Trademark Registrations Are Important, but Not the Way Many Markholders Think
In my high school “health and guidance” class, I was taught that you can’t sober up a drunk with coffee. All you get, I was told, was a wide-awake drunk. Although now stimulated, the guy’s motor skills were just as impaired as before. I don’t know if that’s still the received wisdom—this was the 1980’s, after all—but it’s a lesson I took to heart. Coffee doesn’t sober up a drunk, and lipstick doesn’t make a pig pretty.
And a registration[ref]By “registration” I mean “U.S. trademark registrations.” State trademark registrations are usually not worthwhile.[/ref] doesn’t make a trademark strong. If you manage to register a weak trademark, all you get is a registered weak trademark. Trademark registrations don’t generate trademarks out of thin air.[ref]This surprises many. After all, patents must be issued by the government, so why not trademarks? But trademark is actually a very old species of unfair competition: using someone else’s brand to confuse consumers into buying your products instead.[/ref] They make already-existing trademarks stronger. They are force multipliers. If your trademark is strong, then a registration will make it considerably stronger. But just as multiplying a tiny number still results in another (slightly larger) tiny number, a registration doesn’t add that much to weak trademarks.
The Brawny Poetry of Trademarks
What makes a trademark strong, if not registration? Trademark strength has two ingredients, and you (the trademark owner) control both of them: inherent distinctiveness and goodwill. Goodwill arises from consumers’ recognition of your trademark as a sign of a certain quality in your products. You create goodwill by using the trademark in commerce: in your advertisements, on your packaging, and so forth. The trademark doesn’t have to inspire uniformly good feelings. McDONALDS doesn’t mean especially good hamburgers, but it does mean you can eat decent hamburgers for little money in a clean, safe environment (and, if the commercials are to be believed, that you will become a cooler person for eating the food, somehow).
Inherent distinctiveness measures how different the term is from other terms used to describe the product you wish to associate with the term. The more unusual the term is, the more inherently distinctive it is:
- If the term is just the word for the class of products—e.g., APPLE branded apples—then the term is “generic” and can never serve as a trademark for those products. To do so would be to give you a monopoly over the normal usage of a word.
- If the term just describes[ref]This includes common surnames and geographic designations—e.g., SANDERS or NASHVILLE branded legal services—as well as misdescriptive terms, i.e., terms that could describe your products but aren’t accurate.[/ref] your products—e.g., CRISP branded apples or POWER branded computers—the term will not serve as a trademark unless and until you can prove that a significant portion of the consuming public actually draws the commercial connection between the term and the quality of the product. This is really, really hard and expensive to do. It takes years and years of concerted effort, and usually only the largest companies can muster the time and effort (and the legal expenses).
- If the term is related to, but does more than merely describe, some feature of your product—e.g., LIGHTNING branded computers—the term will serve as a trademark right out of the box, though it’ll be regarded as a little weak. These marks are known in the business as “suggestive,” but not for the reason you think.[ref]The line between descriptive and suggestive marks is difficult to articulate, in the same way a metaphorical use of a word can slide into a everyday usage.[/ref]
- If the term is non-sensical—e.g., ERKOL branded apples or computers[ref]The most famous example of this type of trademark is KODAK branded cameras[/ref]—or is a real word but misapplied to the product—e.g., APPLE branded computers, or COMPUTER branded apples—then the term not only serves as a trademark but will be regarded as a strong one. These are regarded a “fanciful” and “arbitrary” marks.
I’ve noticed that this is counterintuitive for many in business. The normal instinct is to try to “trademark” a fairly common word and thereby gain a monopoly over its use. In other words, the instinct is to grab (a positive) meaning that is already in wide use, to avoid doing the hard work of giving the trademark (positive) meaning. But, as you can see, the law resists such monopolies. It will not let trademarks alter or affect normal language.
The truth is creating strong trademarks takes hard work and a creative eye. “Suggestive” marks are the best balance of pre-existing meaning and strength, at least in the near term, but they must be selected with care. You need a poetic ear, and it’s easy to choose one that’s too descriptive. Long-term, fanciful and arbitrary marks have the most upside, but it still takes some thought to come up with good ones.[ref]Making matters worse: you’ll want to come up with multiple potential trademarks, because it’s a safe bet that at least one of your ideas will already have been done, and you’ll be forced to drop it when it isn’t “cleared.” Great minds think alike, alas, and you aren’t always the first.[/ref] There’s a wide gulf between KODAK (for cameras) and, say, GURGLAMPH. Or between APPLE for computers and, say, BANANA JR.[ref]“Yuck. The Fritos are antiquated.” I did mention something about the 1980’s previously, right?[/ref].
But even after that, you have to use the trademarks, intelligently and persistently, in a way that generates that “goodwill” in consumers’ minds. The good news is: if you’re business, you’ll be doing that anyway. The trick is to make sure that your brands—inherently distinctive trademarks—form a prominent part of your marketing.
Trademark Registration as Force Multiplier
So if you’re doing all the hard work in bulking up your trademark, what do you need registration for? Lots of things!
- The certificate of registration is sufficient proof of validity.[ref]It can still be rebutted, but the burden is on the defendant.[/ref] Proving validity of a trademark is expensive and can be tricky. Why not just attach an authenticated copy of the certificate to your complaint and say, “There, done!”?
- The certificate of registration is also sufficient proof of ownership[ref]Again, this presumption can be rebutted, but the burden is again on the defendant.[/ref] When ownership issues arise, they can be devilish to deal with, in part because a trademark can have many “parents”, each with a (real or imagined) claim on ownership. Also, transferring ownership of a trademark is fraught—just fraught.
