legal currents

Company Names, , and Protecting Your Commercial Identity

Susan B. Flohr

Company Names several states will create rights in those states; Windows® for computer operating Imagine a company doing business without nationwide use creates nationwide rights. systems, iPod for portable digital music a name. How could satisfied customers find players, TT for sports cars, United Way it again? How would unsatisfied customers Trademarks/Service Marks for charitable fund raising campaigns. avoid it? It would be simply impossible. names—trademarks or service Trademarks can be , such as the Nike Company names create and embody marks—differ from company names in swoosh or the Lacoste alligator corporate identity. Company names identify that they are used on or in connection with .1 Even color can be a , a specific entity that is the source or origin of specific products or services to differentiate such as green for Deere & Company certain products or services to customers and them from those offered by other compa- tractors or pink for Owens-Corning the public. Famous company names include nies. Without trademarks and service marks, fiberglass insulation. Even sound is capable Microsoft Corporation, a well known source consumers would be unable to buy the same of functioning as a trademark or service for computer software, and Apple Inc., product/service from the same provider mark. Many of us recognize certain movie a well known source for computers and each time; all goods and services would be production companies (20th Century fox’s portable digital music players. Audi AG is a fungible. Trademarks and service marks trumpeting announcement before a movie) famous German carmaker. United Way of create an identity for the product/service. or even certain computer programs (AOL’s America is a famous nationwide charitable The accumulation of positive customer e-mail tone) from their use of a specific fundraising organization. Another company experiences over time becomes associated recognizable sound signature associated name very familiar to readers is the National with a particular trademark or brand, devel- with their services or use of their products. Association of Professional Employer Orga- oping valuable “goodwill” in a brand, which Another trademark with which you are nizations, the trade association for profes- in turn is associated with the company and familiar is NAPEO, the used sional employer organizations that publishes its goods or services. by the National Association of Professional this PEO Insider magazine. The famous companies above each 1 The Nike swoosh and the Lacoste alligator are regis- Company names are creatures of use certain trademarks we all recognize tered trademarks of Nike Inc. and Lacoste Alligator state law. Rights in company names arise for certain of their products, including S.A., respectively. from use in connection with the business operations of the particular company. They can be reserved with the appropriate state in a nutshell authorities and once a company incorporates • Rights in company names arise from use in connection with the business operations of under a particular company name, that state the particular company. They can be reserved with the appropriate state authorities and will not allow another company to incor- once a company incorporates under a particular company name, that state will not allow porate under the identical company name. another company to incorporate under the identical company name. Company name rights are considered rights “at common law” rather than created by a • Proprietary rights in trademarks or brand names in the United States arise from use. Use of statute, and are not federal or nationwide trademarks must be on or in close connection with the products or services being provided. Unlike company names, trademarks and service marks are creatures of both state and unless they are used throughout the country. federal law and thus can be registered with the U.S. Patent and Trademark Office. The territorial extent of exclusive rights in a company name or trade name thus • Before a company adopts and commences use of a new mark, it is prudent to have the depends upon the geographic area in which mark searched for prior conflicting marks and to obtain an opinion of probable availability the company name is used. Thus, use of a and ability to be registered from a qualified attorney. Once a mark has been searched company name in multi-state advertising or and cleared, an application can be filed with the U.S. Patent and Trademark Office. in connection with conducting business in

12 l PEO INSIDER | MAY 2007 Employer Organizations, with and without perceived as referring not to the primary possible conflicting marks, a full investiga- its to identify its association services or first meaning of the word per se, but tion conducted by a reputable computerized through which it promotes the interests as source indicating terms—a secondary trademark search firm with a database that of professional employer organizations. meaning—attributed to the marks. includes federal Trademark Office records NAPEO with or without the logo is also a As is the case with company names, (which include the 50 states and common- trademark for printed educational materials. proprietary rights in trademarks or brand law sources relevant to the particular names in the United States arise from use. industry) will shed much-needed light on Use of trademarks must be on or in close the relevant marketplace so a reliable assess- connection with the products or services ment about availability can be made. being provided, such as on packaging for products and in advertising or promotional Descriptive versus Distinctive Marks materials for services. Unlike company It is always tempting to select marks There is another important type of names, trademarks and service marks are that tell the prospective purchaser of a mark being used by members of NAPEO, creatures of both state and federal law and company’s goods or services exactly what and that is , a collective membership mark thus can be registered with the U.S. Patent the product or service is. Nationwide used by members to indicate membership and Trademark Office. Insurance and British Airways come to in NAPEO. mind. However, such marks are considered Selecting a New Mark “descriptive” under the law and require Searching proof that they have come to signify the Before a company adopts and commences services of the owner before they are use of a new mark, it is prudent to have registrable in the U.S. Patent and Trade- the mark searched for prior conflicting mark Office and protectable. However, All these companies have built valuable marks and to obtain an opinion of prob- marks that are so aptly descriptive of the goodwill in their marks, which have acquired able availability and ability to be registered goods or services for which registration what is termed “secondary meaning” to from a qualified attorney. While no search is sought that the Trademark Office finds the public. In other words, these marks are can guarantee to find 100 percent of all they are incapable of acquiring trademark

