TRADEMARKS: the basics

In the latest of articles from our freelancers on certain areas of law, and following our articles on intellectual property and copyright, this article looks at the basics of trademarks and includes some helpful tips to think about.

As always, it is worth restating that HPLpro is not a legal firm (we supply freelance in-house lawyers), and this article should not be taken as legal advice. It is important for you and your business to have experienced legal practitioners review your business ideas and intellectual property portfolio to ensure that they adequately meet your needs. Please feel free to request a freelance in-house lawyer from us if required. All of the trademarks used in this article are used without permission, no challenge to their status intended.

Trademark basics

Trademarks are a form of intellectual property. Intellectual property (aka IP) rights are rights that exist in ideas that have been given substance in the real world; ideas on their own are not intellectual property. This article looks at trademarks but you will have also heard of other types, such as copyright, patents, design rights and so on. See our articles on intellectual property and copyright for further information. Trademarks can be owned by individuals and companies and can be transferred from person to person or company to company; you do not need to be the creator of the trademark to be the owner. Trademarks can also be licensed from one party to another so, in certain circumstances, you can use someone else's trademark under a license agreement.
 
This article will focus on trademarks generally rather than in relation to specific country trademark law – it is always worthwhile engaging experts in the country you are doing business in to ensure that you are adequately protected.
 
Trademarks protect symbols, words and other identifiable features which are used in relation to trade. Normally a trademark will be a word or a logo but, as with all IP, in some territories worldwide you can also claim colours or sounds as trademarks. A trademark is therefore a logo, word or other element which identifies the source of that logo or mark for the economic benefit of the owner but also for the benefit of consumers at large; if everyone got to be able to use the word Microsoft in respect of computer programmes that they were selling, users would have no idea of the origin of that software. 
 
The purpose of the trademark is therefore twofold: as economic protection for a trademark owner and as a signpost of origin for a consumer.

Top tip #1 – When creating a new brand or a new product, or even if you are setting up a new company and you are considering the company name, it is absolutely worth checking whether someone else has registered that mark, or a similar mark, by doing a trademark search. You can do this either by engaging an expert such as a lawyer to do the search for you, or you can do it yourself online, normally by accessing the relevant government department website for your country (although given that there can be an element of complexity to some marks, we would always encourage you to go to an expert). For example, in the UK, you would use the UK Intellectual Property website. In the US, you would go to UPTSO, the United States Patent and Trademark Office. Doing such searches up front can save you time and money in the long run by avoiding potentially ruinous litigation.

Registered/non-registered trademarks

Trademarks can either be registered or unregistered depending upon the territory and the owner of the mark will have different remedies available depending upon the registration.

If the territory that you are doing business in recognises unregistered trademarks, you will start to get the benefit of upon starting trading with that mark. Most of the time, the more trading that you do, the more reputation the mark will build, and the stronger your claim of ownership will be – there are some complications which are outlined later in this article.

In respect of registrations, there is no global register of trademarks, but some countries do have collective registrations, such as the European Union. This means that you can register a trademark under the European system and get protection in all of the EU countries. Of course, registering comes with a cost and you can either register a mark through a lawyer or agent, or you can do it directly on the webpage for the relevant country registrar. In the US, a trademark registration typically costs between $200-400 per mark per class. In the UK it costs between £170-200 and then there is an additional but lower cost of £50 for additional classes for the same mark. Be aware that these costs can, and do, change. In addition, trademarks need to be renewed meaning that after every ten years or so (depending upon the territory) there is more cost.

In respect of what can actually be registered, this will change from territory to territory, but commonly, registrations will cover words, phrases and/or logos. In addition, as stated above, certain jurisdictions also permit colours and sounds to be registered although those registrations are not the easiest to obtain. See the section on restrictions below for what cannot be registered.

Recently, in the UK, Nestle were denied their application to register the above choclolate shape as a trademark (on account of it not being distinctive enough)

An unregistered trademark is denoted by the ™ symbol next to the mark, whereas a registered trademark is denoted by the ® symbol. Have a look at the above well-known examples.

Top Tip #2:
In Microsoft Word – and probably other word processing software - if you type in left bracket, the letters 'tm' and a right bracket, the character ™ will appear; and if you type in, left bracket, the letter 'r' and a right bracket, the character ® will appear

Trademark classes

Further, to complicate things slightly, trademarks exist in 'classes' which is a way of dividing those marks into categories of use. For example, Class 34 refers to tobacco and articles for smoking. That means that HPLpro could own a trademark for the word 'Cobra' in class 34 and that mark is not likely to infringe a 'Cobra' word trademark in class 39 – transport.
The Nice Classification (NCL), established by the Nice Agreement (1957), contains a list of the internationally recognised trademark classes (searchable on the World Intellectual Property Organisation webpage).
 
