Slides from Dayton AMA event: Protect Your Trademark: An Essential Part of the Marketing Plan

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Brand names, logos, and other trademarks are essential to properly manage your brand. But if your trademark is not legally protectable, then all of the goodwill you are building could be useless. Learn how to select and best protect your trademarks when intellectual property lawyer Roger Bora explains:

* The role of trademarks
* Trademark selection
* Trademark clearance
* The federal trademark registration process
* The advantages to federal trademark protection
* Proper trademark usage

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Slides from Dayton AMA event: Protect Your Trademark: An Essential Part of the Marketing Plan

  1. 1. Brand Name Selection and Protection Roger H. Bora Thompson Hine LLP Dayton, Ohio 937.443.6817 roger.bora@thompsonhine.com © 2009 Roger H. Bora ATLANTA BRUSSELS CINCINNATI CLEVELAND COLUMBUS DAYTON NEW YORK WASHINGTON, D.C.
  2. 2. Discussion Topics Role of trademarks (owner and consumer) Selecting a valuable trademark Availability searches - Clearance Domain names Trademark rights Federal registration process Advantages of federal registration Maintaining your federal registration Protecting & enforcing trademark rights Licensing Issues 2
  3. 3. Role of Trademarks Source Identifiers ® Trademarks can be: Words, letters, numbers, shapes, colors, sounds or any symbol used to identify the source of products and services ® Not all trademarks are created equal ® Spectrum of marks 3
  4. 4. Role of Trademarks Source Identifiers ® Valuable trademarks distinguish goods or services from competitors ® Nokia and Motorola ® Best Buy and Circuit City 4
  5. 5. Role of Trademarks Source Identifiers ® Trademarks that do not distinguish goods or services from competitors are generally not valuable and could potentially harm brand image ® Heart Specialists of Southern Ohio ® Southern Ohio Heart Specialists 5
  6. 6. Role of Trademarks Trademarks and Customer Loyalty ® Customer loyalty=Repeat business ® Consumers know exactly what to expect when they purchase a Big Mac from McDonalds ® It is the consistent level of quality at a fair price that generates repeat business for McDonalds ® Not best quality but consistent quality 6
  7. 7. Role of Trademarks Trademarks and Customer Loyalty ® Lack of a consistent level of quality damages a trademark and potentially invalidates a trademark 7
  8. 8. Role of Trademarks Trademarks and Customer Loyalty ® CONSUMER PERCEPTION = GOODWILL ® GOODWILL = A VALUABLE ASSET ® Trademarks protect the “goodwill” and brand image that businesses generate 8
  9. 9. Role of Trademarks Trademarks and Customer Loyalty ® Trademarks enable consumers to avoid companies with bad reputations and seek out those with good reputations ® Heart Specialists of Southern Ohio ® Southern Ohio Heart Specialists 9
  10. 10. Selecting a Valuable Trademark Spectrum of Marks Generic Descriptive Suggestive Arbitrary Coined 10
  11. 11. Selecting a Valuable Trademark Spectrum of Marks ® The Four D’s ® Distinctiveness – legally protectable? ® Distinguishable from competition? ® Da Position? ® Da Attributes? 11
  12. 12. Selecting a Valuable Trademark Spectrum of Marks - Generic ® Name of product or service itself – not protectable ® YO-YO (once a trademark - what was the generic term?) ® Escalator (once a trademark) ® Audio Book Club ® Pizza Place ® Computer Store 12
  13. 13. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® A mark is considered merely descriptive if it describes an ingredient, quality, characteristic, function, feature, purpose or use of the associated goods or services ® Not immediately protectable upon first use 13
  14. 14. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Consumers may not perceive descriptive terms as trademarks ® Dayton Real Estate Agency ® Best Software Developers ® Quick Epoxy Sealant 14
  15. 15. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® AFTER TAN - for after sunning lotion ® CD CREATOR - for computer program ® COZY WARM ENERGY SAVERS - for pajamas ® 5 MINUTE - for glue that sets in… ® HONEY ROAST – for roasted peanuts ® ITOOL – for Internet design tool services ® COMPUTER XPERTS – for computer repair services 15
