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How Small Businesses Can Make Their (Trade)Mark: A Conversation with Trademark Atty, Suzy Fulton

Welcome back to “Meet the Bincubators,” a series in which we interview notable professionals who are helping entrepreneurs and businesses to grow and succeed.

Today we are tackling a topic that can confuse and overwhelm even the savviest of small business owners who are working to build their brand: trademark law. To help break down some of these complicated issues for us in a friendly way, we spoke with attorney Suzy Fulton (pictured left). Suzy is a co-founder of the innovative law firm of Fulton Jeang, PLLC, which is certified as a women-owned business through the WBENC. She previously served as VP, Operations and General Counsel of Appspace, Inc., an international, enterprise business communication technology company, and the General Counsel for SoftLayer Technologies, Inc., which at the time was the largest private hosting company in the world until it was purchased by IBM in 2013 (after her departure from SoftLayer).

Suzy, thanks so much for talking to me today. We're going to focus, in a general way (see disclaimer below), on trademarks—and not copyrights or patents. But, before we jump in, for purposes of setting the stage, I thought this chart, from the U.S. Patent and Trademark Office (USPTO) website, might be helpful:

Chart describing differences between trademark, patent and copyright law

* Source: United States Patent and Trademark Office, Trademark Basics

Briefly, what does a trademark protect exactly (scope)? And what was it created to protect against?

It protects you from having others use your mark in a way that is likely to confuse as to the source. It also protects consumers or the public from being confused and wondering whether a similar mark relates to your goods and services. This “likelihood of confusion” is the standard used by the USPTO when considering registration of trademark applications and by the courts when considering infringement.

When picking a name that you want to be identified with your brand, what factors make a strong mark likely to qualify for trademark protection? Conversely, what factors might lead the Trademark Office to decline to offer you protection for your mark?

There are five different categories for classifying trademarks. The weakest one is a mark that is “generic,” meaning that it is the common word for the goods or services that you are trying to sell, for example the mark CANDLES if you are trying to sell candles, or DOG TOYS if you sell dog toys. You cannot get a trademark on a generic word because the USPTO won’t let you take basic words, which other people need to use, out of common usage and prevent others from using them by obtaining a trademark on the word. A generic mark can never be trademarked.

Next on the scale of categories of marks is one that is merely “descriptive”—for example, AMERICAN AIRLINES for a company that offers airline services in America or INTERNATIONAL BUSINESS MACHINES for a company that sells business machines internationally. A descriptive mark can be trademarked if you can show “distinctiveness,” which is what American Airlines and IBM were able to do. This has become more and more difficult but is not impossible.

A trademark that is “suggestive” is one, as the name implies, that suggests what the good or service is, and a suggestive mark may be trademarked. MICROSOFT is an example of a suggestive mark, where it suggests microcomputing software, but you have to exercise your imagination to get to this; it doesn’t directly describe the goods or services being sold.

An “arbitrary” mark is one that an actual word or phrase but is used on the goods and services being sold in a random or arbitrary manner. An example of an arbitrary mark is the APPLE mark, an apple is a fruit, but when used for computers or computing services, it becomes arbitrary.

Finally, a name that is “fanciful” is in the strongest category when determining a name that can be registered as a trademark. Fanciful mark are ones that have no meaning and are made up names. If you think about some of the strongest trademarks out there, like Exxon, McDonalds and Starbucks, the common thread is that these fanciful or arbitrary names have nothing to do with the things the companies are selling (although your marketing team may hate you because until your mark gains some fame and notoriety, it might be more difficult to sell your goods or services if people don’t immediately associate the mark with what you are selling).

Graphic depicting a general brand logo and tagline
Image by RoadLight from Pixabay

Do you have the automatic right to a trademark if you name your business after yourself?

Maybe, and the use of names can be tricky under trademark law. Names can be trademarked if they are associated with a business providing a good or service. For example, “Suzy Fulton Law” could be a trademark for my law practice. On the other hand, it might be very difficult to trademark only a surname like “Smith Law,” unless you have acquired distinctiveness because the USPTO cannot allow you to have a monopoly over all the other Smith lawyers out there to prevent them from using their name in association with their law firms.

