For many business owners and individuals, trademarks are an afterthought. This ill-advised approach often leads to significant risk and expensive consequences. Below are five of the most common trademark-related mistakes that people make.
- Assuming Formation of a Legal Business Entity Provides Trademark Protection
One of the most common misconceptions is that forming a legal business entity, such as a corporation, limited liability company, or limited partnership, in one or more states confers exclusive trademark rights to the business name or a portion of the business name. It does not.
Formation of business entities is a corporate governance matter. It does not establish trademark rights or protection against trademark infringement. Notably, a trademark infringement lawsuit in the United States typically costs at least $350,000 to defend.
To properly establish trademark rights, one should pursue filing for a federal and/or state trademark for their brand in conjunction with its goods and/or services.
- Failing to Conduct a Comprehensive Trademark Search
A preliminary Google search or domain availability check is not sufficient to determine whether a trademark is available for use. Even a quick search done through the United States Patent and Trademark Office (USPTO) trademark search records is not reliable because it consists of complex, Boolean search methods.
Therefore, it is always suggested to conduct a full United States domestic clearance search report. Although this may be slightly expensive, it is better to know whether your trademark is available or not at the beginning of the process, rather than having to rebrand and start from scratch.
Said comprehensive trademark search report involves reviewing federal trademarks, state trademarks, common law uses (e.g., via Instagram, Facebook, etc.), to determine whether one’s potential trademark is identical or confusingly similar to any other trademark covering related goods or services. Under United States trademark law, trademarks are considered under a “likelihood of confusion” analysis, so it is critical for businesses to ensure their trademarks are distinguishable enough from other registered and pending trademarks to avoid risks of trademark infringement.
- Filing for a Trademark with an Overly Narrow Scope
There is a total of 45 USPTO classes of goods and services one can file their trademark in: 34 classes of goods and 11 classes of services. Filing in the wrong class(es), or not filing in enough classes, of goods and services can lead to a major lack of trademark protection and potentially trademark infringement.
For example, if your business is selling non-alcoholic beverages, gummies, and cosmetics, and you file a trademark only for the beverage and edible goods (not the cosmetics), then someone else with an identical or nearly identical trademark could seek registration of their cosmetic goods since cosmetics and beverages/edibles are typically not considered to be related goods. This could potentially dilute your brand and/or require you to spend a substantial amount of money to oppose or cancel the later-filed cosmetics trademark application.
Therefore, it is suggested to file a trademark for at least all goods and services that one is currently selling and/or providing in interstate commerce. Additional trademark filings are certainly acceptable; however, they carry the risks discussed herein and are more expensive than just one original and comprehensive filing.
- Improper Use of and Failure to Maintain the Trademark
Securing a trademark registration is not the final step in the trademark process. Consistent use of the trademark in conjunction with its goods and/or services in interstate commerce is required to maintain and enforce one’s trademark rights. Improper use, such as altering the verbiage of a word mark or utilizing inconsistent variations of a design or logo mark, removes one’s trademark protection.
Further, in order to preserve one’s exclusive rights to their trademark post-registration, maintenance filings are required with the USPTO, which are critical for preserving legal protections, deterring infringers, and ensuring one’s trademark remains a valuable business asset. Failing to meet maintenance deadlines can result in costly revival attempts or even cancellation of one’s trademark registration.
- Delaying Enforcement Against Trademark Infringement
Proactive enforcement of one’s trademark rights is strongly encouraged. Allowing others to infringe on one’s trademark rights can lead to trademark dilution and jeopardize future legal actions against such infringers. If one does not take action against an infringer, the infringer strengthens their brand and market presence, making enforcement more difficult and costly. Timely enforcement is critical to maintaining the strength and exclusivity of a trademark.
Conclusion
Trademark protection is not merely a legal formality—it is a foundational component of a business and its brand strategy. The cost and time it takes to avoid these five common trademark-related mistakes is minimal compared to the potential financial and operational disasters they can cause.
Due to the complexities in maintaining trademarks, guidance of counsel is strongly recommended.
Paul Stevenson is a senior associate attorney with Ritter Spencer Cheng PLLC who practices trademark law and successfully secures registration of numerous federal trademarks for his clients and manages worldwide trademark portfolios.
Blog Disclaimer: This blog is for informational purposes only, and we are not providing legal guidance, so please consult with an attorney for specific legal advice.
