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All You Need to Know About Using Trademarks for Your Business Don't overlook the importance of trademarks, as they are paramount in protecting your brand.

By Mital Makadia

Opinions expressed by Entrepreneur contributors are their own.

Imagine that after countless hours spent in research and development, you announce your new company to the world. You've branded your entire company around a name that you've been talking up and that you painstakingly chose. You have a beautifully-designed, expensive logo that's printed and featured on many expensive marketing materials.

Now imagine that a few years later, another business in a similar space announces its genesis ⁠— but it's using a name or logo very similar to the one used by your business. If you properly gained and maintained trademark protection for your company's name, tagline or logo, those properties would be protected and prevent others from being able to use any of them legally in confusingly similar ways. However, if you didn't secure trademarks, the other company may be well within its rights to use the logo, even if it's similar to yours.

What are trademarks?

According to the US Patent and Trademark Office (USPTO), a trademark "can be any word, phrase, symbol, design, or combination of these things that identifies your goods or services. It's how customers recognize you in the marketplace and distinguish you from your competitors."

The most common protections that trademarks offer are for a word, phrase or logo. However, they can also protect the look of a building (think McDonald's), a sound (MGM's roaring lion) or a color (that beautiful, telling Tiffany's blue).

While the trademark "™" is a highly-recognized symbol of intellectual property rights, it refers only to the protection of a source of goods. Others include the Service Mark "SM", which indicates a provider of services, like daycare, for example. Finally, a trade dress is a set of distinctive, non-functional features that distinguish one company's goods and services from another; features like the shape of a Coca-Cola bottle.

Related: Free On-Demand Webinar: How to Set the Legal Framework for Your Startup

Why are trademarks important?

It's important to protect a business' intellectual property with trademarks, but why? First, consumer protection. Consumers of a trademarked company can be assured that the quality of goods and/or services is what the company says it is. For example, without trademark law, 100 different companies could use the name "Cheerios" on their cereal. How would you know you were getting the cereal made by General Mills?

Second, trademarks allow and incentivize companies to generate goodwill, which benefits their consumers. Adding to the Cheerios example above, consider this: Without trademark protection, why would General Mills have the incentive to maintain the quality of Cheerios? No one would know they were buying General Mills' cereal unless only General Mills could use the Cheerios name.

Related: Online Legal Tools Save Time and Money. But They Aren't Lawyers.

What can be trademarked?

Understandably, a common question for startups is "Is X trademarkable?" Unfortunately, there's no simple answer. Whether "X" is trademarkable depends on the goods/services for which the mark will be used.

A better question to ask is, "Is X trademarkable in connection with ABC goods or services?" For the answer to be in the affirmative, two conditions must be satisfied: No one else can have priority, and the mark must be sufficiently distinctive. Here, priority means that the earlier owner of a mark can prohibit later users from using the mark in confusingly similar ways.

Securing trademark protection

In the United States, getting trademark protection is as simple as using the mark in commerce. You don't even have to register it. But consider it.

While you can register a trademark in a specific state, startups should register trademarks with the federal USPTO, which protects your company's marks throughout the United States.

Registering a trademark enables you to also use the ® mark. Unregistered trademarks may use only the ™ or SM marks. Here are other reasons to register a trademark:

  • Your mark will be part of trademark search results
  • It will be more difficult for your mark to be challenged in court
  • You will be able to secure more favorable resolutions if and when you sue for trademark infringement

Protecting your trademark rights

Your trademark is yours as long as it continues to indicate its source. But, you can lose your trademark if your mark becomes a generic term for the goods or services you are using in connection with the mark. Generic terms, like Xerox, Kleenex or Aspirin cannot receive trademark protection. This is referred to as "genericide," when the term for a good or service becomes a common noun. To prevent genericide, discourage your constituents and audiences from using your mark as a verb, adjective or noun.

Failure to police your mark can also result in compromising the rights and/or loss of your mark. For example, if your company's leaders allow others to use similar marks that confuse their good/service with yours, it will be difficult to enforce the mark. Avoid this by regularly searching for potential infringements. Sending cease and desist letters can also help discourage the use of a similar mark by others.

Finally, failure to properly license or register a trademark can result in losing it. Be sure to license or assign the trademark properly.

While trademark laws can be confusing, they are important in protecting your brand. Utilizing the services of experienced counsel can help eliminate any issues regarding improper trademark licensing or registration.

Related: What's the Best Way to Legally Structure Multiple Businesses?

Mital Makadia

Entrepreneur Leadership Network® Contributor

Partner at Grellas Shah LLP

Mital Makadia is a partner at Grellas Shah LLP and co-founder of startup dispute mediation service Solvd4. A TechCrunch-verified lawyer, she provides counsel on a variety of corporate and transactional matters, equity financings, M&A and commercial and intellectual property for her clients.

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