  16. 16. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Some descriptive (non-inherently distinctive) trademarks can become strong marks once secondary meaning attaches ® News Week ® Best Buy 16
  17. 17. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Acquiring secondary meaning can take five years or more unless you have a big advertising budget for the product – and I mean BIG! ® Some descriptive marks may never reach protectable trademark status because they are too descriptive 17
  18. 18. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Even if they do acquire secondary meaning, your competitors can still use your “descriptive” trademark in a “fair use” sense to describe their own products – and you can’t stop them! ® Even a federal trademark registration WILL NOT stop them! 18
  19. 19. Selecting a Valuable Trademark Registration Number: 1698772 Mark (words only): WHISPER QUIET Register: Principal Owner: WHIRLPOOL PROPERTIES, INC. GOODS AND/OR SERVICES: dishwashing machines and clothes washing machines Section 2(f) 19
  20. 20. Selecting a Valuable Trademark ® DeLonghi dishwashers are whisper quiet. DeLonghi dishwashers use sound absorbent material and special technical features to lessen vibrations and therefore sound. DeLonghi dishwashers can wash a load at anytime of the day without disturbing the household. 20
  21. 21. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Can be a marketer’s dream! ® Less advertising to sell product! – Right? ® Requires increased advertising to build secondary meaning! ® Hurry! Competitors may use mark as a trademark before secondary meaning attaches! 21
  22. 22. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Geographically descriptive ® Maine Lobsters (for lobsters from Maine) ® Geographically misdescriptive ® Ohio Windows (for windows from Vermont) ® Geographically deceptively misdescriptive ® Maine Lobsters (for lobsters from Massachusetts) 22
  23. 23. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Laudatory (Puffery) ® Preferred Golf Resort ® Deluxe, Supreme, Dependable ® Surname ® Smith’s Trucking 23
  24. 24. Selecting a Valuable Trademark Spectrum of Marks - Merely Descriptive ® Ornamentation 24
  25. 25. Selecting a Valuable Trademark Spectrum of Marks - Suggestive ® Suggests attributes/advantages (Not quite descriptive) ® Immediately protectable upon first use ® ROACH MOTEL – for insect traps ® FLORIDA TAN – for suntan lotion ® HEARTWISE – for low-fat, low-cholesterol foods ® MOVIEBUFF – for database of movie information 25
  26. 26. Selecting a Valuable Trademark Descriptive or Suggestive? ® AMERICA’S BEST POPCORN (Popcorn) ® DIAL-A-MATTRESS (Mattress sales) ® GOBBLE GOBBLE (Turkey) ® EASYLOAD (Tape recorders) ® LIP RENEWAL CREAME (Lip Moisturizer) ® SLICED ANIMALS (Puzzles) ® 5 MINUTE (Glue that sets in five minutes) ® FILIPINO YELLOW PAGES 26
  27. 27. Selecting a Valuable Trademark Spectrum of Marks - Arbitrary ® Common words used in meaningless context ® Immediately protectable upon first use ® Legally strong, but can be risky from marketing perspective ® CAMEL cigarettes ® APPLE computer ® WILD HORSE beer 27
  28. 28. Selecting a Valuable Trademark Spectrum of Marks - Coined/Fanciful ® Made up words ® First to offer product, should create generic term ® Remember YOYO? -- The YOYO___ (what?) ® Yahoo, Xerox, Lexus, Kodak 28
  29. 29. Selecting a Valuable Trademark Spectrum of Marks - Strong Marks ® Coined/Fanciful (Kodak, Verizon, Clorox) ® Arbitrary (Apple Computer, Wild Horse Beer) ® Suggestive (Wrangler, Die Hard, Close Up) 29
  30. 30. Selecting a Valuable Trademark Spectrum of Marks - Types of Marks to Avoid ® Merely descriptive marks (Car Fresheners) ® Surname (Smith’s Auto Repair) ® Laudatory (Best Beer in America) ® Misspellings (Kleener) ® Geographical (Centerville Self Storage) ® Acronyms (ACCD – Most are meaningless) ® Hard to remember ® Arbitrary numbers and/or letter 30
  31. 31. Selecting a Valuable Trademark Spectrum of Marks – Unprotectable ® Generic (Auto Repair Shop or Super Glue) ® Deceptively misdescriptive (“Maine Lobsters” for lobsters from Massachusetts) ® Scandalous 31
