Trademark Registration and Licensing
The federal statute covering trademarks, the Lanham Act, defines a trademark as “any word, name, symbol or device or any combination thereof” used “to identify and distinguish [the trademark owner’s] goods … from those manufactured or sold by others and to indicate the source of the goods.” The law of unfair competition is similar to trademark law and protects unregistered marks as well as remedying situations where one’s goods are passed off by another as his own, i.e. counterfeiting and knockoffs, and false advertising.
Trademarks developed from the medieval practice of placing a mark on goods to identify them as one’s own, in other words, the craftsman identifying himself as the source of the product. Trademark law in the United States evolved relatively recently from state common law (court decisions, not statutes) and was first codified as a federal law in 1946 as the Lanham Act found at 15 U.S.C. §§1051-1127 (1988). Although states also have statutes covering registering and using marks, they are patterned after, and often pre-empted by, the federal law.
To be registered under federal trademark law, a mark must, among other things, be actually used in interstate commerce (not just locally or in one state), not be generic or merely descriptive of the goods or services it is used in connection with, and not be likely to cause consumer confusion with another mark. Registration under individual state statutes requires the same formalities except that use in interstate commerce is not necessary. Registration of the same mark at both state and federal levels is possible. If a mark is used but not registered, the owner may have “common law” rights.
Trademarks have traditionally included words, slogans, logos and more recently colors (like pink fiberglass insulation), product configurations, sounds (like the NBC chimes) and even fragrances. Trademark protection can extend to domain names as well.
Only federally registered marks can use the ® symbol. If a mark is not registered, it’s common to identify that you are asserting ownership of it by using the TM symbol for goods or SM for services.
Federal registration run 10 years and can be continually renewed for additional ten-year periods as long as the mark is still being used for the goods or services that are listed in the registration. Under the Illinois Trademark Registration and Protection Act, a state registration has a 5-year duration, which also may be renewed by the owner for additional 5-year periods as long as the owner continues to use the mark for the goods and/or services described in the registration.
The registration process typically takes at least 9 months if the mark is actually in use when the application is filed, and can take years if the mark is not in use when the application is filed. However, if a proper search is done before the application is filed, one can have a high level of comfort knowing that the new mark will not infringe other marks found in the search or be able to avoid the risk of a lawsuit and wasting time and money in launching a mark that cannot ultimately be used and owned. Federal registration gives the owner the exclusive right throughout the United States to use the mark on the goods and/or services that are listed in the registration.
Common Law Rights
A mark can be owned and protected even without being registered but only in the geographic area in which the mark is used and recognized as being associated only with the party that is using the mark. Because trademark rights come from proper use of the mark, even if a mark is not registered it can function to identify the source of goods and services and can be protected as intellectual property if the owner can prove the mark is a “distinctive” mark, not just a generic term that defines the product or a merely descriptive word. Generally, this means the first party to use a mark in a certain geographic area for a particular product or service has the superior legal right to that mark.
The owner’s rights in a mark are infringed if another party, usually a competitor, uses a mark that “creates a likelihood of consumer confusion” because it is the same or very similar in appearance, how it sounds or what it means and it is used on the same or very related goods and/or services. Common law marks and those registered only at the state level are infringed if the other user is within what courts defer to as the “zone of protection,” in other words, the geographic market area that is established by the first user. Federally registered marks can be infringed by anyone creating a likelihood of consumer confusion in the United States. In the context of domain names, I have represented mark owners in successfully challenging infringing domain name owners through arbitration under the Uniform Domain Name Dispute Resolution Policy (UDRP) that all domain name registrants are subject to.
If someone other than the owner of a mark uses it, that use must be authorized and that authorization is a license. Proper licensing requires the mark owner to supervise the nature and quality of the goods and services provided by the licensee, so that the reputation and goodwill represented by the mark is not diminished. Without proper wording, if the mark owner grants permission to a third party to use the mark, the owner will weaken and possibly lose the rights in the mark.
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