Trade name vs Trademark. What’s the difference?

 question mark

What is a trade name? Is it protected like a trademark? Can another business use the same trade name as yours?

What is a trade name?

In the US, a trade name is the name of a business or company, whether the business is a sole proprietorship, a partnership or a corporation. A trade name is, generally, not protectable as a trademark unless it is actually used to distinguish and identify the goods or services of a company.

Can a name be both a trade name and a trademark? Yes. Many are. For example, the name Sony, when used on a company letterhead, functions as a trade name. When it is used on TV sets sold in stores it is a trademark.

Can a trade name be protected? Yes, it may be protected under state statutes or principles of unfair competition. But it is not protected as a trademark unless it identifies goods or services.

Is it possible for a company to have a trade name that they cannot use as a trademark? Yes, because it is possible for a chosen trade name to be an infringement of an existing trademark already owned by another company. But what if the trade name I choose for my company has been registered through a government agency, and the registration was approved? How could it be an infringement of someone else’s trademark? Moreover, if the name is already owned as a trademark by another company, how could the state possibly approve it for my trade name? The possibility of this happening highlights a common myth regarding “trade name clearance.” The myth is that trade name clearance equals trademark clearance. It doesn’t. They are not the same.

Trade name registration

If I start a business I may use my personal name for the business or I may choose a fictitious name—fictitious because it’s not my real name. This is my business name or commercial name, my trade name, also known as a DBA (Doing Business As) name. I may register this name through the county clerk’s office in the county where I do business or I may register it through the state. Or, I may hire an accountant to incorporate my business and he or she will file my corporate trade name with the state. This filing process often involves a “name clearance” through which the state or local government agency approves my chosen name for the business.

What is the purpose of this name filing with the government? It’s mainly to inform the government, especially those agencies that levy taxes, of the existence of my business. It also can, at least theoretically, prevent me from taking the same name as an existing company, which could be viewed as unfair competition. But this name clearance is by no means exhaustive. Note this comment on the website of Sterne Kessler Goldstein Fox, a law firm in Washington, DC: “The chosen [trade] name is generally accepted by the state agency unless the register already contains a registration for the same name for another company. In general, the agency does not analyze whether a proposed name is similar to a previously registered name prior to registering it as a business name. The agency typically looks only for exact matches within the states registry (and differences in names can be as minor as the use of Corp. versus Inc.). In some cases a state may even allow companies with the same name to register in the state.” [italics added]

By contrast, a trademark search can be far more extensive. A trademark search is not a matter of simply looking for names that are the same, but will look for names that could be confused with each other. That’s why a search will not just look at the names, but will analyze the products or services represented by the names, and how they are sold. The standard for trademark infringement is whether there is a likelihood for confusion. A likelihood of confusion could exist even if the names are not exactly the same. Further, trademarks may actually use the same terms if there is no chance of consumer confusion (for example, Ace hardware and Ace bandages).

Trademark clearance includes checking not only the trademark registry of the US Patent & Trademark Office, but since each state has a trademark registration process, it will also include a search of the trademark registries in all 50 states. If the product or service is to be offered outside the US, a trademark search will include the registries of other countries as well. A thorough search will also include a search of trademarks in the US that may not be registered (trademark rights are acquired through use, not registration).

In understanding the difference between trade names and trademarks, it can be helpful to note that the two terms normally function as different parts of speech: a trade name is a noun, while a trademark is an adjective. For example, Sony Corporation is a trade name when it refers to the company. Coca-Cola Bottling Company is also a trade name. But when used with goods (Sony televisions, Coca-Cola products) these terms are trademarks and function as adjectives.

Is trademark infringement really wrong?

When a company takes legal action over a perceived trademark infringement, it is sometimes accused of being a bully.

A pub in the St. Louis area began selling a drink with a name similar to a Starbucks drink name. So Starbucks sent a cease-and desist letter to the owner. In the world of intellectual property, a cease-and-desist letter is a routine first step in defending a trademark against infringement. These types of letters are sent all the time and are rarely newsworthy.

The sending of the Starbucks letter, however, was picked up by news media and the result was a little storm of bad publicity, with Starbucks being accused of heavy-handedly overreacting. Public sentiment favored the pub owner and the account read like a David and Goliath story.

My first reaction was, “but, trademark infringement is wrong, isn’t it?” My next thought was, “wait a minute, who is overreacting here?” A cease-and-desist letter is not heavy-handed. It’s a warning shot, the smallest warning shot possible, really. It is intended to stop an infringement at its earliest stage, to nip it in the bud, before costly litigation becomes necessary.

