What is a trademark and why should a startup care?

What makes your business different from your competitors? What makes your business similar to the competition? How do you differentiate your company name, goods, and services? Should you trademark it?

Trademarks protect your business’s good will and reputation. A trademark protects a word, phrase, symbol, and/or design that identifies and distinguishes a company or its goods from others. Trademark protection is important because it stops companies from using the same or confusingly similar identifying marks.

With trademark protection in place, a company can build value in its brand. This is because a company’s name becomes associated with quality, reliability, innovation, performance, and value. By common misconception, most entrepreneurs think that only large businesses benefit from trademarks. However, small businesses can also develop goodwill and protect it through trademarks.

Registered v. Unregistered Trademarks

A business does not need to register a trademark for protection to exist. For both registered and unregistered marks, use of mark in commerce can provide trademark protection. The first user of any mark has rights to it, registration or not, given certain geographical and industry limitations. The key requirement is that the mark must identify and distinguish the product from those of competitors.

When registering a mark that are a few decisions to make: (1) trademark of company name or product; (2) Federal or State registration; (3) Use or Intent-to-Use Registration. The decision whether to trademark the company name or specific product is a case-by-case analysis depending on the business circumstances. Federal protection is much stronger than state protection because it extends to all states. When a company is involved with interstate commerce, it may receive federal unregistered protection. If a company files an intent to use registration, it may receive protection before the idea is fully developed and brought it to market. In this case, the protection costs more because a company must pay for the initial application plus an additional fee when the mark is brought to market. (Source)

Conducting a Search

In designing our search strategy, we review current trademark filings for potential competitors to find the most common category or class for US trademark registration. A determination as to whether a name/mark is confusingly similar to another involves a two-step process: First, we look at the marks themselves for similarities in appearance, sound, and connotation, that is, the commercial impression of the trademark. Second, we look for likely confusion by comparing the goods or services to determine if they are related. Similarity in one of the referenced elements is sufficient to find a likelihood of confusion. The goods or services need not be identical or directly competitive to find a likelihood of confusion. Under the circumstances, the goods or services need to be related in some manner that could lend the purchaser to believe the goods or services come from a common source.

Search Limitations

Any search has limitations. First, as indicated in the front of the search report, it is only current as to the dates indicated and, thus, events such as new applications, issuance, publication, or cancellations of marks may occur after the listed dates. Further, there may be errors in the data itself. Finally, the search database does not always contain all common law usage marks. Equally, in reviewing the report, attorneys can only use their experience as a guide. The reactions of another company or the trademark examiner to your application are not 100% predictable.

For more information on trademark registration, check out our checklist!

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