Intellectual Property (continued)
Before we dive into trademarks, let’s clear up some confusion. The terms “trade name” and “trademark” sound similar, but they are very different. A trade name is the company’s official name, the one you registered with the state. It is commonly known as a DBA, “Doing Business As.” A trade name in and of itself does not provide you with any legal protection or exclusive rights of usage.
A trademark, on the other hand, does offer legal protection. Think Coca-Cola. It is the name of the company and the name of one of its soft drinks. If you were to name a product or service Coca-Cola or Coke, you would receive a very curt cease and desist letter from Coke’s legal department since it is a registered trademark. A registered trademark has a ® symbol behind it. If the trademark is not officially registered and approved by the USPTO, it has a ™ instead. Unregistered service marks have an ℠ after it.
To make things a bit more confusing, companies, products and services may have the same name from time to time. For instance, there’s Pandora, the jewelry company, and Pandora, the music streaming service. This may seem to contradict the Coke example, but these two entities are in vastly different industries, so there’s no cause to believe a consumer would confuse one with the other when making a purchasing decision.
Having a registered trademark from the federal government offers you protections that a state-level registration cannot. It allows you to bring legal action against another company that is using your registered mark. For instance, if you discover a business is using your federal registered mark in another state, you can send them a cease and desist letter or file legal action against them. They may be allowed to keep using that name within the borders of their state, but beyond those borders, you control the rights to the name in most cases.
Introduction: Are You Ready?
1. Thinking Like a Business
2. Business Structures
3. Access to Capital
4. Creating Revenue Streams
6. Finding Customers
8. Creating a Winning Pitch
9. Effective Negotiation
10. Intellectual Property
11. Managing Your Money
12. Going Global
A trademark can be registered by you or an intellectual property attorney. Some companies offer this service as well. You can do an initial search in TESS, the Trademark Electronic Search System.
So, what can be trademarked?
Letters and words, logos, pictures, combinations of words and logos, slogans, colors, product shapes and sounds can all be trademarked. For example, the distinctive pink of Owens-Corning’s insulation is trademarked as is NBC’s three-tone chime.
There are trademark rights that are also common law, existing beyond those protected in statute. This provides you some protection of your mark within your own state’s borders, even if someone else had it registered in another state. Unless they had a federal registration, of course.
Because a federally registered trademark is national in scope, it has certain benefits, including the ability to recover damages for infringement as well as attorney fees. You are granted the right to use the ® symbol, clearly demonstrating ownership and ease of discovery in searches, preventing others from using similar marks.
The fourth type of intellectual property concerns trade secrets, which protects information such as a formula, pattern, compilation, program, device, method, technique or service. A trade secret has two main characteristics: It is information that has reasonable measures in place to protect or restrict access, and it derives its economic value from not being disclosed to competitors or the public.
Coca-Cola’s soda formula, McDonald’s’ special sauce and Google’s search algorithm are all examples of proprietary information that is central to a company’s competitive advantage and its very survival.
Nearly every business has trade secrets in one form or another. Examples are customer lists, manufacturing processes, software code and strategic plans. Most of these aren’t truly trade secrets since extraneous measures have never been put in place to protect the information. Plus, a lot of this information can be reverse-engineered, and once it is, it ceases to be a trade secret.
Reasonable measures to protect a trade secret can include technological or physical safeguards or legal mechanisms such as non-disclosure agreements and work-for-hire and non-compete clauses. Another method is to restrict access to certain parts of a facility where proprietary information is stored or the use of keycards and passcodes. Digital safeguards may include firewalls, two-factor authentication and encryption.
These measures help demonstrate that the information is indeed a trade secret should litigation occur. Unlike patents, trade secrets protections can continue indefinitely, until the secret is revealed or reverse engineered.