As I learned in intellectual property class at the community college, if a company does not vigorously defend its trademarks against even small infringements, it can have a harder time defending them later from more significant threats. Failure to defend a trademark in the early stages of infringement can weaken a trademark suit later in court.

But Americans love an underdog. A little guy is often perceived as the good guy and a big corporation is seen as the bad guy for no other reason than size. It’s a well-worn Hollywood stereotype: small is good, big is bad. The bigger, the badder.

On the other hand, might this little hoo-ha over a Starbucks trademark be more than just an example of the underdog effect at work? Could it also be an indication that many do not view intellectual property as legitimate property? And that infringement is not really wrong? I suspect so.

The truth is, intellectual property, be it a trademark or a copyright, is property in every sense of the word. It can be bought, sold or leased. It can be bequeathed, inherited, left in a will. In some cases it can have great value. It is worthy of protection, just like any piece of property that has value.

If someone broke into the offices of a large real estate company and stole a dozen “For Sale” signs, who would blame the company for prosecuting the thief? Would the company be accused of being a bully, of overreacting? Yet, to a company like ReMax Real Estate its trademarks are far more valuable than a few yard signs. That’s why it is known for aggressively pursuing infringers. A trademark may be one of a company’s most valuable assets. It has been estimated that the Coca-Cola logo is worth 70 billion dollars. Is it any wonder that a company would take measures to protect such a valuable asset?

I believe that many people do not fully appreciate that intellectual property really is property. A house or land, even a car is easier for them to think of as property, because you can see and touch these things. The loss of these is often difficult to recover from financially.

For a business, the loss of valued trademarks could inflict irreparable damage. It is no wonder that for certain types of willful trademark infringement in the US, the penalties can be in the millions of dollars.

 

 

Is a typestyle protected by copyright?

No, it isn’t. At least, not in the United States. On the other hand, a font IS protected by copyright.

Does this seem confusing? If so, it’s because so many people use the term “font” to refer to a “typestyle” or “typeface.” The two terms are really not interchangeable.

A typeface, or typestyle, is a set of letters, including numbers, punctuation and assorted glyphs, that all share similar design characteristics. They may have similar shapes, strokes, serifs and other details. In printed form, they all look to be part of the same family due to their design. In the United States, a letterstyle  does not qualify for copyright registration.

So what is a font? Though many people use the word ‘font’ as a synonym for letterstyle, it is really what is used to produce letters in a form that can be viewed. A font is a piece of software, a program really, that allows a computer to command a printer (or router, or laser engraver, or embroidery machine) to produce the letters in physical form. Originally, a font was a set of metal type pieces in a particular size and typestyle for loading onto a printing press. To create a complete font of type was labor-intensive and expensive. Nowadays, a font is generally composed of unique digital code. This code is protected by copyright, and it cannot be copied without permission from the copyright owner.

Additionally, font names can be protected by trademark law, just like brand names. This is why you can buy a font (actually, a license to use the font) for your computer for printing letters that look exactly like Helvetica, but they are called something else. Someone owns the Helvetica font, the name and the underlying software, and that’s not the license you bought. You bought a license to use a differently programmed piece of software with a different name. But what you print looks just like Helvetica letters, because the Helvetica font owners don’t own what the letters look like, the design.

Of course, this is US law. The laws on fonts and typestyles may  and does vary in other countries.

Helvetica       Helvetica

Helvetica   Swiss

Can logos receive copyright protection?

Many people in the sign industry believe the answer is a simple “yes.”

But the truth is that there is much misinformation passed around in the sign business about intellectual property law in the US. The simple answer to whether logos can receive copyright protection is actually, “yes and no.” For a work to have copyright protection, it must meet a certain level of originality. Most simple logos do not meet the criteria. Many ornate logos do meet the criteria.

Here’s why, from the US Copyright Office—

“What Is Not Protected by Copyright?”  Among other things, “titles, names, short phrases, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, lettering, or coloring…” —Copyright Basics, Circular 1, page 3, US Copyright Office.

populous003

Yesterday I put the Populous logo on a sign for their Kansas City office and I was struck by how simple and generic it looked. Populous is an international architectural firm that dominates the market for designing large sports venues like Yankee Stadium in New York, Wembley Stadium in London, Soccer City Stadium in Johannesburg and many, many others. The company’s logo is simple type with no ornamentation. It does not meet the criteria for US copyright protection.

subway002

The Subway sandwich logo is more ornate. There are embellishments and stylized lettering. Does it have copyright protection? No. Subway tried to get it, but it was denied.