- Registration gives your trademark effective national coverage.[ref]The truth is more complicated, which explains the “effective” modifier. The owner of a registration may force out “junior” users of the trademark once the registrant fixes on expanding to the junior users’ territories, but not before. The registrant also can’t force out senior users who didn’t register their trademark, but those users’ territories become “frozen,” i.e., they can’t expand further. This is why there is a Burger King restaurant in Mantoon, Illinois, that has nothing to do with the national franchise.[/ref] This is, for many, the big one. Normally, a trademark’s effectiveness is limited to the geographic market. It’s possible for there to be several owners of the same trademark in different parts of the country, which can be awkward! For example, what if one of you wants to expand into another’s territory? Registration establishes the rules for how those conflicts will be resolved, with a tremendous advantage for the registrant.
Despite all of these advantages, a registration doesn’t make your mark inherently any stronger, just a lot easier to enforce. Recently, some trademark owners have discovered to their cost that trademark registration is no substitution for trademark strength.
But, but they were registered!
In American Consumer Credit Counseling, Inc. v. American Consumer Credit, LLC, the plaintiff owner of the registered trademark AMERICAN CONSUMER CREDIT COUNSELING, for “credit and debt inquiry and consultation services…”[ref]“…debt and credit counseling; debt repayment planning and scheduling; debt consolidation services; educational services, namely conducting seminars, workshops, and individual instruction in the field of credit, debt, and money management.”[/ref] sought to stop the defendant from using AMERICAN CONSUMER CREDIT for timeshare consultation services (“course of action for cancelling undesirable timeshare contracts”[ref]Isn’t the “undesirable” in that description redundant?[/ref] Plaintiff moved for a preliminary injunction, i.e., a court order forbidding defendant from using AMERICAN CONSUMER CREDIT while the case is pending. The court denied the motion, in large part because AMERICAN CONSUMER CREDIT COUNSELING is an incredibly weak mark. Although the plaintiff proved that it used the mark for 20 years and spent millions of dollars in advertising, many competitor use the phrase or something similar. Because of course they did: if you’re providing consumer credit counseling in America, you’re pretty likely to hit upon the phrase “American consumer credit counseling” because that succinctly describes what you do. And descriptive marks just aren’t very strong. As the court concluded, “And while Plaintiff has established valid, incontestable trademarks, the evidence does not suggest that the marks are strong.”
In Progressive Distribution Services, Inc. v. United Parcel Service, Inc.,, Plaintiff was the owner of the registered trademark ORDERLINK for web-based delivery services[ref]The actual registration is for “order fulfillment services,” but that’s not mentioned in the opinion.[/ref] UPS is—well, you know who UPS is. It was using ORDERLINK for new services it was offering “to facilitate the shipping of orders from eBay and Amazon.” After UPS’s attempt to register ORDERLINK was slapped down by the USPTO because of the Plaintiff’s registration, the Plaintiff sued UPS for trademark infringement. UPS moved for summary judgment[ref]Summary judgment is a judgment without the involvement of a jury (or other factfinder) but may be granted only if the available evidence shows there is can be no genuine dispute about any of the facts necessary for a claim (or defense).[/ref], and the court granted. On appeal, the Sixth Circuit affirmed. The claim failed in a large part because ORDERLINK describes what it does: it processes orders through web links. Unsurprisingly, lots of competitors use the same term for similar services.
In Grayson O. Co. v. Agadir Int’l LLC, the plaintiff sought to enforce its registered trademark F 450 for hair-care products, against defendant, which was selling hair-care products called “Hair Shield 450° Plus.” In both cases, the “450” is the most prominent feature of the mark. Why 450? That’s the temperature at which human hair tends to melt (apparently). The idea is that these products protect against damages even at this temperature. This is well-known in the industry, and there are a number of products whose brands incorporate “450” in their names and descriptions.
On the defendant’s motion for summary judgment, the trial court dismissed the claim for trademark infringement, in large part because F 450 was weak in light of the meaning of “450” in the hair-care industry. This was so even though the court found F 450 to be “suggestive,” not merely descriptive. The Fourth Circuit affirmed. It didn’t help that the plaintiff didn’t do much with the F 450 mark other than use it on product packaging. As I said, building strength takes work (but F 450 was probably never stood a chance).
Some Mistakes Are Too Much to Overcome (and Cannot Easily Be Fixed)
In each of theses cases, the trademark owners were doomed from the start: the trademarks they chose to build their businesses were conceptually weak. One way you could tell is that their marks were used by competitors, not because they were copycats but because the marks were, in one way or another, part of ordinary language. If lots of people come up with the same way of describing something, the trademark just can’t be very strong because it isn’t very distinctive. In the case of ORDERLINK and F 450, it’s possible that lots and lots of commercial use might have salvaged the case, but those companies were too small to have those kinds of resources. In the case of AMERICAN CONSUMER CREDIT COUNSELING, I don’t think any amount of commercial use would have saved the case—the mark is just too descriptive.
Weak trademarks are still valid trademarks, but their effectiveness is severely impaired. They protect against only nearly identical uses of the trademark. For example, not only does the alleged infringer have to use the same mark, but it must also share other qualities, like color, font and so forth; and there can’t be any other distinguishing features (such as a “house mark”). And the products must be nearly identical.
Registrations are worthwhile and are an important part of your marketing strategy, but they are not a substitute for a good trademark.
Thanks for reading!