  32. 32. Selecting a Valuable Trademark ® Selecting the “right” brand name for your product will not only allow you to differentiate your product from your competitors’ products but will also allow you to focus your time and efforts on growing the brand itself rather than continuously trying to enforce weak/descriptive marks 32
  33. 33. Selecting a Valuable Trademark Preliminary Considerations ® To influence the decision making process, a brand name should symbolize the strengths, image and values desired to be associated with the brand ® A good name may be the best insurance for long-term success 33
  34. 34. Selecting a Valuable Trademark Preliminary considerations ® Rather than look at how you perceive your product or how you want consumers to perceive your product, consider how consumers ALREADY perceive your product or similar products ® Look for the “solution” inside the prospect’s mind ® Then select a name that reinforces consumers’ perceptions or wants 34
  35. 35. Selecting a Valuable Trademark Preliminary considerations ® What are consumers looking for from your product/service? ® Do they want security, accuracy or reassurance? 35
  36. 36. Selecting a Valuable Trademark 36
  37. 37. Selecting a Valuable Trademark 37
  38. 38. Selecting a Valuable Trademark Preliminary considerations – Positioning? ® Can you take a position in the minds of consumers? ® Select a name/slogan that begins the positioning process 38
  39. 39. Selecting a Valuable Trademark 39
  40. 40. Selecting a Valuable Trademark Melts in your mouth, not in your hand 40
  41. 41. Selecting a Valuable Trademark 41
  42. 42. Selecting a Valuable Trademark Preliminary Considerations ® Competitors’ trademarks? ® Do they already hold a position in the minds of consumers? 42
  43. 43. Selecting a Valuable Trademark Preliminary Considerations ® Should you really compete for that same position or should you find a hole and fill it? Make that hole yours! Own it! ® Select that mark/slogan that will capture the position or niche, then don’t let it go! 43
  44. 44. Selecting a Valuable Trademark 44
  45. 45. Selecting a Valuable Trademark 45
  46. 46. Selecting a Valuable Trademark First Class is Michelob 46
  47. 47. Selecting a Valuable Trademark Preliminary Considerations ® Can you exploit any weaknesses of your competitors? ® Then reposition them? 47
  48. 48. Selecting a Valuable Trademark 48
  49. 49. Selecting a Valuable Trademark Preliminary Considerations ® If taking a position in your industry is not available or practical, consider: ® Selecting marks that suggest an advantage of your product or a result that consumers want from your product and/or service ® Selecting an arbitrary or coined mark and using it with a tagline that touts positive attributes of product 49
  50. 50. Selecting a Valuable Trademark 50
  51. 51. Selecting a Valuable Trademark 51
  52. 52. Selecting a Valuable Trademark 52
  53. 53. Selecting a Valuable Trademark 53
  54. 54. Selecting a Valuable Trademark 54
  55. 55. Selecting a Valuable Trademark 55
  56. 56. Selecting a Valuable Trademark Preliminary Considerations ® Consider the image that you want to convey, then select a slogan that “sells” that image 56
  57. 57. Selecting a Valuable Trademark Preliminary Considerations ® What should your brand name represent? 57
  58. 58. Selecting a Valuable Trademark Preliminary Considerations ® Consider growth of products/services (Don’t be too narrow) 58
  59. 59. Selecting a Valuable Trademark 59
  60. 60. Selecting a Valuable Trademark Considerations ® Memorability – Keeping it memorable is your advantage! ® Meaning - Should communicate positive attributes ® Short, Simple and easy to understand ® Likeability – Die Hard ® Language problems? Nova 60
  61. 61. Selecting a Valuable Trademark Global Considerations ® Strong in one country may be descriptive in another ® If descriptive, consider adding design element ® Language barriers? Nova ® Consistent global icon? 61
  62. 62. Selecting a Valuable Trademark Global Considerations – Global Icons 62
  63. 63. Selecting a Valuable Trademark Global Considerations - Gerber Enters African Market! 63
  64. 64. Selecting a Valuable Trademark Global Considerations ® In Africa, companies routinely place pictures on the label of what is inside, since most people cannot read ® African consumers were appalled because they thought the jar contained ground up babies 64
