Avoid These Trademark Problems

Now that you have some background in the sorts of things that function as a trademark, here are some particular considerations in actually selecting a mark. One is foreign translations and this has two elements. One is if you choose to register a mark that is, in fact, a foreign word, the United States Trademark Office and indeed most trademark offices around the world will require that that word is translated and then it will decide whether, through that translation, the mark is simply descriptive. So let’s say I’m going to design a new kind of high-end cat food and I want it to sound fancy. So I have, perhaps a Parisian background, and I use the word, chat, C-H-A-T.

But chat merely means cat in French. So the trademark office would not give me trademark protection for the word chat because it means cat. You also want to avoid words that have a particular significance in an industry and that is because they’re going to likely be found to be descriptive, and competitors of yours and other companies in that industry need the ability to use that word to describe their products. You do not want to chose a mark that is primarily a geographic description. And again, it’s because other companies from that geographic region will be able to use that particular word.

Marks that are primarily a surname, or a last name cannot be registered unless you can prove that they have acquired secondary meaning. One of the most famous examples of this is McDonald’s. Indeed, the McDonald’s restaurant had to prove to the US Patent and Trademark Office that the name McDonald’s, though a surname, had acquired distinctiveness. And then there are, of course, what we call social considerations. And that is, will your choice of a mark signal something socially or culturally that you didn’t intend? One well-known example of this in the U.S.

was the decision by the company that makes Aunt Jemima pancakes, pancake mix, pancake syrup to change the character it had been using to identify its product and have that character be a much more updated, modern-looking women. And at the time that the Aunt Jemima company did this, the character was highly recognizable, and many people had a very affectionate feeling about the character. But indeed over time, the character of the African-American woman was viewed as insulting, as suggesting a plantation or even slave or servant role, and it was no longer an appropriate image for the company.

So even though, at that time, it was the second most trusted brand in the country, they updated their look and you can see the new character, Nancy Green, the individual who portrays Anna Robinson. This slide raises some of the potential trademark problems you can run into when you select a word or a logo or a mascot. First of all, you want to avoid choosing a mark that is too similar to your competitor’s. Not only will it be difficult to secure registration, you can be sued by your competitor. As we discussed earlier with my example of Chat, you want to avoid a mark that is merely a foreign translation of your product itself.

You want to avoid words that lend themselves to ridicule. Of course you will want to choose a mark that your target audience can actually pronounce, and spell, and remember, and refer to other people. Occasionally, companies try a little too hard to create a word, that when others look at it, they have no idea how to pronounce that particular word. You might decide as a marketing matter, you’re going to develop that familiarity over time. Most marketing individuals with whom I work, want their public to understand their mark immediately. Also think about a mark that will not be so tied to a particular time and place that it will be obsolete.

The next few slides identify about 12 factors that are considered by courts and most of these factors are considered by trademark offices when they are trying to decide whether one mark is likely to cause confusion with another. I want you to focus for a moment on the fact that there are about 12 factors. What that means is, there’s not just one inquiry that has to be made as to whether a particular mark can be adopted by your company and used with your products, and registered, and enforced. You have to really think about a number of factors.

And note also, the question is not whether you’ve chosen a mark that is identical to another mark, but whether you’ve chosen a mark that is likely to cause confusion. This is a much more nuanced and subtle inquiry. So we’re going to run through these factors quickly. The first is, indeed, how similar is the mark with respect to what it looks like, what it sounds like, what it connotes or signifies, And the overall commercial impression that it makes.

The next factor, how similar are the goods and services of your products with the mark of another company that you’re either going to compete with, or that you’re going to compare your product to. I tell my clients, if you flunk the first two bullet points you should stop right there and choose a different mark. The third consideration is, what are the trade channels for these products. And what we mean by that is, if one company is selling lipstick and another company is selling intercontinental missiles, you can probably have the same mark because those trade channels don’t overlap, the products don’t overlap.

The sophistication of the relevant consumers is important because if, in the sales cycle, you’re working and meeting with consumers who are very knowledgeable, trained, often educated, where there’s a lot of time that is given before that transaction is consummated, the sophistication of the consumers can be enough to make even similar marks coexist. We also look to see whether one mark is very well known. And we can measure that by consumer groups, sales, advertising dollars, and the length of use. You’ll see an example of that in a couple of slides. We look to see whether or not the mark you’ve chosen is very similar to other marks that already exist for goods of this type.

We look to see whether there’s any actual confusion, meaning whether or not your company has received a phone call by someone who, perhaps, is complaining about your product when it wasn’t your product at all. It was your competitor’s product. But the customer was confused because of the similar marks. And we look to see whether two marks have been used for a relatively long enough time, that if indeed there was a likelihood of confusion, we would have had actual confusion.

We also look to see whether a mark is commonly used. The more commonly used a word is, the less trademark protection you get. As between two parties, we look to see whether one party has a federal trademark registration, because that, again, will typically give you superior rights. We also look to see whether the goods are so related that it is likely that a party who had that mark first will move into the product line where you want to sell your goods under that similar mark. And we call that bridging the gap, moving from an existing product to a new but related product.

So applying this likelihood of confusion framework, here we see a company in Michigan, that registered the mark iPod in 1991. So take a moment and think. If there already was a registration for iPod, well before Apple ever launched its product, how is it that Apple was able to secure trademark registration for iPod?

