What is a Trademark?
Too often entrepreneurs put in years of hard work, blood, sweat and tears, only to find that success brings a host of new problems – including trade name problems. Why do so many small businesses take so long to deal with an issue as important as their own identity? Understandably there are incredible pressures facing a small business out of the gate – paying rent, hiring good staff and making payroll, attracting customers, compliance with business licenses, etc., etc. For most, to worry about trademark assumes you’re going to be successful enough to have a trademark problem before success is a foregone conclusion and so it slides down the totem pole of concerns. And then, there are those who just don’t know that there is such a thing as a trademark. The problem is trademark is an issue from day 1 - the day a business opens its doors (or goes live on the Internet)… and then Betty Business-owner in Havre de Grace, Maryland who runs an online dating service is introduced to the law of trademark after receiving a friendly cease-and-desist letter from a business doing the same thing, using the same name… in Topeka, Kansas. Betty just spent thousands of dollars in web design and has developed a favorable rating in Google. Changing her name at this point would almost certainly cost her the web presence she worked so hard to obtain, not to mention the money it will take to hire a lawyer to deal with the potential trademark infringement matter – and vet new names.
Sufficed to say, trademark is vital today, especially as commerce has rocketed onto the Internet. So with that, here are some basics about trademark to break the ice.
What is a trademark? A trademark is the legal claim (or rights) to the exclusive use of a name in commerce. If you sell goods, you seek a trademark for the name you stamp on those goods. If you sell a service, you seek a service mark for those services (although many refer to “trademark” generically for both goods and services). Under common law, you presumptively own your trade name from the first date of use in commerce, however to obtain a trademark you would need to file an application either with the state in which you do business, or with the United States Patent & Trademark Office (USPTO) if your business crosses into other states.
If I get protection of my name from the first date of use in commerce, why would I file for a trademark? It’s true that you can earn rights to your name from the date of first use. However there are benefits to obtaining a trademark, or service mark, either with the USPTO or your state government. The first benefit is in the application process itself – if there’s a potentially competing use of your name, the examining attorneys at the USPTO will let you know. If there is a competing use of the name, or some close variation, it’s better to deal with it early in the process. The second benefit is that you, for all intents and purposes, are planting your flag on the name with a successful application. A competitor has to overcome the presumption with proof that he/she was using the name prior to your use. A third benefit is that the trademark is very effective in deterring infringing use by others – sending a cease-and-desist letter of your own is much more effective when accompanied by a copy of your trademark rather than your alleged, common law ownership.
How does one obtain trademark in one’s name? Most states, like Virginia, offer a trademark that is enforceable within their own borders. In Virginia, that application process is much cheaper and easier than that with the USPTO. For protection in interstate commerce, one would file a trademark application with the USPTO.
When should I file a trademark application? It really doesn’t make sense in this day and age to delay the trademark process. Why put blood, sweat and tears into a name that may not ultimately be yours? If money is no object, one would obviously want to start the process as soon as one qualifies for a trademark, or after the date of first use in commerce. The USPTO also offers a provisional application so you can reserve the name as you are preparing to enter the market place. Better still, hiring counsel to vet potential trade names can one avoid potential disasters. But as stated above, small businesses are plagued with hurdles large and small at their formative stage and in reality, businesses may not have funds to hire an attorney or file with the USTPO. Many small business owners are forced to pick and choose between priorities and in that early stage, trademark is more academic. On the other hand, the trademark process in Virginia is incredibly user-friendly and very inexpensive. The registration fee is $30.00. You read that correctly. And while it’s always advisable to seek legal counsel at this stage, the instructions are readily available here. The federal trademark is more expensive and again, it’s advisable to seek legal counsel when filing.
How long does a trademark last? Trademarks in Virginia need to be renewed every five years and the USPTO maintains a 10-year renewal process with maintenance requirements between years five and six.
How much does a trademark cost? Of course legal counsel is advisable through the process and that cost will depend on the attorney. However as stated above, the fee per class in Virginia is $30.00 and the fee with the USPTO starts at $275.00.