I'm addressing this article to new and small businesses because I believe that there is no rational reason a large or profitable company should not have registered its logo as a trademark. Bill Gates, Jack Welch, Donald Trump or any other titan of industry can debate me on this proposition later, but for now let's bring the focus back to you, the small business owner. When is trademarking a logo critically important to your business?
First of all, when I use "trademark" as a verb, I am referring to the process of federal registration of a trademark with the United States Patent and Trademark Office ("USPTO"); I use the concepts of "trademarking" and "registering a trademark" interchangeably. While I will spare you the details of the process of registering a trademark (which can be found in many of my other articles and resources) for the sake of brevity, please note that you should expect to spend as much as $1,500-$2,000 to do it right. I realize that, for many fledgling and cash-strapped businesses, this is a lot of money to spend on anything, so the focus of my article is to help you determine whether and why it is worth the investment to trademark a logo.
OK, let's start at the beginning. You've recently started a business. You have a million headaches to deal with. Getting that line of credit from the bank. Hiring your first employee. Finding a good location. Surviving the first year.
Of course, one headache is of paramount importance if you want to thrive and succeed in business: selling your products or services. Tending to this problem can make most of the other ones seem trivial. Whatever you are selling, certain things identify or "brand" your goods and services: your company name, product names, product packaging, logos, slogans, the look and feel of the place you sell your product. These serve as your trademarks and they vary in relative importance depending upon the nature of your business. They also comprise a substantial chunk of the value of almost any successful business in an information-based economy. In fact, every business should have filed at least its strongest trademark. Why?
Danny Bronski covers trademark principles and apocalyptic warnings as to what happens when you ignore these principles ad nauseum throughout our VeriTrademark site and articles database. For now, let's settle for some oversimplified reasons for registering a trademark. Everything you sell builds goodwill (something with an actual monetary value) in the things that identify you as the seller, and a registered trademark is the vessel for this identification process. Every day you ignore protection of that goodwill is a day that it could be eliminated by the discovery that your identify is trampling on the rights of another (purposefully or otherwise). Only successful filing of a trademark provides you with a reasonable assurance that you aren’t stepping on anybody else's toes, and also deters people from stepping on your toes in the future once you are making money (it is a universal truth that once you are making money, everybody wants to copy you, and it costs money to stop them).
Back to logos. For some businesses, their logo is their strongest identifier of their goods and services. For example, Ralph Lauren squeezes an extra 30% out of you just for having a certain silhouetted man, horse and stylized stick emblazoned on your clothing. For Ralph's company, this logo is a huge component of the value associated with the business. If this is true for you, refer to that bolded statement above and read no further. However, for the vast majority of businesses, the business's strongest identifier (and prospective trademark) is not a logo, but rather the name of the business.
So, assuming your company name or something else is your strongest identifier, when should you trademark your logo? I'll give you two scenarios...
1) Your company (or product/service) name is considered "descriptive" of the goods and services you offer.
Descriptive trademarks offer very limited protection and are difficult to register. Thus, competitors have a bit more leverage copying these trademarks. However, many logos of companies with descriptive names that contain that name can be registered. Why? Because when you trademark a logo, you are claiming exclusive rights to the graphical presentation of that logo, rather than exclusive rights to the words embedded in the logo. Of course, this is not inherently positive if you are trying to protect the words, but the critical thing to remember is that the embedded words will show up in a trademark search by others looking to claim rights to them later. Thus, anyone in the future who wants to protect these same words and who does a reasonably diligent search will be made aware of your existence. This will serve as a significant deterrent, potentially saving you (and them) lots of money fighting for the rights to these words in court.
2) Your logo is distinctive and attractive and an important component of your branding strategy.
This seems somewhat obvious, but if you believe a logo will have value branding your business, you shouldn't play Russian roulette with it! If you are going to invest in people associating that logo what you are selling, you should know whether it is legitimately distinctive (and not infringing upon existing logos). You should spend a bit of money up front validating its distinctiveness and deterring and discouraging future copycats. This is a personal decision for logos, much more subjective than the decision to trademark your company name or product name.
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Danny Bronski is an attorney licensed in WA and NY with a legal practice that includes trademark law.
Please Contact VeriTrademark for more information on registering your trademarks.
This article is copyrighted and is not intended to serve as legal advice, but rather as a general approach to the law at the time the article was written (in 2006).
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