- Selecting a trade name or trademark without investigating whether that name or mark has source-indicating significance that can distinguish their company from others
- Not investigating whether the name or mark is available for adoption and use
- Not investigating whether a trademark is potentially available for federal registration
- Companies do not investigate their chosen trade name or trademark
Descriptive terms whose primary meaning has some direct connection to the product or service may not function well or even at all to distinguish your company from a competitor. It can take years to establish source-indicating significance in a descriptive term, also called secondary meaning and popularly termed “brand awareness,” so that it can develop value. For a new company wanting to establish itself, it is better to do your homework and consider terms that have marketing appeal and are arbitrary or fanciful or at most suggestive of some characteristic of the goods or services and require some imagination to make the connection to the product or service. Terms such as these can develop goodwill, which is to say they have monetary value as intangible assets and indicate how much customers are attracted to a company.
For a practical example, consider the word “shell.” “Shell” has tremendous source-indicating significance for automotive fuels and commands considerable customer loyalty, but is otherwise at most suggestive of fossil shells in rock formations whose size and distribution indicate that oil may be present. On the other hand, the term “shell” used in connection with the object itself, say a shell sold in a gift shop at a seaside resort, merely describes the product being sold without any source-indicating significance whatsoever, and is useless as a brand.
Even conscientious companies tend to select trade names and trademarks that are somewhat descriptive of some aspect of their goods or services. It’s a natural tendency. If you could establish distinctiveness in the common name, or merely descriptive characteristics of your product or service, you could own the world. But you can’t do that. You can’t stop others from describing their product or service. Therefore, it is best to do your homework and find a name or mark that is distinct and somewhat expressive of your product or service.
- They do not investigate whether the name or mark is available for adoption and use.
Another problem a small company may encounter, even if it selects a mark that is inherently distinctive, is that it has not comprehensively investigated marks used by others and obtained a legal clearance opinion. As unique as we each are, we tend to choose similar trademarks and trade names. Only a well-reasoned clearance opinion based on a comprehensive search can analyze the use of a mark in its marketing context to determine whether other marks are in conflict. Well-reasoned clearance opinions of IP counsel can reduce the cost of trademark ownership and maintenance dramatically and can reduce or limit the amount of damages in the event of a future infringement problem.
- They do not check to see if a trademark is potentially available for federal registration.
Even if you elect not to apply for federal registration, you will encounter problems if the legal clearance work is not completed up front. Selecting a mark in the absence of a legal clearance opinion is like flying blind. If others object or your mark is easily confused with those of others, websites may need to be altered and advertising materials pulled and recast. Expenses mount.
The small amount spent clearing a mark for adoption and use pales in comparison to the cost of rebuilding websites, reprinting labels and tags, and establishing entirely new marketing materials, not to mention lost good will and re-education of the consumer. In fact, a good legal opinion can also point out potential problems in business expansion. The legal analysis of the trademark search report may indicate what description of the goods and services is likely to succeed and what design may be useful in establishing distinctiveness. This could increase the likelihood of registration.
Set up a meeting with an IP attorney
You don’t have to register a trademark, but it is highly beneficial to do so. A national trademark registration can serve, among other things, as evidence of distinctiveness and as evidence of the registrant’s exclusive right to use the mark. A trademark registration provides nationwide notice of your claim to ownership.
Trademarks and trade names can be powerful tools that have considerable monetary value in themselves signifying customer loyalty and assisting the consumer in distinguishing the goods and services of one company from those of another. Taking full advantage of these valuable benefits and avoiding the potential for loss or liability requires some upfront work that is best accomplished by working with qualified IP legal counsel.
Contact Pedigo Law to learn more about our qualified IP legal counsel.