Summit Software

MAY 2007 | PEO INSIDER l 13 significance will be denied registration and task is more difficult. In markets such as relying solely on common-law rights, are difficult, if not impossible, to protect. this, it is often useful for a company to adopt including the creation of certain presump- Generic terms are also not registrable or a distinctive mark or an acronym to use with tions under the law, such as the presumption capable of being owned by a single entity. its more descriptive components to help set that the registration and mark are valid, Examples include terms such as escalator it apart. For example, there are a number of that the registrant has the exclusive right to and cellophane. Merely descriptive terms companies offering various types of services use the mark, and that the registrant is the and generic terms are free for use by that use service marks including the terms rightful owner of the mark. Federal trade- everyone in a fair descriptive manner, and “Government Employees,” such as Govern- mark rights are also nationwide. Once a thus are not good choices for trademarks or ment Employees Real Estate, Govern- registration issues, no one else can adopt the service marks. ment Employees Mortgage Company, same or confusingly similar mark and claim To be memorable and be capable of and Government Employees Health he had no notice of the registration. By law, identifying and distinguishing a company’s Association. In this milieu, it is prudent the registration constitutes constructive products or services, a mark should be that Government Employees Insurance notice. Also, merely by its very presence on “arbitrary or fanciful” as applied to the Company uses the acronym GEICO as a the federal register, a registration discourages products or services. Arbitrary or fanciful service mark, which is more distinctive than others from using the same mark for the marks are considered strong and can be its full name. BB&T, instead of Branch same or related goods or services, assuming owned exclusively. Coined terms such as Banking and Trust for banking services, the newcomer does a search before adopting Exxon and Kodak are examples of strong, is another successful example. Another a new mark. Other advantages of securing highly protectable marks. Marks that useful technique for standing out from the a federal trademark registration include suggest certain qualities of the product crowd and capturing the goodwill of a mark certain remedies for infringement that are or service can also be strong and protect- is pairing a distinctive element with the available under the federal Trademark Act, able. The mark, Windows,® for example, descriptive terms, such as Matterhorn Insur- such as treble damages and attorneys’ fees suggests the manner in which applications ance Agency for life insurance services. when infringement is proved to be willful. are available to users of computers running Microsoft’s operating system, but does not Registering a Trademark or Policing describe them and is thus distinctive and Service Mark The law requires all owners of trademarks highly protectable. Quattro is suggestive of Once a mark has been searched and cleared, and service marks to monitor unauthorized all-wheel drive systems, but is not descrip- an application can be filed with the U.S. use of a mark. As a result, it is important tive of them and is thus a strong mark for Patent and Trademark Office based either for companies to be alert to instances of Audi’s automobiles, including its proprietary on use in commerce (commerce between actual confusion that come to their attention all-wheel drive system. The North Face for two or more states or between a foreign and to seek legal advice about how such parkas suggests that it will keep you warm country and the United States) or on the situations should be handled to protect and on cold mountains, but it isn’t descriptive basis of intent-to-use (ITU) in the future. In preserve their own rights in their marks.● and in fact is highly distinctive and therefore the case of an ITU application, a registra- very strong and protectable. tion will not issue until the mark is being Susan B. Flohr is a partner with Blank Rome In marketplaces that are crowded by used in commerce. The process of securing a LLP, Washington, D.C. She specializes in companies using similar names, particularly registration takes approximately nine to 12 trademark and copyright matters and has when the names are highly descriptive, it months to complete, depending upon the registered NAPEO’s many trademarks and may be difficult for prospective purchasers complexity of the issues encountered during service marks over the years. to be sure with whom they are and wish to examination. Once the trademark examiner This article is designed to give general and timely informa- be dealing. On the other hand, consumers has accepted the application for registration, tion on the subject covered. It is not intended as legal advice or assistance with individual problems. Readers are pretty savvy and develop highly refined it will be published in the Official Gazette should consult competent counsel of their own choosing methods of differentiating between of the U.S. Patent and Trademark Office for about how the matters relate to their own affairs. companies and based on relatively opposition purposes. During this 30-day minor differences. Take for example the period, the world is put on notice that 2 On the other hand, if an opposition is filed by, for marketplace for women’s clothing. No one anyone who believes he will be damaged example, an entity that believes it has prior rights in the same or confusingly similar mark for the would seriously maintain that consumers by issuance of the registration may file an same or related goods, an administrative trial will are confused by the brands Calvin Klein, opposition to registration and make his case. commence, an opposition proceeding, before the Anne Klein, Michel Klein, and Lisa Kline. If no opposition is filed, the registration will U.S. Trademark Trial and Appeal Board. The issue presented to the board to resolve will be whether Consumers are quite capable of distin- issue and the applicant can from that point or not concurrent use of the two marks at issue will guishing these marks. The distinctiveness onward use the ® to indicate registration in be likely to cause confusion to the public, and if it of each of these marks, namely their lack of its packaging and printed materials.2 finds confusion is likely, registration to the mark descriptiveness, adds to the ease of keeping Registration of a trademark or service will be refused. Conversely, if the opposer fails to convince the board that confusion is likely, the them apart in the consumer’s mind. mark with the U.S. Patent and Trademark proceeding will be terminated and the registration When marks are more descriptive, this Office provides many advantages over will issue to the applicant.

14 l PEO INSIDER | MAY 2007