In conjunction with picking a name, most business owners will immediately secure a corresponding URL from a domain name registry, and corresponding handles on their social media platforms. Some business owners might even formally register their business with the state, e.g., when forming an LLC. Is that enough to protect your brand? Or should they also always be registering a trademark?

It depends. Trademark law is incredibly complex and often requires a careful balancing of a number of factors, which an experienced lawyer can help you to do. The first thing to understand is that there’s a difference between filing your business name as a trademark with the Secretary of State of your state (which protects your business entity name in your state) and registering a trademark (which protects your business entity name, federally).

The next thing to understand is that, simply by using your mark for business purposes – via your website and your social media activity – you are showing “use” and accumulating certain common law trademark rights to that mark. In some instances, depending upon the nature and scope of your business (for example, something that doesn’t extend outside of your small town), that common law protection may be enough – and in fact, you would not be entitled to a federal trademark if you are not using it in interstate commerce, or in other words, across state lines.

In any event, obtaining a state or federal trademark registration does not ensure or mean that you are not accidentally infringing upon someone else’s brand, and it does not mean that you won’t be sued or receive a demand letter demanding that you cease and desist in using your mark. Thus before adopting and using a business name or a name for your products or services, there are a number of complex factors that need to be considered including potential infringement and whether to file a trademark, and if so, do you file a state or federal trademark, which are you entitled to file, etc.

And so, before falling in love with a name, and grabbing your domain name and social media handles, I strongly recommend that business owners at least speak to an attorney to see whether the name they love may be trademarked, and whether there are already other similar marks out there that could result in a likelihood of confusion and lead to a legal demand letter or infringement action. This can save small businesses a lot of grief—and money—in the end.

Can you talk a bit more about the factors that go into deciding whether a formal trademark registration is needed—if, for example, you’re just a local fruit stand in a small town somewhere?

Sure. You’re a local fruit stand, selling only in your rural small town under the name, let’s say, “Fruitiously Yummy”, just as your family has been doing for generations. To promote your business, you’ve been advertising in the local paper, for example, or printing it on your shopping bags—you will have already acquired some common law protections in your Fruitiously Yummy mark in your geographic area, even if you have never filed for trademark rights in your name.

Even if someone subsequently filed for federal trademark registration for that name, they likely couldn’t stop you from continuing to use it within a certain geographic range, based on your first use. But you would still need to hire a lawyer to resolve this, if they came after you with a letter demanding that you stop. And on the other hand, you might not have the right to go after someone using the same name across the country somewhere else.

One of the factors considered is how you are marketing, and to whom—where are those customers located. To qualify for a federal trademark registration, one factor required is that you need to be engaged in interstate commerce, by trying to market and sell your goods and services to people in other states.

If you’re not doing that, i.e., selling or marketing in interstate commerce, you may still be able to obtain a trademark registration with the Secretary of State of the relevant state(s) in which you are using your mark. Do you really need that if you’re only local and already have common law trademark protection? Again, it depends. With trademark law, there is always a weighing of various factors and risks, so I think it is worth at least having a discussion with someone who understands the factors and how they are likely to be applied, to help you come up with a brand protection strategy.

If I haven’t registered my trademark yet and I get a scary “cease and desist” letter, demanding I stop using my name, what do I do?

Well, first, take a deep breath. It is indeed scary, for a lay person, to get such a letter, but remember you could have gotten one even if you had registered your trademark. Having a trademark doesn’t necessarily mean that you can’t or won’t be sued. Receiving such a letter could be a bullying tactic, or the person/entity sending the cease and desist may have legitimate rights.

If you get a demand letter, yes, you are going to need to deal with it, ideally with an attorney, but don’t ignore it. Again, if you have “first use,” you’ll have certain rights, and maybe there is no likelihood of confusion with the other mark. It often becomes a negotiation with the other side. Depending on the circumstances, you might be able to turn the tables on the other party and demand that they stop using your mark.

