You bolted up in bed at 3 a.m. last night and grabbed the notepad on your dresser that you keep for just these kinds of occasions, do scribble down the absolutely genius, brilliant, one-of-a-kind, bet-the-company, ineffable NAME that just popped into your head for your new business. The new business idea came to you a couple weeks ago, but you haven’t really done anything else yet because you just couldn’t come up with a name. And now you have it, and it’s perfect.
So how do you protect it?
The sensible instinct is to file an application for trademark protection as soon as possible, to stop anyone else from stealing your name and using it. But we got reminded again today by the Trademark Trial and Appeal Board that applying for trademark registration actually isn’t the first thing you should do.
Trademark rights, which are design to prevent your consumers from being confused by brand names that are too similar, are created when the mark you’ve conceived actually gets used in public. In 1989, Congress added Section 1051(b) to Title 15 of the U.S. Code, changing the law so that trademark applications could be filed before actual use began, but still not before the applicant had a bona fide intent to use the mark. In other words, you can’t just put in a trademark application as a placeholder to reserve a name or keep anybody else from using it.
In the case of PRL USA Holdings v. Rich C. Young at the Trademark Trial and Appeal Board (TTAB) yesterday, Mr. Young lost the case on summary judgment (a very early stage in the proceedings), because he could not produce any documentation showing a plan for use of the marks. He wouldn’t have had to show the mark actually used on the t-shirts he wanted to sell, for example, but he at least had to produce evidence that his intent was real. The TTAB has held before that if an applicant can’t prove “the capacity to produce the goods,” that the intent to use the mark was not real. Mr. Young could not prove this capacity, and found himself with a cancelled trademark application and his filing fees (and hefty legal fees) down the drain.
So what does this mean, practically? It means that the trademark application for a brand name for a new business concept probably shouldn’t be Step One. Document the plan, make relationships with distributors or manufacturers, do some light marketing. Enough to show the Trademark Office that your intent to use the mark is real and bona fide.