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Making Sense of Trademarks: What, When, Why and How

Business.com / Last Modified: March 2, 2018
Photo credit: niroworld/Shutterstock

Here is what every small business owner needs to know about what trademarks are, including when and why SMB owners should (or should not) trademark their brand, and how to go about doing it.

You're an entrepreneur trying your best to build a successful business. You came up with an idea for a product or a service, and now you're doing everything you can to get as many people as possible to know that you exist.

You work on your website, you network, you build a team, you polish your internal processes, you refine your message to make it more compelling, you tweak your offer and prices, you work on SEO, you look for ways to pay fewer taxes, you run your Facebook ads – you have a thousand things to worry about.

If trademarks haven't been at the top of your to-do list, I don't blame you.

With this article, I wanted to answer the three questions business owners have about trademarks:

  1. Can I trademark my brand?
  2. Should I trademark my brand?
  3. How do I trademark my brand?

Can I trademark my brand?

Let me start with my definition of a trademark – not a textbook definition, the one that actually makes sense.

A trademark is basically anything that allows your customers and prospects to tell your products and services apart from identical or similar products and services others are selling.

Think, for example, of Chrome and FirefoxAs much as they're trying to outdo each other with new features and options, both are just browsers that essentially do the same thing. Their names and logos are how we identify one or the other. On the surface level, that's what trademarks are all about, but as you will learn from this article, there's so much more that you can do with trademarks to grow your business!

Because a trademark is supposed to help your market differentiate your products and services apart from others, there are two things it cannot be.

First, it cannot be too similar to someone else's brand covering the same or similar products and services.

If your brand copies the trademark of your competitor, how will your customers be able to tell your products and services apart from those of your competitor?

Did you notice that I said your trademark can't be too similar to someone else's trademark if it covers the same or similar products or services? It's because trademarks don't give you a monopoly over names or images themselves. What you get is a monopoly over the mental association between words or images and specific products and services that you sell. That's how the exact same word can serve as a trademark for two completely different businesses – precisely because they are two completely different businesses.

The second thing that makes a brand non-trademarkable is when your brand does nothing more than simply describe a feature or a characteristic of your products and services.

If all your trademark does is tell me about your features or benefits, then if you were allowed to protect that through a trademark, you’d effectively be getting the monopoly over the features themselves, which is not the proper function of a trademark.

Let's take McDonald's for example. Just because they own the name Big Mac doesn't mean that other restaurants are not allowed to offer burgers. They're just not allowed to call their own burgers Big Macs, even if they recreated the original recipe.

But if "Mac" were somehow an industry term relating to burgers, then McDonald's would not be allowed to trademark Big Mac, because in that case, "Big" would simply describe a feature of their "Mac."

That's why you can't trademark "New York Attorney," "Great Ice Cream," or  "Timely Accounting."

While pretty much anything can serve as a trademark – as long as it distinguishes your products and services from identical or similar products or services – in practice, there are five main things that get most commonly trademarked:

  • The name of your business (Apple, McDonald's)
  • Names of your products (iPad, Big Mac)
  • Names of your services iTunes, McCafe)
  • Logos (the apple logo, golden arches logo)
  • Taglines (Think Different, I’m Lovin' It)

Notice that sometimes the name of your products or services are the same as your company name; for example, Google.

You may be wondering, "I understand that my brand should do more than simply describe my product or my service to be trademarkable, but how would I know if it's too similar to what others may have trademarked before me?"

That’s a great question. And the answer to that is to start the process with a trademark search. You can run one yourself to eliminate obvious matches, but to do it right, you should have a trademark professional do it for you. It's not just that they can find what you might not be able to locate, it's that they can analyze the results and determine whether your brand is trademarkable.

Typically, a proper comprehensive trademark search with an opinion costs around $300 per trademark. 

Should I trademark my brand?

Assuming you can trademark your brand, the next question is, should you? Here's one of our taglines, "If It's Worth Promoting, It's Worth Protecting!"

To put it another way, why build a brand if you don’t protect it?

A good brand does at least one of these three things. Ideally, all of them. First, it helps your buyers and prospects find you. My son couldn't read when he was two years old, but every time we'd pass an Ikea or a McDonald's in our car, he'd proudly announce these brands to us. Will your potential customers be able to find your brand among dozens of similar offerings?