Other times, you may need to stop using your mark, change your name, and redo your marketing materials. But, while unfortunate, costly and something you might have been able to avoid by researching your mark and consulting with legal counsel in advance, this is a situation where you and your attorney can take it step by step and work through the issues with the other party, and you will get through it.

Graphic depicting a general brand logo and tagline, with the example Vintage Original Brand
Image by RoadLight from Pixabay

What about logos? And tag lines? Are these things part of your basic name when it comes to trademark law? Do you have to register them all and if so, together or separately?

Again, like just about everything else in trademark law, it depends upon a number of factors, including budget. Your wordmark is one level of registration. If you have a logo and you always use your logo in conjunction with your name, you can register the combination, which protects them both. If you always use the logo, name and tagline together, you can register the three together. You may want to register each of these separately; however, and of course, the more registrations you file, the more it costs. Additionally, the Trademark Office not only charges for the number of marks or types of marks that you file, but it also charges for the number of “classes” that you file in. For example, if you want to use your trademark on computer software that you sell and also to identify your computer consulting company, these are two different classes. You can file your trademarks in stages based on your budget. This is another aspect of your practical trademark strategy, and it can be helpful to discuss with your attorney.

The USPTO website has an online Trademark Electronic Search System (TESS) database, which you can enter your proposed name into, to look for conflicts with already registered marks. Do you recommend people do such searches?

If you’re familiar with TESS, you can start there, sure. You can also search on Google, where you can find people/entities who might have common law rights and are using the mark, but who haven’t registered with the USPTO; however, they might have prior rights based on their first use even if their use does not prevent you from registering your mark.

But I would keep two important things in mind. First, there are companies that specialize in these broader searches and may have access to all sorts of other databases that the average person won’t be able to find in a Google search. And also with respect to the TESS search, it’s not just a matter of looking for a direct hit, not finding one, and deciding you’re home free. An experienced trademark attorney will also know what other things to look for, and most importantly what the USPTO will be looking for—things like words that are spelled differently but sound the same, for example. A great deal of analysis goes into a thorough trademark search and report, including the categories of goods and services involved. Google alone isn’t going to get you there and looking for a direct hit in a TESS search won’t cut it either.

Let’s continue on this DIY theme. Is it possible for people to register their TM themselves, to save money? The forms are available online, right?

The forms and instructions are online. But while you can register yourself, and many people do, you might be better off consulting with counsel from the start. Unless, that is, you are certain you know about all the disclaimers you will need to make, and the numerous other things an attorney would know that could prevent a rejection. Do you want the application to come back, refused for XYZ reasons that, had an attorney filed, they could have anticipated and avoided?

And even worse than filing the original application yourself is trying to respond to an Office Action, which is the response you get when your application gets rejected. At this point, you really need to hand the matter over to an attorney because it may still be fairly easy to overcome the rejection, relatively quickly and cheaply, and get your trademark, but you might not know what to do. Then if you also mess up your response to the Office Action because you do not know what you are doing, you might fail to get your mark registered when it would have been relatively simple to do so. And you won’t get your registration application fees back either.

There are many services out there—online filing companies that advertise TM registration services. What are your thoughts on those?

There are so many companies out there—not just in trademark, but in any area of your life—advertising a quick, cheaper fix. Are some legitimate? Maybe. But there are also many who don’t necessarily do things the right way or may not have your best interests at heart, or who are simply fraudulent.

In trademark law and life, I personally think it comes down to that adage: You get what you pay for. It may cost a little more to go to an attorney but that could be the difference between getting a registration or not.

Once you've decided to register your trademark, what is the process and how long does it take? What kinds of costs can a small business owner expect?

During COVID, the USPTO experienced a significant uptick in filings (both because of people starting new businesses, and a lot more fraudulent filings, often coming in from overseas). As a side note, the USPTO has gotten tough lately, trying to crack down on these fraudulent applications. While they are still a bit backlogged, they are doing a great job of hiring new examiners and tackling the applications. However, even given these efforts, I would say it still takes at least 6-8 months from filing an application to obtaining any response or Office Action from the Trademark Office. The sooner you get started, the sooner you’ll have your mark.

