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A Better Partnership

Publications

Apr 2006
01
April 01, 2006

Trademark and Trade Name Clearance

Trademarks. A trademark is a symbol of source or quality. It is often thought of as a "brand." It represents the reputation and goodwill of a business or product. The only difference between a "service mark" and a "trademark" is that a service mark identifies and distinguishes services and a trademark identifies and distinguishes products. The terms "mark" and "trademark" are often used interchangeably to refer to both trademarks and service marks.

The same mark can be both a trademark and a service mark. For example, McDONALD'S is a service mark for restaurant services and a trademark for the food sold in the restaurants.

Trade Names. A trade name is a name used to identify a business entity itself, as distinguished from the goods or services of the business. A trade name can, and most often does, also function as a trademark depending on how it is used. For example, Ford Motor Company uses "Ford" as its company name (trade name) and uses "Ford" to identify its products (trademark). So when the name is being used to refer to the business as a whole, it is being used as a trade name, but when it is being used to refer to the products or services of that company, it is being used as a trademark or service mark.

Trademark/Trade Name Searches. A trademark/trade name search should be conducted before a mark or trade name is adopted to make certain that there are no confusingly similar marks or trade names that could create infringement liability and/or prevent registration. A search can be performed at different levels. The primary purpose of each search is to determine whether someone else is already using the same or similar mark or name in connection with the same or similar goods or services.

Types of searches:

  1. Preliminary search - a relatively quick and inexpensive search designed to spot obvious conflicts at the outset and avoid the expense and time of a full search. A preliminary search covers trademark applications and registrations at the USPTO and a general Internet search. It can also cover domain name availability, if requested. If a mark clears the preliminary search, a full search is usually advisable.

  2. Full search - a thorough search of a broader range of federal and state registrations and common law sources, including trade directories and publications, and industry databases. A full search fills in the gaps not covered by a preliminary search. Although not required, it provides a much clearer picture of the potential for later disputes and usually is money well spent. Being forced to stop using a name or mark several years after its adoption can be devastating and costly.

If a search reveals a potentially conflicting mark, the next step often is to investigate the mark and how it is used. Sometimes, a cited mark is no longer in use or the goods or services on which the mark is used are not similar. If the investigation reveals that the mark is used in connection with similar goods or services, then the mark or trade name should not be adopted.

Incorporation and Assumed Names Filings. A common misunderstanding is that a trade name or trademark is cleared for use when a state allows incorporation under, or reservation of, a corporate name, or allows the filing of an assumed name. As noted above, a trade name is not the same as a trademark (see Trade Names above). Further, most states (including Michigan) will allow a business to be formed under any name as long as it is not virtually identical to the name of an existing corporation, limited liability company, partnership or other entity registered in the state. The state agency does not consider whether the name violates any federal or common law trademark rights. Thus, such a name registration or incorporation does not mean that the name does not infringe the rights of others. As an example, the Michigan Secretary of State would allow a business to be incorporated under the name "The Microsoft Store, Inc." even though Microsoft Corporation is registered to do business in Michigan, but undoubtedly Bill Gates would not let the business operate under this name.

If there is a likelihood that a mark will also be used for a trade name, it should be cleared or reserved with the appropriate agency (a) in the state in which the entity is formed, and (b) in each state in which the entity will qualify to do business.

Internet Domain Names. Businesses often want to use their trade names or trademarks as part of an Internet domain name. Registering a domain name is a relatively inexpensive and easy process. If acquiring the domain name is important, then the available domain name options should be made part of the clearance search. If the exact name is not available, close alternatives often are. As examples, if the name is not available in the ".com" top level domain, it may be available in other top level domains such as .net, .biz, .info and .us, or the name might be available by adding a hyphen or some other minor change, such as if "xyz.com" is not available, "x-y-z.com" may be.

If you have any questions, feel free to contact your WN&J attorney or Jim Scott at 616.752.2469 or jscott@wnj.com; or Scott Keller at 616.752.2479 or skeller@wnj.com.

 

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