“Trademark Tips for Your Web App”

My buddy Stephen Nipper wrote this very useful piece about trademarks for Think Vitamin.

“Trademark Tips for Your Web App”

Choosing a good name for your web app is one of the most important things to get right. But without an understanding of the way that trademark regulations work, you could fall at the first hurdle. Brush up on the basics with this expert guide.

Trademarks and names

Whether it’s Whistler or Longhorn, product codenames eventually get replaced with a formal product name. Determining what final name to use is a delicate balance of marketing (including domain name availability) and trademark rights. Just because a name would be a strong trademark doesn’t mean it is appealing from a marketing perspective, and vice versa.

A general understanding of how trademark strength is determined should aid in helping you choose a name for your web app, service or product, which will maximize its trademark potential.

What is a trademark? In legal terminology, a trademark is an “indicator of source.” While legal definitions have never been accused of being easily understandable, what “indicator of source” really means is that the trademark is a virtual arrow that points to a single business (or other entity). For instance, when you see the word FLICKR, you automatically think of a web app, now owned by Yahoo!

If a trademark “points’ to a single source of goods, then it is “distinctive.” Distinctive trademarks are protectable, those that lack distinctiveness are not protectable. Thus, not all names are created equal.

Traditionally, trademarks can be classified into five different categories: generic (generically descriptive) trademarks, merely descriptive trademarks, suggestive trademarks, arbitrary trademarks and coined trademarks.

a. Generic

Generic trademarks are trademarks consisting of the generic name of the goods or services (hereafter just “goods”).

Example: Company X releases a new web-based spreadsheet application under the trademark SPREADSHEET.

In such a case, it is impossible for the trademark SPREADSHEET to indicate source because a consumer will always view the word ”spreadsheet’ as generically describing the goods (a spreadsheet) rather than serving as a trademark (pointing to a single source of goods). Generic trademarks are never protectable and should be avoided like the plague.

b. Merely descriptive

Merely descriptive trademarks aren’t the generic name of the goods, but instead they describe them.

Example: Company X releases a new web-based spreadsheet application under the trademark of FAST.

While FAST isn’t the generic name for a spreadsheet, it does (presumably) describe Company X’s spreadsheet. A consumer seeing the word FAST on a spreadsheet would not view the usage as a trademark (pointing to a single source of goods) but would instead view it as merely being a description of the goods themselves (that they are fast). Thus, Company X’s FAST trademark fails to function as a trademark (it doesn’t distinguish over the goods of its competitors) and is therefore not protectable.

Of course, if a trademark owner’s use of a merely descriptive trademark over an extended period of time results in consumers actually viewing the term as an indicator of source and not as being merely descriptive of the goods, then at that point the trademark has “acquired distinctiveness’ (secondary meaning) and is protectable. Acquired distinctiveness can be difficult to prove and as such it is typically best to avoid adopting merely descriptive trademarks.

c. Suggestive

A suggestive trademark does not merely describe (or generically describe) the goods, but instead suggests a feature or quality of them.

Example: Company X releases a new web-based spreadsheet application called CONFIDENCE.

While the term “confidence” may suggest that you can trust the spreadsheet, it does not merely or generically describe the spreadsheet. Suggestive trademarks are by definition distinctive and are protectable.

So, where is the dividing line between “distinctiveness” and “suggestivity?” Judging whether a term is properly classified as descriptive or suggestive depends on several factors. Generally speaking, suggestive trademarks are those which need imagination, thought or perception to decide what the goods actually are. Descriptive marks, on the other hand, immediately describe something about the goods with which the mark is associated. So, if the words in the mark describe the goods connected with the mark, then the mark is descriptive. If, however, a consumer must make a leap of imagination to understand why the trademark was selected, then the mark is suggestive. All clear?

d. Arbitrary

An arbitrary trademark is one whose use is arbitrary…having no connection with the goods.

Example: Company X releases a new web-based spreadsheet application called ICECUBE.

The word icecube has no relationship to spreadsheet applications. Its use is completely arbitrary. Arbitrary trademarks are, by definition, distinctive and protectable.

e. Coined

A coined trademark is a trademark that was coined or made up.

Example: Company X releases a new web-based spreadsheet application called XYROTHAN.

The word xyrothan has no meaning in English or any other known language. Coined trademarks are likewise, by definition, distinctive and protectable.

Summary

Generic trademarks should never be used. Merely descriptive trademarks should be avoided because to be protectable you have to prove that the public has come to recognize the trademark as an indicator of source and not as merely being a description of the goods. Suggestive, arbitrary and coined terms are therefore desirable from a strength standpoint.

This is a hard lesson for many entrepreneurs to learn. Most want to use a product name that enables aperson viewing the trademark to immediately know what the product is. The problem is that because a merely descriptive trademark uses descriptive terms, every knock-off application that surfaces will likely use one or more of the same descriptive terms in naming their product. When that happens, consumers are easily confused into which product to download/use. Thus, it is imperative that you pick stronger trademarks to use with your goods.

Trademark Registration

Provided that your trademark is not generic or merely descriptive (unless secondary meaning exists), it may be worth your while exploring the benefits of trademark registration.

Note: trademark rights vary from country to country. The following briefly explains the benefits of Federal (US) registration for trademarks used in the United States. If you reside in another country, you’ll want to discuss these matters with local counsel.

Why Register?

A trademark user acquires rights in a trademark by using the trademark in commerce, not by registering it. The value of Federal (US) Registration is that it provides a registrant with broad nationwide coverage for the trademark upon the cited goods. Prior users, if any, typically can only cut snippets from this broad blanket of coverage. Federal Registration also puts others on notice as to the registrant’s use, thereby preventing future conflicts by warning off potential users of the same or similar trademarks. An additional benefit is the possibility that the U.S. Patent and Trademark Office (USPTO) would prevent later filed trademark applications from registering that are likely to cause confusion with your trademark.

Trademark Searching

Because US Federal and state trademarks can be infringed, and common law/state unfair competition actions also come into play, a proper trademark search of Federal (US), state (all fifty states if the trademark will be used in interstate commerce), common law, and international trademarks should be made before settling upon a product name. Such a search should be performed regardless of whether or not a trademark application will be filed.

If a potential issue exists with respect to your proposed trademark being likely to cause confusion with a third party’s trademark, knowing that fact before expending thousands/hundreds of thousands of dollars in advertising and branding will oftentimes prevent a tremendous amount of grief.

While an intellectual property attorney’s services are typically needed to perform thorough trademark searches and the interpretation of the results, a cursory search of the Internet for related products, as well as searches of the USPTO trademark databases: www.uspto.gov can be made as you narrow your list of product names to have your intellectual property attorney review.

Consideration of these points should help increase the protectability and ultimate strength of the trademarks you use.