Once you get your mark, what is it that you've got exactly? What does it entitle you to? How long does it last? And then, is it "set and forget" or are there certain things you need to do to maintain it and protect it?

Trademarks are based on use, so to initially obtain protection for your trademark and to keep such protection, you must be using the mark and continue using it. And that’s another area where the USPTO is now working hard, to prevent fraudulent claims of use and abandoned filings and to clear the “deadwood” of marks that people are still holding onto, but not using.

There are also a number of specific declarations and other filing requirements that come up post registration—for example, between the 5th and 6th year of registration, you are required to file what’s known as a Declaration of Use (and you typically also simultaneously file a Declaration of Incontestability). Then every 9th and 10th year (and 19th and 20th, and so on), you’ll file the Declaration of Use and an Application for Renewal. Your attorney will be able to give you more information about these and assist you. But an important takeaway for small business purposes, just keep using your mark—on your website, on your packaging, when you are marketing your goods and services, and that will help you to keep your mark strong and entitled to trademark protection.

What's the difference between the TM and the Circle R symbols?

You can use the TM symbol if you are using your mark as a trademark, even if you haven’t yet registered it. In fact, this is a good idea, as it shows intent and puts others on notice. But again, you really need to be using the mark and not just throw it up to save your place (you may, however, be able to file an “intent-to-use” mark if you do have a bona fide intent to use a trademark). And then once you have a registration, you can use the ® symbol. Again, it helps to protect your mark by putting people on notice.

When working with a trademark attorney, do you need to work with someone locally, e.g., in your state?

No, not if you are filing a federal trademark. As trademark filings in the USPTO are a matter of federal law, you do not need to work with an attorney licensed in your state, but that would be advised if you are doing a state trademark filing.

The final question in this interview is a summary "Five Tips" takeaway. What would your final five tips be for small business owners and entrepreneurs to keep in mind, when it comes to thinking about trademark and protecting their brands and businesses?

Sure. When it comes to trademark law, small businesses may want to keep the following tips in mind.

1. Experience matters. In trademark law, there are not a lot of clear “yes” or “no” answers. Almost every aspect of trademark law comes down to an analysis and balancing of a number of factors and risks, to come up with a strategy and a rationale. And this analysis is typically best undertaken by someone who has trademark experience and knows both how the USPTO is likely to think and how it has responded to similar fact patterns.

2. A little bit of effort and money on the front end can save you considerable time, money and grief on the back end. You may be “in love” with a specific name, for sentimental or creative reasons. But, if you are eventually forced to change that name and redo all your materials (including website, social media accounts, signage, packaging, logo, etc.), because you never did a trademark search and it turns out your name already belongs to someone else, that love can quickly fade. Save yourself some heartbreak and money, up front, by picking a name that will love you back!

3. Trademarks are judged differently than people. If you were to call a person “arbitrary” or “fanciful,” these things likely wouldn’t be considered compliments or strengths. Conversely, the term “descriptive” would seem to imply that someone is wonderfully detail-oriented, careful, a strong speaker and writer. But in trademark law, the more descriptive the proposed mark, the less likely it is that the USPTO will let you register it and prevent others from using it for the same or similar products or services. The strongest trademarks are words that are made up or arbitrary and have nothing to do with the goods and services they are connected to. So go forth and be fanciful!

4. Use it or lose it. Perhaps the most important factor in federal trademark law, beyond likelihood of confusion, is to make sure that you are actually using the mark in interstate commerce—you can’t simply lock it up and sit on it and try to prevent others from using a mark when you aren’t. And this use continues to be just as important once you have been granted your registration as it is when you are proving your initial entitlement to a registration.

5. If you get a “cease and desist” letter demanding that you stop using your name, try not to panic. Yes, you will have to deal with it, and you should contact an attorney immediately. But you may have stronger rights than you know, and these things can often be resolved through negotiation. If it turns out that you are infringing, yes, you may have to change your name and redo all your branding and materials, which can be costly and frustrating. But if you take it step by step, with counsel, you will get through it.

This article is for informational purposes only and should not be considered legal advice. Each situation is different, could change any time, and should be analyzed by an attorney.



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