometimes called cybersquatters, often sell the domain name for just under what it would cost a client to file a domain name dispute with ICANN (Internet Corporation for Assigned Names and Numbers), which is usually cheaper than filing a lawsuit under the Anticybersquatting Consumer Protection Act (ACPA). After acquiring the domain name, the client should begin the process to file for state and/or federal trademark registration.
Step Two: Perform a Trademark Search
Step Three: Is Your Trademark Registrable?
The last step in choosing the right mark is to assess the results of the attorney’s analysis and proceed with the application or rethink the mark. After performing a full analysis, an attorney will advise the client on whether the mark is distinct enough to be registerable, and whether it is not so confusingly similar to other marks that it will be blocked during the application process. If the client feels comfortable with the likelihood of success in the application process, they will approve the attorney to submit the trademark application. If, on the other hand, it seems unlikely that the mark will be registerable, the client should rethink the mark they wish to use. An attorney may suggest combining parts of their name and/or words in their industry to get a protectable trademark. Or you may want to refer them to a marketing agency who has experience helping clients pick a name.
The name of your brand, company, products or services are essential to your business. It is what helps distinguish you from you competitors, it is what drives customers to you, and often the name, itself, holds sentimental value in your life. For a business owner, it is vitally important that they have ownership in that name and have exclusive rights to use it to market their business. This is why it is important to contact an attorney who practices trademark law, who will make sure your assets are protected. If you have a trademark you want to register, search online for a local intellectual property attorney to assist you.