Subway logo denied copyright protection July 16, 2013:

Subway logo denied copyright protection

The well-designed Best Western logo, with its five-sided shield and graphic crown was denied copyright protection in 2006.

Best_Western

Best Western logo denied copyright protection March 7, 2006:

Best Western logo denied copyright protection

More recently, the Geek Squad logo was denied copyright protection in 2012.

Geek Squad

In appealing the decision, Geek Squad claimed that its logo was not much different from the Hot Wheels logo in its level of creativity. The Hot Wheels design had been given copyright protection previously.

Hot Whels

But in its decision, the Copyright Office determined that the Geek Squad design was not in the same category as the Hot Wheels logo, with its flame “pictorial” incorporated into the lettering. What do you think?

Geek Squad denied copyright protection April 13, 2012:

Geek Squad logo denied copyright protection

In the final analysis, to most companies, it doesn’t matter that their logos cannot receive copyright protection. Because trademark law can protect a logo that represents a company’s goods or services. And trademark protection is far more suited to safeguarding logos. Trademark protection is more customized. It’s narrower in its scope in some ways, but more comprehensive in others.

Subway owns the trademark “Subway.” If another sandwich shop calls its sandwiches “Subway” sandwiches, it is likely an infringement, even if the design is different and if its signs don’t look like Subway signs. What if a sandwich shop by another name has signs or logos that look like Subway signs, but they don’t actually say subway? It could still be a cause for a trademark infringement suit from this standpoint as well if the competing logo is confusingly similar. What if another sandwich company used a name that is spelled and designed completely differently but still pronounced subway? It could still be confusingly similar and a possible infringement.

Many companies get trademark protection for their logos both as a word, and a separate registration for the distinctive design of the word, with it shape, colors, etc.

On the other hand, “Ace” is a hardware trademark, but another company owns an “Ace” trademark, too. Ace Bandages. Both words are protected trademarks in their respective industries. Since the two industries are so far removed from each other, what is the likelihood of confusion between the Ace brands? Very little. So both enjoy trademark protection and neither is an infringement of the other.

The criteria for determining infringement has to do with, among other things, whether confusion is likely to be caused in the minds of consumers.

For example, from a distance, red, white and blue stripes on a real estate yard sign could make viewers think the property was listed by the real estate company ReMax, or that the company listing the property was associated with ReMax. So these stripes are protected by a trademark registration. This registration is in addition to other trademark registrations that ReMax has, such as their balloon logo.

Remax stripes

Trademark law protects not just words, but colors, shapes, even sounds associated with products or services. No other telecommunications company can use the T-Mobile shade of magenta in its advertising, for example. The color is protected by trademark. The shape of the Coca-Cola bottle is protected. The NBC chime sound is protected.

Trademark, as opposed to copyright, is not so much designed to prevent copying, but to prevent confusion.

So whether logos can be protected by copyright or not is viewed by many companies as a moot point. Trademark law usually provides all the protection needed.

The Intellectual Property Jungle

Artists, writers and inventors transform ideas into tangible property—intellectual property. Any product of the human mind that can be protected under law is intellectual property. The field of intellectual property is a jungle of rights, protections and rules. It is complex, evolving and often not clearly understood among sign makers. The basic premise underlying this field of law is that by granting a kind of monopoly for a time to people who create intellectual property, creative endeavors are encouraged. There are detractors who claim that intellectual property law does not really work the way it was originally intended. There may be some truth to this, but intellectual property law remains an important component in the body of law in countries the world over.

Ownership of intellectual property can be compared to ownership of other forms of property. The owner of a home, for example, may exclude others from using the home, or from even trespassing on the property. A homeowner can sell or lease a home to someone else, or even leave it to someone in a will. Likewise, an intellectual property owner can sell, lease or will a copyright, trademark or patent.

TRADEMARK, COPYRIGHT OR PATENT?

Do trademarks, copyright and patents protect the same things? No. These are three different animals in IP jungle because they protect different types of intellectual property.

A copyright protects an original literary or artistic work. It protects what the US Copyright Office calls “works of authorship.” A trademark typically protects brand names and logos on products or services. A patent protects an invention.

To illustrate the differences, here is an example found in one of the government’s fact sheets: If you invent a new type of vacuum cleaner, a patent can protect the invention itself. Registering a trademark protects the brand name of the vacuum. A copyright would protect a TV commercial advertising the vacuum or a printed owner’s manual that comes with the purchase.

