What is a Trademark & What Does a Business Need to Know in Selecting One?

May 10, 2016

Randal J. Brotherhood

What is a trademark and what a business should think about when selecting a trademark as a commercial symbol to identify its product or service?

As a backdrop for discussing trademarks, let me start with an example of how people relate to trademarks in the real world.

Imagine you are on a family road trip in the car and your kids get hungry, so you get off the interstate and see the McDonalds golden arches among the numerous restaurant signs lining the road and you turn into the McDonalds because its golden arches symbol indicates to you several things.

First, your kids are familiar with the food; second, you know it is going to be reasonably priced; and third you know that you’ll get it quickly.

This “positive association” you have with the McDonalds golden arches has made you pick the known over the unknown, which might have been far better, but also could have been far worse and more expensive or slow.

So, your turning your car into the McDonalds upon seeing the golden arches illustrates the power of trademarks.

A trademark, in its most basic sense, helps consumers relate to a business’s goods or services. If a business has high quality products, then customers will associate that business with positive feelings, so the next time they see the business’s trademark these positive attributes will come to mind.

That, in a nutshell, is why trademarks exist and why businesses expend significant resources to establish and protect them.

So against this backdrop, let’s start with the basic question: What is a trademark in a legal sense? A trademark is any word, name, symbol, device, or any combination of these elements that is adopted for use in commerce by business:

  1. to identify the business’s products;
  2. to distinguish those products from goods manufactured or sold by another business; and
  3. to indicate the source of the products denoted by the trademark.

A number of things can function as a trademark. It can be a word, such as a PEPSI for soda pop; a slogan, such as “DON’T LEAVE HOME WITHOUT IT” for credit cards; or a design, such as Nike’s “swoosh” logo on athletic shoes.

A trademark can also be the shape of a product container, a color, or even a sound—think of the NBC chimes on TV.

Lawyers classify trademarks on a scale which determines the extent of the legal protection they are afforded, with marks that are more distinctive being given a wider scope of protection than the less distinctive ones made up of common or descriptive words.

The order of marks on this protective scale, starting with the most distinctive and protectable, is what the law calls a “fanciful” mark; then, moving down the scale, an arbitrary mark; next, a suggestive mark; and, lastly, at the other, lowest-protection end of the scale, a descriptive mark.

Types of Trademarks - Fanciful, Arbitrary, Suggestive, Merely Descriptive, Generic

It is always best to select a trademark that is fanciful, arbitrary, or at least suggestive. The more distinctive the mark, the better the chance of protecting and registering it. We’ll talk about federal trademark registration in a future post.

A fanciful mark is one that is created solely for the purpose of functioning as a trademark and it has no other meaning. A good example would be EXXON to denote gasoline.

An arbitrary mark is one that consists of a common word or symbol, but arbitrarily applies it to the goods or services in question such that the word or symbol does not describe or suggest the product, or would even be normally associated with the product. Think of APPLE to refer to computers.

A suggestive mark is one that suggests, but doesn’t actually describe qualities or functions of a particular product or service. A typical example of a suggestive mark is GREYHOUND for bus transportation services.

Arbitrary, fanciful, and suggestive marks are considered to be inherently distinctive and are given a high degree of legal protection.

A merely descriptive mark, on the other hand, generally affords the narrowest scope of protection. The descriptive mark immediately identifies or brings to mind the characteristics, qualities, functions, or other features of a product or service.

Take, for example, a car repair business that selects the trademark BEST MECHANIC. That term could be considered to describe the services denoted by the mark and would not be protectable because you would not be able to prevent others from using the term BEST MECHANIC. A trademark does not provide a monopoly on everyday language, and you cannot exclude others from using common words to appropriately and fairly describe what it actually is that you are selling.

A merely descriptive term is protectable for trademark purposes only when it holds or, with continued use over time, acquires, a secondary meaning or level of universal notoriety and distinctiveness. That is, when the consumer accepts and recognizes it as denoting only one source and the term, because of extensive use in the marketplace, becomes synonymous with that particular product or service. A good real world example of a descriptive mark that has achieved this kind of distinctiveness is CHAPSTICK.

Finally, I should say a word about generic trademarks. Generic words are, of course, nothing more than the common word for a type of thing—the term “automobile” refers to just that—an automobile, and, as such, can’t function by itself as a trademark for a car.

Generic terms are, by definition, incapable of indicating source and they can never function as trademarks on the theory that, as indicated earlier, a trademark cannot exclude others from appropriately and fairly describing in common terms what it is that the owner of the mark is selling.

I unfortunately often see business clients gravitate toward descriptive trademarks, hoping that by referencing a feature of their product or service in their trademark potential customers will immediately identify their product or service. But because a descriptive mark offers weak protection, I urge them to avoid this tendency and pick trademarks that, from a legal standpoint, are fanciful or arbitrary and use “coined” words or terms that have been invented and do not have a dictionary meaning.

As a final point, I want to emphasize that, once a business selects a trademark, there are other important things that must be considered before putting it in use.

First and foremost, it is critical to make sure that that the selected trademark is not identical or confusingly similar to another trademark that may already be in use by someone else for the same or similar goods or services.

This is a key point that merits its own discussion, which I’ll be covering in a future post.

Randy Brotherhood devotes a substantial part of his practice to intellectual property, including patents, trademarks and copyrights. If you have any questions or would like to learn more about business trademark registration and protection, please contact Randy at rjb@mtfn.com or call (414) 273-1300.