Understanding the basics can reap your business rewards

Every business should know how to select, use and protect its trademarks. Failure to do so can diminish its brand, cause financial harm and result in unwanted lawsuits. Add value to your organization by learning and practicing the following basic guidelines.

• A business name is not necessarily a trademark. Don’t assume that your business’s legal entity name is also its protected trademark. A trademark is the name under which a good is sold, and a service mark is the name under which a service is provided (this article uses “trademark” to refer to both). You must take steps to register and protect a trademark. Merely forming an entity under that name is not enough.

• Register your mark with the U.S. Patent and Trademark Office. Doing so provides great value for only a modest investment: use of the ® symbol to deter would-be infringers; priority rights to the mark in every state; placement in the USPTO database used to checkmark availability; the right to sue in federal court; and a valuable asset that you can license or sell.

• Use the correct symbol. Using the ® symbol without a USPTO registration is against the law. If your mark is not yet registered, use ™ for a trademark and ℠ for a service mark. Doing so signals that you claim ownership of the mark, which deters others from using it.

• Avoid generic and descriptive marks. A generic mark is a common term for a good or service (“Apple” for fruit), and cannot be registered as a trademark. A suggestive mark describes a characteristic of a good or service (“Cold and Creamy” for ice cream), and can be registered in only limited circumstances. Avoid both types.

• Pick suggestive, arbitrary and fanciful marks. A strong, registerable mark is suggestive (it implies a characteristic of the good or service, but requires imagination to connect that characteristic with the mark, like Netflix® for streaming), arbitrary (it has a common meaning that is unrelated to the good or service, like Apple® for computers) or fanciful (made-up term with no meaning, like Exxon® for fuel). Use those types of marks.

• Clear your mark. Adopting a trademark similar to one already in use can prevent you from registering that mark or result in a lawsuit. The existing mark need not be identical: Marks that look similar, have a similar pronunciation or provide a similar commercial impression can all prevent use and registration of your mark. Well before using a trademark, perform a “clearance” search for existing marks. The stakes are high, and the analysis is nuanced. Rely on a professional.

• Protect your mark. Once registered, you must watch for, and take efforts to stop, any infringement or unauthorized use of your mark. Failing to do so can weaken your mark over time. This need not be a costly endeavor: Many companies offer low-cost monitoring services, and an experienced trademark attorney can often resolve infringement with a timely cease-and-desist letter.

• Use license agreements. Allowing others to use your mark can bring big benefits: strategic partnerships, co-branding and royalty payments. But only do so with a well-drafted license agreement in place. Without one, you risk losing control of, or weakening, your registered mark.

• Use and renew your mark. Unlike a patent or copyright, a trademark registration can last forever if it is continuously used and all USPTO renewal filings are made on time. Renewal deadlines are spaced out in five- and 10-year increments, and filings can be tricky. Rely on trademark counsel to track deadlines and meet filing requirements. Failure to do so can result in loss of your registration.

• Don’t let your mark become generic. Your mark can lose legal protection if it becomes the generic term for a class of goods or services. “Aspirin,” “escalator” and “thermos” are examples of once valuable trademarks that were later held to be generic terms, free for anyone to use. Never use your mark as a generic noun or verb, and take efforts to stop others that do.

• Trademark law is complicated. But understanding the basics — and knowing when to bring in trademark counsel — puts you in a position to reap value from this valuable business asset.

Attorney Brian Thomas of the law firm Sheehan Phinney is an intellectual property attorney and business litigator.