Of course, these examples are very simple. Intellectual property law is actually very complex and is its own specialty in the practice of law. Attorneys who specialize in it have degrees in both law and engineering.

I took some classes in intellectual property law at a local community college in order to learn some basic concepts and clear up some of my own misconceptions. The classes were fascinating and well worth the money. I learned enough to know that some of the information passed around in the sign industry is either inaccurate or outdated. And I learned enough to know that I should never attempt to give legal advice—ever. Still, the basic concepts underlying copyright and trademark in the US are not super complicated, even if their practical application can be.

I’ve learned, for example, that copyright is actually a bundle of five rights, not all of which apply to the sign and graphics industry. I’ve learned that protection for a logo or brand derives mainly from trademark law, not so much from copyright law. These two protections are sometimes confused by sign makers. It doesn’t help the confusion that sometimes copyright and trademark protections overlap.

Some common beliefs I have learned that are untrue: That everything found on the internet is in the public domain and free to use. The truth is almost the opposite. It should be assumed that everything found on the internet is copyright protected unless specifically stated otherwise. Another misconception is the so-called “poor man’s copyright.” Supposedly, you can mail a copy of your artwork to yourself and leave it unopened on arrival as proof that you are the original artist. This procedure actually proves nothing, except that you mailed an envelope on a certain day. The “poor man’s copyright” has no standing in court.

Further questions: Can you get trademark protection for a color? Which lasts longer, copyright or trademark? Does a domain name qualify as a trademark? I plan future posts to share information on these and other questions.

Trademark—protect it or lose it

Two years ago when a small pub in the St. Louis area began selling a drink with the same name as a drink sold by Starbucks, a cease & desist letter was sent to the pub by Starbucks’ attorneys. Letters like this are sent all the time and it’s pretty much standard procedure as a first step in the world of trademark protection. That would have ended the matter except the pub guy decided to write a sarcastic response to Starbucks which then got media attention and went viral. The little firestorm that erupted over Starbucks’ “heavy-handedness” made it sound like Hitler invading Poland: Starbucks juggernaut attempts to crush poor defenseless pub owner!

Of course, public opinion sided with the pub owner because, (A) he was the underdog and, (B) big corporations are always evil, just like in the movies. (Moral: if you are in business stay a mom-and-pop operation and don’t incorporate).

As a designer, I work with intellectual property all the time. I know why trademarks are vigorously protected by their owners. It’s because trademark protection doesn’t always last if it’s not defended. It’s not like copyright protection, which is automatic and you don’t have to do anything for it to stay in force. And for many companies, their trademarks are the most valuable assets they own. Think about Coca Cola, or Harley-Davidson. The Coke logos are surely worth billions. And Harley? Are their motorcycles really any better than anybody else’s? Their value is in the name more so than the product.

There is a long list of trademarks that have lost protection and have become generic: Hula Hoop, Escalator, Cellophane, Dry Ice, Heroin, Kerosene, Laundromat, Linoleum, Thermos, Trampoline, Videotape, Touch-tone, Yo-yo, Zipper.

Aspirin is generic in the US but still a protected trademark in Canada and Germany.

Many trademarks are being used more and more as generic terms and could be in danger of losing protection: Xerox, Band-Aid, Ping Pong, Astro Turf, Bubble Wrap, Chap Stick, Crock-Pot, Sheet Rock, Skil Saw, Dumpster, Fiberglass, Frisbee, Freon, Jet Ski, Kleenex, Memory Stick, Popsicle, Play-Doh, Plexiglas, Post-It, Q-Tips, Rollerblade, Scotch Tape, Sea-Doo, Shop Vac, Super Glue, Styrofoam, Tarmac, Teflon, Tupperware, Tylenol, Vaseline, Velcro.

It takes effort and constant vigilance to protect a trademark, especially as it becomes more and more well known. The Starbucks lawyers did not use a big stick. They used a little stick. The first stick, really.

And what about the pub owner, poor thing? I think he knew exactly what he was doing. He got the public reaction he was hoping for. He knew what fools people can be (remember: he owns a bar), and that they can always be counted on to be suckers for the little guy. And he manipulated the media perfectly, including NPR. The publicity he received for his tavern was far more than he could have paid for. This guy’s talents are being wasted behind the bar. He needs to be in marketing, or politics. And, of course, Starbucks got what it wanted, too. The pub owner stopped using the drink name in question. This was a win-win for everybody.