Second, trademarking helps your buyers remember you, so they can buy from you again and again. If they just stumbled on your product or service the first time around and liked it enough to want to order again, would your brand make it easier for them to know whom to call?

Finally, it sends a message that compels them to buy from you. Do you think Nike sold a few extra T-shirts because some people associate with their tagline "Just Do It?"

If your brand does one of these things, it's a great candidate for trademarking.

So why exactly would you trademark your brand?

Three main reasons. First, a registered trademark minimizes the risk of you one day receiving a letter from a lawyer demanding that you immediately change your brand into something else because, it appears, the lawyer's client had trademarked the brand first. Whether that lawyer is right or wrong, you don't want to be on the receiving end of that demand letter. Both rebranding and litigation can be very expensive.

Second, a registered trademark minimizes the risk of customer confusion. It's so much easier for you to stop others from infringing on your brand compared to if you didn't have a registered trademark.

With a registered trademark, most often it's just a matter of sending a demand letter. Without a trademark, you're more than likely to end up in a protracted court battle trying to prove to the judge that your unregistered trademark should receive protection.

Finally, a registered trademark is a valuable asset in and of itself.

Unless your business ends with you personally, you might want to sell, license, franchise or even leave it to your children. The value of your business, to the extent that it depends on the value of your brand, relies on whether you properly protected the brand. It's much easier to do a valuation of something that has a government-issued certificate behind it. 

How do I trademark my brand?

There are basically two ways you can register your trademarks.

Option  No. 1: You can do it yourself. If you're smart enough to run a business, you're smart enough to learn how to file your own trademarks.

The real question is if it is worth your time learning all the ins and outs of doing it properly. Trademarking is a multistep process takes on average 14 to 18 months from start to finish.

A monkey can file a trademark application. Where it gets difficult is when you receive a letter from the U.S. Patents and Trademark Office (USPTO). It's called an office action, and in it, the trademark examiner will tell you why they are not going to approve your application.

This happens in about 65 percent of applications. And just so you know, these letters are not written in the most human-friendly language.

No wonder so many of trademark applications filed by brand owners themselves never get registered. So while self-filing can be the most cost-effective strategy, it may end up costing you time and money.

The USPTO will not refund fees for refused applications. And the earliest you are going to find out that there is something wrong with your application is four months after you file it. In Canada, the waiting period is now over eight months. Often, if something is done incorrectly, you may kiss your brand goodbye.

Again, can you figure it out? Yes.

Is it worth your time? Unless you plan to file dozens of trademarks, the answer is probably "no."

It's just like driving. It takes weeks or even months of driving school lessons before you get a license and can drive safely and smoothly. The time it takes to learn driving was probably worth your while because you drive often, maybe even every day.

Now imagine if you had to spend all this time learning if you knew you'd only drive once in your life. You'd probably say, "Nah, I'll just take an Uber!"

Your role as a business owner is to build your business, not to acquire the skills of everyone who can help you. So here's where the second trademarking option comes into play.

Option No. 2: Have someone who knows what they're doing to do it for you.

There are many options out there ranging from websites that help you with the self-filing process to solo attorneys to intellectual property boutique firms to full-service law firms.

How do you pick the one that best fits your needs and your budget? They differ in more than just the amount of money their services will cost you, so you shouldn't just shop around for price. After all, if price is all you care about, look at option No. 1 and file your trademarks yourself.

Below are a few questions to ask any attorney, firm or service you're considering hiring as your trademarking services provider: 

  • Can you quote a fixed fee for the entire trademarking process from filing the application to getting the registration certificate?
  • Will you charge me for the initial comprehensive search of registered and applied-for trademarks to confirm that my trademark is registrable?
  • Will you charge me an hourly rate to respond to office actions?
  • Will you charge me extra every time you receive something from the USPTO and notify me about it?
  • If the USPTO refuses to register my trademark, will I get my money back?

Do not make up your mind until you have the answers to these questions.

In conclusion

You're an entrepreneur trying your best to build a successful business. You're building a legacy. Your brand is how people will know and remember your legacy. Don't let anyone tell you your business is not worth building. Don't let anyone tell you your dreams are not worth cherishing. Don't ever let anyone tell you your brand is not worth protecting.

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