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The Business of Naming Your Business:The Importance of Distinguishing Trade Names and
Trademarks
www.TheKellerLawFirm.com
Presented By: Kelley Clements Keller, Esq.
Cumberland County Bar Association Successful Business Series
What is Intellectual Property?
Intellectual property is a legal concept which refers to the products of human imagination, creativity, and ingenuity that have value in the marketplace and for which exclusive rights are recognized.
Intellectual property laws are strict liability statutes designed to protect intangible assets that contribute to a business’s competitive edge.
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Types of IP
Patents New and useful inventions
Copyrights Tangible expressions of creative ideas
Trademarks Words or symbols that serve as indicator of origin
Trade Secrets Info that derives economic value from being held
secret
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Why Does IP Matter?
Loss of intellectual property rights can be very costly to a new business.
Infringement
Misuse
Failure to police
Genericide
Mitigate risk on the front end
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The New Business:Early Decisions and Early Mistakes
Earliest—and most important—decision:
Choosing a business name
Earliest—and most costly—mistake:
Failing to clear business name for use as a trademark
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Trade Name vs. Trademark
Trade Name:
Legal identity—or official name —under which the business is “doing business”
Trademark:
Identifies the product or service
Indicator of origin
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Trade Name vs. Trademark
May be one in the same:
Nike, Inc. and
The Coca-Cola Co. and
But different function in the marketplace and governed by different rules
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The Trade Name: A State Matter
Secured and regulated at the state level The local state department
PA = Bureau of Corporations and Charitable Organizations
Deemed valid and approved if: 1) not identical or nearly identical to a previously
registered entity; and
2) proper paperwork is completed and filed.
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The Trade Name: Your Rights
Gives exclusive rights to the name:
1) as a trade name (not a trademark), and
2) in that state only.
To use the trade name as a trademark :
Name must also be cleared as a trademark.
Nike, Inc. and NIKE®
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The Trademark: Goods and Services
Trademark represents the product or service
Serves an indicator of origin
Power, strength, and value built through use of the mark in commerce
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The Trademark: Value Through Reputation
Consumers draw an association between mark and product or service (distinct trade name irrelevant)
Strong marks (stronger positive association) valuable marks
The Coca-Cola Co. has used the COCA-COLA brand for 127 years $80 billion brand
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Obtaining a Trademark: Use in Commerce
Rights conferred through actual use of a mark in commerce First to use a mark (in a particular territory) is the
first to own the mark (in that territory)
Unregistered marks (common law marks) Legal protection where mark is used (geographically)
Federally registered marks – use in interstate commerce Legal protection nationwide
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Trademark Availability vs.Corporate Name Availability
Trademarks (whether registered or not) have no state registration requirement
Thus, trademarks will not be discovered through corporate name availability search
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Advising the Client
Avoid adopting a business name with prior common law or registered trademark use
Commission a trademark search and legal opinion from a skilled searcher
Search must cover the records at the U.S. Patent and Trademark Office
Should be extended to cover unregistered common law uses
Will determine availability of name for use and registration as a trademark
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Advising the Client
“Knock-Out” U.S. Patent and Trademark Office Common law Internet search
Comprehensive U.S. Patent and Trademark Office Secretary of State trademark registers General and industry-specific common law resources Business name databases Top-level domain names
including .com, .net, .edu, .org, .biz, and .info
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The Trademark Search and Opinion
Determines availability for use and registration
Discovers potential infringement problems and areas of vulnerability
Without it, a business is “flying blind” and may end up on the wrong end of a cease-and-desist
Defense to a claim of willful infringement –
reduce to innocent and mitigate damageswww.TheKellerLawFirm.com
Putting It All Together
Small, local businesses often assume they need only clear their names at the state level since they only intend to operate locally
Digital space is a new playing field
Small business are no longer anonymous
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Putting It All Together
Federal registration and even pending applications provide nationwide protection Constructive notice
A state trade name registration (or even state trademark registration) will not insulate from liability for trademark infringement
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The Takeaway
Every business owner should ask and answer two questions before selecting a business name:
1) Is my name available for use as a trade name?
2) Is my name available for use as a trademark?
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Wrapping it Up
Questions?
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* Images may be subject to copyright by a third party.
Thank You!
www.TheKellerLawFirm.com
Kelley Clements Keller, Esq.(717) 386-5035
[email protected]@KelleyKeller/YourIPMatters/KelleyKeller