The hidden complexity of trademarks

Registered Trademark
Registered Trademark

Trademarks help protect providers of products and services from unfair competition. For example, assume the company “A” sells a product or service under a first brand. Business competitor company “B” is free to sell a competing product or service under a completely different brand. But if company B uses a brand calculated to confuse the company “A” customers into accidentally buying from company “B,” this is unfair competition. 

Four general rules:

There are four essential principles of trademark law. These are 1) “avoid confusion with existing marks”; 2) “don’t try to claim the normal marks (names) of a product or service”; 3) “a trademark only has meaning in the context of a particular class of product or service”; and 4) “use it or lose it.”

Try to be either distinctive or suggestive:

The USPTO will reject marks that too closely resemble the common name or logo of a product or service as being “generic.” But trademarks or names that are “fanciful,” — that have no obvious correlation to a product or service will often be accepted and registered. “Suggestive” marks are also allowed. But if you describe the product or service too closely, watch out. The USPTO examiner may deem these marks to be “descriptive.” To get a descriptive mark allowed, you have to agree to first register it on the USPTO “secondary register” for five years.  During this time, it is difficult to enforce the mark. But, after five years of use in trade, absent objection by outsiders, you can then file to upgrade your “seasoned” descriptive mark to full trademark status on the “primary register.”  

Commercial context:

Note that the word “Trademark” contains “trade.” But trade in what? Under both US and international law, trademark offices try to cram all products and services into a limited number of different classes. Recycling the same names within a class is generally not tolerated. However, you can often reuse the same names for other products or services in other classes. The USPTO usually examines the submissions on a per-class basis. But they occasionally do cross-check between classes if they think the possibility of confusion is high. 

You have a limited time to prove commercial use:

The USPTO grants trademarks on a “use it or lose it” basis. It is possible to reserve some names for up to a few years on an “intent to use” filing. But ultimately, to get the trademark, you need to provide proof that you are using the mark in commerce by submitting a “specimen.” This specimen is often a photograph of sales receipts, website purchase pages, and the like. They require photos under the theory that pictures provide better proof that you are using the trademark name in real trade. These days, the USPTO examiners will also flag specimens that they think are too manipulated. 

Other tricky areas:

There are many other complexities of trademark law as well. Searches can be tricky because the underlying legal standard for trademark infringement is “the possibility of confusion.” Don’t be confused and think that the criteria are “the same spelling.” It is not, and trying to use an alternate spelling of a previously registered mark can get you in trouble.

Unregistered common law trademarks are another potential problem.  Further, a trademark must only function as a source indicator. It can’t otherwise impact the utility of the product. 

Thus merely avoiding other registered trademarks with identical spelling is often not enough. Alternative spellings, word prefixes, word suffixes, different name variations, and common-law use can often cause problems if potential customers might be confused.

International Trademarks: Madrid Protocol

Madrid Protocol countries
Madrid Protocol countries (US color or darker is “in”)

For US companies, the Madrid Protocol can be a low-cost and time-efficient way of getting international trademark protection.

The internet makes it almost trivial to sell products and services internationally.  But how do you manage the IP for these products and services? The legal system has been lagging here. Although the 1970’s (pre-internet) PCT system simplifies the process of filing international patents, the underlying international patent system still remains cumbersome and expensive.  In the end, you still have to hire local law firms in each country and work with the local patent offices.

What is the situation in trademarks?  Almost reasonable!  This is because, in the early post-internet era, the international trademark system got a major upgrade, called the Madrid Protocol. So if you are a startup wanting to protect your trademark rights internationally, the Madrid Protocol is a reasonable and cost-effective way to do so.

The Madrid Protocol is a 1996-era refinement of an earlier 1891 Madrid trademark agreement.  The US and over 90 other countries (EU included) are presently members (see the darker countries on the world map). Brazil and Canada also recently joined in 2019.

The main advantage of the Madrid Protocol is that the applicant needs to only file once in the WIPO Madrid system in order to apply for trademark applications in a variety of different countries (such as the entire European Union at a single time).  The application fees, at least by patent standards, are reasonable (e.g. about $1600 to apply for full EU coverage).  This system minimizes the hassles and expense of hiring local law firms and dealing with local trademark offices in each country.

There are a few catches – the applicant must be associated with a Madrid subscribing country.  You can’t start from scratch – rather you should have at least one national trademark application pending (and preferably issued), to form the basis of your Madrid application.  US applicants, for example, can use their pre-existing US trademark to file for Madrid coverage through the USPTO. The USPTO will check this Madrid application, and then forward it to the WIPO office in Geneva, Switzerland.

Some other cautions — in the event that your original national trademark application fails within the first five years after filing, your other Madrid filings will likely also fail. Additionally, the various local countries that you designate do have the right to refuse your trademark on an individual basis within the first 12-18 months after filing.

So additional research before filing is recommended.  At a minimum, check the WIPO trademark database for conflicts within your trademark class. Check if your US trademarks might be “generic” or otherwise inappropriate in your Madrid target countries.  Madrid Protocol filings must be renewed every 10 years, so remember to put this on your long-term calendar as well.