Trademarks, Part III

Trademarks – Cornerstone of Business Image and Goodwill Value
Part III: Application and Prosecution of Trademarks
        by Jacques M. Dulin, Esq., Innovation Law Group, Ltd.

          Trademarks have incredible value and importance to businesses as they are the means to “bank” the value of business identity, image and goodwill built-up over time. But these key and valuable business assets can be misused, lost, trivialized or diluted through misunderstanding of their value and use. This article is the third in a series of three that form a “clip-&-save” primer for all businesses, be they start-ups, sole proprietors or established area companies, whether selling goods or services.

          In the first two articles we have discussed what a trademark is, the benefits of Federal Registration, selecting, clearing and adoption of marks for use. Here we discuss the process of applying for and ultimately receiving grant of a Federal Registration.
          Federal Registration of trademarks is obtained by filing an application with the U.S. Government (the United States Patent & Trademark Office, or “USPTO”), prosecution (a back-and-forth rejection / response process between the USPTO and the applicant), and payment of fees. Once the application is filed, it is assigned to a Trademark Examining Attorney (EA) of the USPTO. In 6-9 months, the EA will search the USPTO records and issue an Office Action accepting or refusing registration. Grounds for the USPTO refusing to grant a mark include:

  • The mark is generic or does not function to identify the goods or services as coming from a particular source; for example, the mark applied for is the name of the goods (e.g., “The Pill” for a birth control pill) or is merely ornamentation (use of a logo on a T shirt);
  • The mark is immoral, deceptive or scandalous;
  • The mark disparages or falsely suggests a connection with persons, institutions, beliefs or national symbols;
  • The mark is the name, portrait or signature of a living individual; and
  • The mark is confusingly similar to a previously registered mark.
State trademark registrations, while obtainable in each state, are fast falling into disuse as interstate commerce (including commerce over the Internet) becomes the norm. In addition, the cost of obtaining just a few state marks will exceed the cost of obtaining a Federal Trademark Registration.
          Anytime you claim rights in a mark, you may use the TM or SM designation to alert the public of your claim to trademark rights. You may NOT use the federal registration symbol “®” until after the mark has become Federally registered through the USPTO.
          Does the Government charge fees? Of course! The filing fee per class per mark is currently $325 for electronic filing, and $375 for paper filing. Each 6-month Extension for filing Actual Use is $150, and the Statement of Use itself is $100 per class. Of course, attorneys fees are in addition.
          The first to use the trademark has priority of ownership rights in the trademark. However, Federal Registration of trademarks provides an important exception to that rule, since after five years of use of a Registered mark, the mark becomes virtually incontestable, even if someone else had prior common law use. That assumes the second, later user was not aware of the prior use by the first user.
          These situations, while unusual, are not as rare as you might suspect. For example, a well known regional restaurant, The 3 Crabs, after 45 years use of its mark, sought Federal registration of its name and logo marks for Restaurant Services. The USPTO initially refused to register its mark based on a position that the restaurant’s marks are confusingly similar to a second user’s mark to “3 Crabs” on a fish sauce. The second user had obtained Federal Registration well after The 3 Crabs had started its use, but before The 3 Crabs filed for its registration. After a protracted (and relatively expensive) battle, the restaurant prevailed and its marks were granted registration.
          Once you file, there is an extensive examination, publication and opposition process to go through. Once the EA issues an Office Action, you have 6 months within which to file a Response. This can range from changing the classification (the products or services belong in a class other than initially designated), making corrections or disclaimers, providing a better or more detailed description of the goods/services, adding classes in which you want trademark coverage (say from Wine to Clothing using your wine label), or arguing against the EA’s refusal to register for one or more of the reasons listed above.
          If the USPTO is convinced the mark is registrable, it is published. Anyone who thinks he/she/it may be injured by the issuance of your registration (say of “Fordson” for autos) may oppose. If there is no opposition, then there is an entire legal procedure to determine rights to register, or not.
          Once registered, there are other steps to take to maintain the rights, including filing of Declarations of continued use at the 5-year point, and thereafter Renewals every 10 years, conditioned of course on continued actual use in interstate commerce. A registered trademark can be renewed indefinitely. A trademark’s value grows over time. The Coca-Cola mark, for example, is 110 years old and has an incredible, inestimable value – Bill Gates probably does not have enough money to buy the Coca-Cola mark apart from the company’s other assets.
          If your Olympic Hockey League takes off, and your market research proves accurate, you too could own a very valuable asset – a United States Federal Trademark Registration. That is the document by which you can transfer your business’ good will; as you see it, your mark’s value grows, so the Registration is in essence your business identify bank statement.

          This article is meant as information and education only, not to serve as specific legal advice or opinion. Mr. Dulin is a Registered Patent Attorney admitted to practice before the United States Patent & Trademark Office and is a member in good standing of the Bars of WA, CA, IL and VA. He is the principal of Innovation Law Group, Ltd. of Sequim, WA. He can be reached at 360-681-7305.
          ILG has represented many local, regional and national companies and individuals in trademark matters for many years, including: The 3 Crabs; Olympic Cellars Winery; InsideOut Solutions; Present Events; Jace the Real Estate Company; Haven Trapping Company; the San Jose Sharks NHL team; the San Francisco Bay Blackhawks soccer team; the Rhinos national roller hockey league team; Compaq Arena; Paul Harvey “The Rest of the Story;” Sweet Swing Trainer; The Keith Company; J. Lohr Winery; Mariani Packing Co; Gamma Photo Labs; Ingenuity Software; Industrial Resources; Camaraderie Cellars; Sequim Lavender Growers Association; Straddle Rack Industries; Northwest Performance Software; Archiphyte LLC; Forestry Yachts; Incident Alert Systems LLC; Middlepoint Trading Company, LLC; TP Solar, Inc.; Nexus Law Group; Vintage Hardware, Inc.; Abear Motorsports; RH2 Engineering, Inc.; Clallam Cooperative Association, Inc.; Finishing Touches & Décor Ltd.; OSP Sling, Inc.; Alpenfire Cider, LLC.; and others.


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