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Most business owners recognize that trademarks are not merely works, symbols, or slogans, but are the carefully crafted personalities that identify the products or services of a business. As such, trademarks play a vital role. However, some common misconceptions may be preventing business owners from maximizing the value of their important trademarks.

One common misconception is that if your business doesn’t sell products to the general public, then it doesn’t have any trademarks worth protecting. However, every business has at least one trademark, and probably more. A trademark is any word, symbol or device that distinguishes one seller’s goods or services from those of its competitors. Consumer product manufactures are not the only businesses that have trademarks in need of protection. Businesses that provide only services or sell their products business-to-business (B2B) have valuable trademarks, too. These businesses do not want their competitions using similar trademarks to hitch a free ride on the goodwill they have created with their customers.

NAME 'AVAILABLE'

Another misconception is that your business can use your name without challenge if the secretary of state says it’s “available.” Although most secretary of state’s offices permit registration of a business name upon incorporation, this process does not guarantee that such name can be used without violating another’s rights.

The principles of trademark law govern disputes between confusingly similar trade names. Trademark law provides broad protection, requiring competitors to choose more dissimilar names than does any secretary of state. While slight differences may be acceptable on the secretary of state’s website, insignificant differences between trade names are not always sufficient to avoid trademark infringement. A trademark clearance search conducted by an experienced trademark attorney is the best way to determine if another has superior rights to your trade name or mark.

A third misconception is that your business can avoid trademark infringement by making slight changes to your mark. Trademark infringement exists upon the use of any trademark (even a completely different word, slogan, or symbol) that, in view of an earlier used mark of a third party, creates a likelihood of confusion as to the source of sponsorship of the goods or services sold in connection with such marks. Trademark infringement is a complicated matter that is much easier to commit than avoid. A claim of trademark infringement is very expensive to litigate and can potentially ruin the alleged infringer’s reputation and decimate its investment.

A fourth misconception is that trademark registration is a quick and easy process accomplished by filling out a few forms. Obtaining a federal registration is not accomplished in a few weeks or even a few months. These days, the U.S. trademark registration process can take anywhere from 18 to 24 months. Although the U.S. Patent and Trademark Office’s
website allows anyone to file a trademark application online, this process appears deceptively easy. The online forms are rife with traps for the unwary. As with your taxes, it is best to work with an experienced professional when filing for federal trademark protection.

A fifth misconception is that you have to wait until you begin using your new business or product name before you can protect your trademark. That’s not true. You can apply for a federal trademark registration before you start to use a new business or product name. This type of filing permits a business owner to “test the water” at the Trademark Office and determine if the chosen mark is capable of registration before investing substantial amounts of money and time in product development and advertising.

FILER VS. USER

A sixth misconception is that your U.S. trademark registration permits you to use your mark anywhere in the world. Trademark rights are acquired on a country-by-country basis. Outside of the United States, trademark rights are granted to the first filer – not the first user. For this reason, business owners will want to register their marks outside the United States in the markets where they are doing business or planning on doing business over the next five to 10 years.

A seventh misconception is that it doesn’t matter if others are using your mark because consumers know your products are the best. However, a trademark owner has a duty to prevent others from infringing on its marks. Someone else’s use of the same or similar mark can damage the trademark owner in many ways. It could cause the trademark owner to lose goodwill, lose consumer recognition, or both; it could divert sales away from the trademark owner; and, it could harm the trademark owner’s reputation in the marketplace. Eventually, whatever trademark rights have been acquired will be lost.

RIGHTS CAN BE LOST

Finally, there’s the misconception that once your mark is registered it will always be protected. If a mark is not used in the ordinary course of trade, your rights in such mark may be lost. Registrations for marks not in use may be cancelled. Trademark rights can also be lost if the mark is not used correctly. Generic terms such as “escalator”, “aspirin”, and “thermos” were once trademarks that fell into the public domain after systemic and continuous misuse by consumers and the media – and without timely action by the trademark owners to curb the misuse.

In short, ignorance in the ways of trademark law may be bliss but, as with so many aspects of running a business, it could well be costly. The good news is that investing in expert legal advice can protect your rights – and enhance your bottom line – now and into the future.

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