Most of us understand the concept of owning property. Property is a tangible, physical asset that one can stand on, walk in, hold, wear or drive. What about intellectual property? How can one own a thought or a concept? Intellectual property concerns itself with creations of the mind. Inventions, writings, paintings, music, products, logos, and branding are all examples of intellectual property. Unlike physical or real property, protecting intellectual property is trickier than its more tangible counterpart. Patents offer protections for inventions; copyrights offer protections for artistic expressions; trademarks and service marks offer protections for branding.
Trademark protection is not unequivocal. Many small, locally owned businesses forgo trademarking their business name and identity, often due to a lack of understanding of the implications for not doing so or for a lack of funds earmarked for the legal costs. As is the case with most things in life, not trademarking a business name is fine—until it isn’t. Paying to trademark a business identity is similar to buying fire insurance for a house. One may never use it but having it when your house is on fire alleviates a great deal of loss and insurmountable expense.
A trademark is any word, name, or symbol adopted and used by an entity (or person) “pointing distinctly to the origin or ownership of merchandise to which it is applied and legally reserved to the exclusive use of the owner as maker or seller.” “Trademark.”The Merriam-Webster.com Dictionary
As has been recently covered in our local news, not registering a trademark can leave a business susceptible to someone else doing so. (Watch WLOS report or read Citizen-Times article on the topic.) When that happens, the identity and branding established by the non-trademarked entity can be lost, regardless of how long the non-trademarked entity has been operating. Not only will the non-trademarked business have to change its name midstream and lose all of the brand recognition that is built, it may also face the real possibility of paying damages to the trademarked business. Even if damages are not levied against the business, paying for litigation in a trademark claim is costly. Additionally, paying for an entirely new branding of an existing business, which usually requires reprinting, redesigning, and removing signage, is expensive and precarious. Naming a business is a time consuming, thoughtful, carefully considered endeavor. It is not something most businesses would want to rethink under duress and after many years of successful operation.
To avoid this, small businesses should plan, as part of the start-up costs, to register a trademark or service mark. Hiring an attorney who is familiar with Intellectual Property Law is not necessary but will give a business much greater security than DIY registration will. The North Carolina Secretary of State has helpful background information on its site for those business owners. A business does not have to register its business name beyond the State, but it is recommended. National registration is the best way to protect your business. The US Patent and Trademark Office website strongly encourages an applicant to use an attorney. “If you are an applicant domiciled in the United States, you are not required to have a U.S.-licensed attorney represent you, but we strongly encourage you to hire one who specializes in trademark law to guide you through the application process.” The search process alone can be daunting to a person unfamiliar with the process. Once you receive registration from the Trademark Office, you can go back to running your business with your own name.
If you have an issue involving Trademarks, contact Allen Stahl + Kilbourne to discuss your options.
By Megan Farley
Updated: December 22, 2019