The process of trademark registration can take a while, particularly if any other individual or company objects to that registration. For example, if you try to register the trademark 'Red Bullock' in class 32 (Beer and Beverages) your application is likely to receive and objection by a certain manufacturer of energy drinks. As stated in toptip#1 if you have created a new product you should always perform a trademark search prior to releasing that product or registering a trademark.

Trademark strategy

If your company has a large trademark portfolio, costs can sometimes mount up very quickly. You should ask yourself, do you need to register everything? Unfortunately, when it comes to trademark strategy, many companies (and indeed lawyers) advocate the approach of registering everything that can be registered.

One of our freelancers has worked for a company where the approach was to register absolutely everything in every class they possibly could, which amounted to a portfolio of 3000 trademarks each in at least 4 classes. That is a very, very expensive endeavour. Registering a mark is fairly futile if you do not intend to protect that mark, which means that the costs of bringing trademark infringement claims also need to be considered in any IP strategy. Having an all-encompassing trademark registration strategy can be extremely costly.

Of course, sometimes it is necessary for certain business in certain industries to have such as wide approach and each business should certainly talk to a professional to assess their specific needs. Nevertheless, such a strategy should consider what is important for that business and register those marks in the classes that you will use. This exercise cannot be done in isolation, consideration should be given to the industry as a whole, competitor activity, as well as likely future trading activity. If you would like to engage a HPLpro freelancer to help you with you trademark and/or IP strategy do let us know.

We have Pepsi, would you like one?

Unlike other forms of IP, trademarks need to be maintained as they can be damaged by a trademark owner. Trademarks, if misused, can actually bring about their own downfall. For example, if a trademark becomes generic it can actually be challenged. I am sure that we have all been in a restaurant and asked for a Coca Cola only to be met with, "we have Pepsi, would you like one?" (or vice versa).

Such a question is asked to ensure that trademarks maintain their distinctiveness. Some people suggest that having a mark that is so powerful it is used in relation to products that are not your own is a positive thing for a business – they argure that it means that the business 'owns' the space for that product. Nevertheless, the issue becomes of vital importance when a business with a generic trademark attempts to stop a third party from using it commercially – they may not be able to. Indeed, their own mark may be found to be invalid for lack of distinctiveness.
 
Thermos, Kleenex, and Hoover are all examples of genericized trademarks.
 
Of course, the most powerful trademark at present that is arguably at risk of becoming generic is Google. Googling anyone? Whenever somebody says 'google it,' to you do you only use the Google search engine or do you use any search engine available?

To ensure that your marks maintain their distinctiveness, even when they become globally popular, you must ensure that you always use your trademarks consistently, educate your customers the correct way to use the marks through your marketing (rather than reinforcing bad habits) and always challenge misuse of those marks. Also, avoiding the use of the mark as a verb will help (such as Hoovering or Googling). Finally, using the mark adjacent to the generic type of goods or service will likewise assist in prevention of genericization: for example, Burger King burgers, Sprite soft drink, Bud Light beer.

When thinking up names for new brands and the like there are three main schools of thought: use a name which indicates to customers what the brand could be (e.g. Pizza Hut); use a name which is a real word but normally used in a different context (e.g. Apple) and think up a completely new word (e.g. Google). It is perhaps not a coincidence that many of the strongest global marks take the latter approach. Any marks that come in the first category are going to have a hard time proving that they are distinctive enough to be registered (see below).

Restrictions

Be aware that there will be some things that you cannot trademark and this list of restrictions will differ depending upon what territory you are in. A trademark that has been registered can also been found to be invalid if it breaches such restrictions. You need to have a look at the website of the relevant registrar or talk to an expert to find out what the restrictions are in in your jurisdiction.
 
Common restricted marks may include:

• marks which give the impression of government association or approval (or royal approval in the UK);
  
• Geographical locations –  although geographical locations are rarely owned by one business, nevertheless they can be exploited only by businesses operating in that area (Melton Mowbray pork pies, for example);
  
• generic/non-distinctive marks (see above);
  
• certain flags, emblems;
  
• marks which are too similar to other marks; and
  
• obscene marks.
  

 
We hope that you found the above useful. Let us know if you have any questions or if you have a need for part-time or temporary in-house legal support.
 
The HPLpro team