An entrepreneur should pay particular attention to their trademark rights. Undoubtedly, trademarks are highly valuable assets

By George Likourezos, Contributing Writer

A strong intellectual property portfolio is the crown jewel of a start-up business. When selecting a brand name for your agtech or other venture, an entrepreneur should pay particular attention to their trademark rights. Undoubtedly, trademarks are highly valuable assets. Apple®, a global brand with a widely recognizable logo, currently maintains a brand value of over $947.1 billion.[i] To take advantage of trademark protections, entrepreneurs must understand precisely what trademarks are.

What is a Trademark?
A trademark is “any word, name, symbol, or device, or any combination thereof”[ii] that identifies, distinguishes, and indicates the source of goods or services from those provided by others, according to the Lanham Act, or the Trademark Act of 1946, codified in Title 15 of the United States Code.

Accordingly, a phrase, a sound, a smell, or even a color might be eligible for trademark protection. A trademark yields an important, intangible asset for entrepreneurs -- goodwill. The goodwill associated with a mark provides assurances of consistent quality, boosted sales, and brand security.

Trademark law in the U.S. protects a trademark owner from confusingly similar use by third parties.[iii] Generally, protection requires use in commerce, including actual use[iv] or a bona fide intent to use[v], and distinctiveness.[vi] While the former point that relates to commerce seems simple enough, the latter can require a degree of ingenuity.

Trademark Distinctiveness

Distinctiveness refers to a trademark’s ability to identify and distinguish goods or services. However, not all trademarks are created equally. The more distinctive a mark is, the greater degree of protection the law affords it.

There are five categories of distinctiveness:[vii]

· Generic: A generic mark contains words that commonly identify a good or service. “BOTTLE” for a water bottle and “PHONE” for a cellular phone are generic. Because such use would grant a monopoly over a class of goods or services, generic marks are never eligible for protection. Trademarks may also become generic over time due to lack of policing. “ASPIRIN,” “THERMOS,” and “VELCRO” are a few such cases.[viii]

· Descriptive: A descriptive mark merely describes a good or service, such as a function, feature, characteristic, purpose, or use thereof. Because a descriptive mark is not inherently distinctive, it only obtains protection if consumers recognize it as a designation in the marketplace, i.e., it acquires a secondary meaning. “COCA-COLA®” for soft drinks and “U.S. NEWS®” for a media company are two examples.

· Suggestive: A suggestive mark hints or suggests at a good or service but falls short of directly describing it; the connection requires a degree of imagination. As such, a suggestive mark is eligible for protection. Some common examples include “AIRBUS®” for aerospace products and “NETFLIX®” for streaming services.

· Arbitrary: An arbitrary mark uses words that bear no relation to the good or service it represents and therefore obtains a higher degree of protection. Popular arbitrary marks include “APPLE®” for electronics and “UBER®” for rideshare services.

· Fanciful: A fanciful mark comprises an invented word or phrase, and thus maintains the highest level of protection. Well-known distinctive marks include “GOOGLE®” for a search engine and “KODAK®” for a photo printing company.

Trademark Registration

A federally registered mark[ix] offers significant advantages, including nationwide constructive notice of ownership[x], the right to sue in federal court[xi], and incontestable status after five years of continuous use.[xii]

Filing a trademark application can cost as little as $250 per class of goods or services.[xiii] However, the registration process can be time-consuming, typically taking 12 to 18 months.[xiv] Therefore, it is in an entrepreneur’s best interest to perform a trademark search prior to registration. A search can determine the availability of a mark and prevent future conflicts, saving both time and money.

A trademark search includes a review of both registered and common law trademarks, among other considerations. Working with an intellectual property lawyer can ensure a comprehensive search and registration process, which can appropriately protect and enforce your business’s trademark rights. Also, bear in mind that trademarks need to be applied for and registered in all jurisdictions where you are currently selling or promoting your goods and services, or have plans to enter in the future, to provide your business with rights afforded to registered trademarks.

George Likourezos is a partner at Carter DeLuca & Farrell LLP based in Melville, NY. He focuses on a variety of sectors including agtech. The article is reflective of his own viewpoints.

Resources and Citations

[i] Statistica Research Dept., Apple's Global Brand Value From 2006 to 2022, Statistica, https://www.statista.com/statistics/326052/apple-brand-value (Jun. 17, 2022).

[ii] 15 U.S.C. § 1127.

[iii] Id.

[iv] U.S. Const. art. I, § 8, cl. 3.

[v] Id. Alternatively, ownership of a foreign trademark registration may permit a subsequent U.S. registration.

[vi] Zatarain's, Inc. v. Oak Grove Smoke House, Inc., 698 F.2d 786 (5th Cir. 1983).

[vii] Id.

[viii] Mary Beth Quirk, 15 Product Trademarks That Have Become Victims Of Genericization, Consumerist, https://www.consumerreports.org/consumerist/15-product-trademarks-that-have-become-victims-of-genericization (last updated Jul. 19, 2014).

[ix] State Trademark Registration is also available.

[x] 15 U.S.C. § 1072.

[xi] 15 U.S.C. § 1114.

[xii] 15 U.S.C. § 1065.

[xiii] Trademark Fee Information, USPTO, https://www.uspto.gov/trademarks/trademark-fee-information?_ga=2.125141258.1006219074.1665434255-2134810509.1665434255 (last visited Oct. 10, 2022).

[xiv] How Long Does It Take To Register?, USPTO, https://www.uspto.gov/trademarks/basics/how-long-does-it-take-register (last visited Oct. 10, 2022).