  65. 65. Selecting a Valuable Trademark Global Considerations ® Pepsico launches slogan in China! ® “Come Alive with the Pepsi Generation” ® Translation: “Pepsi Brings Your Ancestors Back from the Grave” 65
  66. 66. Selecting a Valuable Trademark ® Strong brands have powerful visuals ® So, consider using logos or visuals to reinforce the brand 66
  67. 67. Selecting a Valuable Trademark 67
  68. 68. Selecting a Valuable Trademark 68
  69. 69. Selecting a Valuable Trademark 69
  70. 70. Clearance Why? ® Is selected mark available for use? ® May avoid lawsuits – cheaper than defending claims ® Determines whether businesses can expand geographically ® Determines whether businesses can expand their products and/or services under same trademark 70
  71. 71. Clearance Why? ® Consider expansion of trade ® ABC Auto Repair opens for business in Dayton on January 1, 2009 and ABC Towing opens for business in Oakwood on January 7, 2009. Problem? 71
  72. 72. Clearance Why? ® Will reveal whether a mark is weak or strong ® Are there many users of same or similar term(s) for same or similar goods and services? ® Weak marks receive a narrow scope of protection (crowded field) ® Atlantic Bank of New York ® First Atlantic Bank 72
  73. 73. Clearance Why? ® Cheaper than re-educating customers of newly adopted trademark ® Evidence of clearance may be used to show that good faith was exercised to ensure that no other similar marks were in use 73
  74. 74. Clearance Types of Searches ® Knockout search (USPTO, Internet, Domain names) ® Enhanced knockout (USPTO, State, Internet, Domains) ® Full search ® U.S. Federal trademark database ® State trademark databases ® Common law marks ® Business name directories ® Domain names ® International registrations 74
  75. 75. Clearance Global Clearance ® U.S. counsel evaluates foreign searches ® Protection less predictable in certain jurisdictions (i.e., descriptiveness) ® Clearing U.S. does not clear Mexico, Canada… ® Request comment on negative connotation in foreign country 75
  76. 76. Clearance 76
  77. 77. Clearance Global Clearance - When and How? ® Well before launch ® U.S./Multi-country searches ® WISS ® Start in-house? (Saegis) 77
  78. 78. Clearance Global Clearance - Where? ® Start in priority countries ® Conduct searches in stages (countries or goods/services) 78
  79. 79. Domain Names/Internet ® Before adopting and using a selected trademark you may want to reserve the Internet domain name ® Should also reserve commonly misspelled marks - Pirates ® If already using your trademark and want to register a domain name, may need to consider .net or .biz etc… if .com is already reserved or adding another term to your domain name 79
  80. 80. Trademark Rights ® Use alone creates common law trademark rights ® In U.S. and some other countries. First to file in other countries. ® Federal registration provides additional trademark rights ® (TM), (SM) and ® (Which one should I use?) 80
  81. 81. U.S. Registration Process ® ITU applications ® Use-based applications ® Based on foreign registration 81
  82. 82. U.S. Registration Process ® Examination process ® May receive a letter from an Examiner and, if so, must respond within six-month period ® Publication for opposition ® Trademark is published in the Trademark Official Gazette ® Registration ® If there is no opposition to registration, registration certificate should issue (but must have use first) 82
  83. 83. Global Registration Considerations Planning for Registration ® Where to protect? (Priority 1, 2 and 3 jurisdictions) ® Reach of global advertising/Sales figures? ® Geographic scope of initial launch? ® Location of current customers? ® Expansion plans? (2 years, 5 years) ® Staged filings/Multi-year budget 83
  84. 84. Global Registration Considerations Global Protection Filing Mechanisms ® Madrid Protocol – Advantages ® 78 members Australia, China, EU, France, Japan, South Korea, Switzerland, United Kingdom… 84
  85. 85. Global Registration Considerations Global Protection Filing Mechanisms ® Madrid Protocol – Some Advantages ® One application – English – File at USPTO ® One filing fee ® No foreign agents needed for filing ® One registration with one registration number ® One renewal application and one renewal fee ® Subsequent designations at any time 85