And here we see some of the details of Apple’s registration. Here’s the description of the goods, portable and hand held digital electronic devices for recording, organizing, transmitting, manipulating and reviewing audio files; computer software for use in organizing, transmitting, manipulating, and reviewing audio files on portable and handheld digital electronic devices. So note here, that when we secure registration, we have to use descriptions that can seem slightly awkward or very structured. It’s because the trademark office is trying to use descriptions that will be consistent across goods.

You’ll see it was registered ten years, in fact it was first used ten years after the Michigan company had used iPod, and flipping back to that slide you’ll see it’s because one is for office furniture. And one are for the iPod device. Unrelated good, unrelated trade channels, even though the mark is identical. The next couple of slides show the kind of mistake a company can make when they don’t really understand the power of a senior user, meaning the company who used the mark first, and the fact that a mark does not have to be identical to be infringing, meaning to cause a likelihood of confusion.

Here, PepsiCo, a multi-billion dollar company launched a new product of frozen sweet drink under the name, Polar Shock. That company was sued by this company, Polar, primarily sold water, but sold other kinds of beverages. And the court concluded that this Polar had been in business for 100 years, it had a registration, that its products were sold through the same trade channels as Polar Shock, that the first words were identical. And that the word, shock, did not make the mark sufficiently distinctive. And if you compare the two slides you will also see a similarity in the graphic design of the lettering. Look at the lettering for polar here for Polar Shock. And the lettering for Polar there.

So there are a lot of considerations that go into when two marks are likely to cause confusion. And this Polar Beverage Company secured a court order that actually required Pepsi to pull the products from the stores where they had been installed. Very powerful.

Here we have an example with trademarks of co-branding, and co-branding is literally two trademarks that appear to the consumer. On the one side, we see Betty Crocker, a well-known U.S. company in the world of cake mixes, and Betty Crocker is co-branded with Hershey, which is a well-known chocolate company for Ultimate Fudge Mix. So, when I as the consumer, see this product on the shelf, I know instantly that Hershey’s has partnered up with Betty Crocker. So it’s not just any kind of chocolate fudge in that product, it’s Hershey. On the other side we see a recent deal made by the University of Michigan, a very well-known public institution, and Nike.

So we see the Nike swoosh, we see the University of Michigan maize and blue colors, another example of co-branding. You have to think very carefully who you want to team up with when you co-brand. One of the things you’ll want to think about in co-branding is how are you going to structure this deal? Is one party licensing to another? Are you actually going to set up a new business entity and have a joint venture that has its own stand alone existence? The companies will have to think through carefully, all of the elements of the product because your mark will appear with another company’s mark, and the consumers are going to connect those two companies.

You’ll have to think about what kinds of endorsements you want. When you think of certain celebrities, some who have had some disastrous public relations problems, you’ll have to think about who exactly you want endorsing this particular product. And, of course, you’ll want to think about how entering into a deal with one company effects or even limits your ability to do other deals. Lawyers, when they are working with clients, have to think about national and international considerations. How will a mark be seen in a country outside of the country where their client currently exists? What are the cultural sensitivity issues? Pronunciation?

Can you take advantage of existing treaties that will allow you to file in one country and then extend that filing to other countries? You’ll have to think about how important it is to have a distinctive mark. And indeed, there are such things are trademark pirates, meaning if your client begins to become very well-known in one country, there are individuals who will seek to secure trademark registrations in other countries so that when your client wants to expand there they have to actually bargain with trademark pirates. When I say tension between marketing goals and legal goals, what I mean is that often, the individuals responsible for marketing a product want to choose descriptive marks.

And of course the attorneys are saying, please don’t choose descriptive marks. It may not result in a mark that you can use or a mark that you can register. Please choose a more distinctive mark. The consequences of failing to register are very significant. And you think back to the slides we discussed earlier of the benefits of registration. So, consequences of failing to register. You may not be able to expand the business. The client may not be able to move into new geographic markets. The client may not be able to ban the importation, into a country, of counterfeit goods, or infringing goods. So, it’s very important to get those marks registered.

And indeed, if a client stops using a mark, typically for three years or more, that registration can be challenged and the mark can be deemed abandoned. So it’s important that if our clients are not using a mark, we revisit the question of whether we should get a new application on file, based on future intent to use the mark. Also, acquiescence is an important issue.

If you allow, or if the client allows another party to be using an identical or confusingly similar mark and takes no action, the failure to take action can be used against the client and the court can conclude the client has permitted or acquiesced in the use of that mark by a competitor, and the client can lose rights altogether. And then of course, for clients you’ll want to think about the real development of a business asset.

When you take the time and creativity to select a distinctive mark, power in your marketplace to stop a competitor from marketing their products or services in a manner that uses your marks, it allows you to think through how a particular brand will play out in terms of the product design, the packaging, the marketing. It allows you to think of ways that you can partner with another company where your brand will actually enhance the marketability of that product. You, of course, will want, internally, to develop what we call proper use protocols, how the mark appears, using a proper trademark symbol.

Not using the mark as a noun, so that you don’t say get me a Kleenex, but your advertising says Kleenex facial tissues. And then when I say forever’s a long time, it means that if you continue to use that mark and you continue to file your trademark renewals, you can actually have that trademark forever. So now you have a much greater toolkit with your knowledge of the various elements that can function as a trademark. It will help you build a stronger product brand. Enable you to extend that brand across products to strategically license that brand with companies where you want to have that affiliation and generate a revenue stream.

It gives you much greater power if you ever wish to stop an infringement. Sometimes all another company has to know is that you have a registration, they don’t, and you are actually prepared to go into court and indeed, to use the trade marks and the registrations for collateral for loans and for assets that you want to sell in the future.