Trademarks

Every day consumers look for the names of products or services. From a legal standpoint these names are called trademarks. Trademarks originate from the medieval custom of guild members affixing their mark to the goods they made and to evidence that the product was made by a member of a craftsman's guild.

Today, a trademark indicates that a product or service is from a particular manufacturer or source. When a business starts using a distinctive mark or name for its products it begins acquiring an interest in that name by the mere usage of the name. It is not necessary to register the trademark to have an ownership interest. However, if someone else is using the same or a similar trademark in some other part of the country there may be confusion.

In order to prevent this problem from occurring, i.e. the use of the same name for products or services from different sources, the U.S. Congress passed the Lanham Act in 1946, which provides for a national system of registration of trademarks. The purpose of the act is to protect the public from confusion as well as to protect the trademark owner from losing his market share.

In registering a trademark, it is first prudent to run a trademark search to ensure that no one else is using the mark, regardless of whether or not it is registered. After the search is completed and it is determined that no one else is using the mark, or one that is substantially similar, an application for registration of the trademark or an intent to use application is filed with the U.S. Patent and Trademark Office.

If a trademark is already in use and registered with the Patent and Trademark Office, then anyone who subsequently uses the mark is on notice of the claim of ownership and is subject to a suit for treble damages, profits, attorney's fees, and court costs. Some very large manufacturers have had to pay millions of dollars to the "small guys" for ignoring the prior use of a trademark.

For example, The Quaker Oats Co. embarked on an advertising campaign promoting Gatorade as "Thirst-Aid." However, another company was already using "Thirst-Aid" as a trademark. The trial court enter judgment against The Quaker Oats Co. for forty two million dollars which was later reduced to twenty six million dollars. In addition the trial court entered an injunction preventing The Quaker Oats Co. from using "Thirst-Aid," a slogan it had promoted heavily on TV. If Quaker Oats had conducted a thorough trademark search before it started using the slogan, it would have saved itself a bundle.

The owner of a mark can lose its ownership of the trademark if it fails to protect its rights. For example "aspirin" was originally a trademark of Bayer and a distinct brand name. However, other manufacturers started making the same product and calling it "aspirin." Bayer did not take action soon enough to protect its trademark and lost the ownership of the trademark "aspirin." Another example is the word "cellophane," which was originally a trademark of Dupont. When other manufacturers started making a similar product and calling it "cellophane," Dupont did not act to protect its ownership of the trademark. Now "cellophane," like "aspirin," is found in the dictionary describing a particular type of product, not a particular brand of product. Since a trademark can be lost if not protected, businesses like Coca-Cola, McDonald's, Xerox, and Holiday Inns regularly file suit against companies that try to use their names or similar names.

A business' trademark is often one of its most valuable assets. In order to receive maximum legal protection the mark should be properly registered. However, even after a business develops goodwill in the mark and registers the mark, the value of its intellectual property can be lost or diluted if not properly protected.