  86. 86. Global Registration Considerations Global Protection Filing Mechanisms ® Madrid Protocol – Some Disadvantages ® Central attack - three-month transformation period ® Amendments to home country application - registration affect all designations ® Scope of goods/services narrower for IR based upon U.S. registration 86
  87. 87. Global Registration Considerations Global Protection Filing Mechanisms ® Community Trademark (European Union) ® Covers 27 EU countries Finland, France, Germany, Ireland, Italy, Spain, Sweden, U.K…. 87
  88. 88. Global Registration Considerations Global Protection Filing Mechanisms ® Community Trademark (EU) – Some Advantages ® One application and one fee ® No use required to get registration ® One registration to maintain ® Good to all or good to none 88
  89. 89. Advantages of Federal Registration ® Constructive notice that the owner of the mark has the right to use the mark throughout the United States, even if the mark is not being used in a specific geographical area (Subject to common law rights) ® After five years of continuous use in commerce, the mark becomes incontestable, which means that the registration cannot be attacked on basis of prior use or descriptiveness 89
  90. 90. Advantages of Federal Registration ® Registration is prima facia evidence of validity that the registrant owns the mark and has exclusive right to use the mark in commerce ® May receive statutory damages, including attorneys fees ® The registrant may sue in federal court 90
  91. 91. Advantages of Federal Registration ® The registrant may use the powers of the federal government (U.S. Customs Services) to prevent the importation of products that use infringing marks ® Registrant can receive an earlier application filing date under the Paris Convention if Registrant files an application in a member country within six-months of the filing date of the U.S. application 91
  92. 92. Advantages of Federal Registration ® A registrant obtains the right to use the symbol ® after its mark, warning others of the federally registered status of its mark ® The USPTO should refuse registration of a mark that is confusingly similar to the registered mark 92
  93. 93. Maintaining Your United States Trademark Registration ® Affidavit of continued use between 5th and 6th year of registration ® Affidavit of incontestabilty between 5th and 6th year of registration ® Ten year renewal 93
  94. 94. Protecting and Enforcing Your Trademark Rights Trademark Use ® An owner must use its trademark before common law rights are acquired, or before a U.S. registration certificate will issue (Some countries first to file) ® Failure to use mark for three consecutive years may result in abandonment of trademark rights (3-5 years most countries) 94
  95. 95. Protecting and Enforcing Your Trademark Rights Proper Trademark Use ® Do not use a mark as a verb or noun but rather use as an adjective ® The Xerox is efficient ® Our new copier will let you Xerox quicker than before 95
  96. 96. Protecting and Enforcing Your Trademark Rights Proper Trademark Use Instead use: ® The new Xerox photocopier is much faster and efficient 96
  97. 97. Protecting and Enforcing Your Trademark Rights Proper Trademark Use ® Now generic: ® Yo-Yo, Nylon, Zipper, Aspirin, Thermos 97
  98. 98. Protecting and Enforcing Your Trademark Rights ® Trademark rights can be lost if one fails to police and enforce those rights ® Monitor newly filed trademark applications (US and/or Global) 98
  99. 99. Licensing ® Income generation ® Broadens scope of protection of trademark - covers other goods and services 99
  100. 100. Licensing: Do’s & Don’ts DO’S ® Quality Control ® Trademark Infringement Procedures ® Non-Exclusive or Exclusive? (Best Efforts) ® Territorial Restrictions ® Policing Third Party Use by Licensee ® Licensee Estoppel – Licensee’s Challenge of Validity 100
  101. 101. Licensing: Do’s & Don’ts DON’TS ® Too Little Control Naked Licensing – May result in abandonment of mark ® Too Much Control Anti-trust – Tying arrangements and territorial restrictions Product Liability – May be on hook for damages Franchise -- Different laws and potential civil/criminal penalties 101
  102. 102. Questions? 102

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