Trademarks-United States

• Author: Christopher P. Bussert - Sherin K. Sakr
• Pages: 1-44

1

I. INTRODUCTION

Trademarks are at the heart of modern-day marketing of goods and

services. Indeed, virtually all industrialized countries including the United

States are increasingly becoming brand-savvy. Although federal unfair

competition law originally protected trademarks only against direct “pass-

ing off,” trademarks no longer merely indicate the origin of their associated

goods and services, but instead have themselves become critical commod-

ities, often identifying a source of licensing, sponsorship, or endorsement.

For example, the driving force in many stock and asset transactions today

is the seller’s trademark portfolio. Trademarks are also often offered as col-

lateral to secure loans, qualify for capital gains treatment, and are prop-

erty of the estate under the U.S. bankruptcy code. Today the importance of

distinctive trademarks is such that they may be among a company’s most

valuable assets.

The owners of well-known trademarks such as Apple, Google,

McDonald’s, Microsoft, and Coca-Cola did not, however, come to enjoy

their assets by chance. Rather, the strength of such trademarks reflects the

culmination of a process beginning with careful selection and ending with

proactive maintenance and enforcement by their owners. Undertaken and

executed properly, such strategies can often yield returns far exceeding

those attributable to other forms of capital investment.

II. BASIC TRADEMARK PRINCIPLES

A. TRADEMARK FORMS AND TYPES

Trademarks can take many forms, including words, numbers, letters,

symbols, slogans, colors, characters, graphic designs, smells, building

shapes, containers, and other three-dimensional configurations, sounds,

Chapter 1

Trademarks—United States

Christopher P. Bussert and Sherin K. Sakr

Bus56056_01_ch01_001-044.indd 1 9/13/16 10:13 AM

2 • The Intellectual Property Handbook

or combination of these items. Possible trademark formats include the

following:

1. Words

English language words such as Apple for computers and Burger King

for restaurant services constitute the most common type of trademarks.

“Coined” words (e.g., Exxon for gasoline products and Quizno’s for restau-

rant services), which are words created by trademark owners, are a spe-

cies of trademarks that are capable of great strength and distinctiveness.

Acronyms, abbreviations, or nicknames (e.g., Maaco for automotive ser-

vices, DQ for restaurant services, and Beetle for automobiles) are recog-

nized species of trademarks as well.

2. Numbers

Numbers alone or combined with letters can be trademarks, provided,

however, that the numbers or number-letter combinations are in fact used

in a trademark sense and not primarily to describe the model, grade, size,

or feature of a product. For example, A-1 for steak sauce, K-10 for flying

discs, V-8 for juices, and 4711 for cologne have each been successfully reg-

istered as trademarks. These, however, are often not considered optimal

trademark choices at their inception, requiring a certain amount of sales

and advertising to gain consumer recognition before achieving trademark

protection.

3. Number and Word Combinations

Telephone number and letter combinations have also been found to be

protectable as trademarks (e.g., 1-800-MATTRESS for bedroom furniture,

1-800-GOT-JUNK? for trash removal services, and 369-CASH for mortgage

broker services).

4. Slogans

In recent years slogans have been increasingly adopted and used as trade-

marks (e.g., Are You in Good Hands? for insurance services and What’s in

Your Wallet? for credit card services).

5. Designs

A wide variety of designs used alone and in combination with words have

been accorded trademark protection (e.g., the Circle K design for conve-

nience store services, the Dairy Queen “red lips” design, and the golden

arches design for McDonald’s restaurant services).

6. Images

Images of real or fictitious individuals have long been used as trademarks

(e.g., the Colonel Sanders image for restaurant services, the Betty Crocker

Bus56056_01_ch01_001-044.indd 2 9/13/16 10:13 AM

II. Basic Trademark Principles • 3

image for bakery products, the Paul Newman image for food products, the

design of a girl with pigtails for Wendy’s restaurant services).

7. Colors

Single colors, combinations of colors, or colors as a part of a design can

be protected as trademarks under certain limited circumstances. A single

color or combination of colors can be recognized as valid trademark(s) if

they serve an ornamental, as opposed to a utilitarian, function and have

obtained a high level of “secondary meaning”; that is, the public has come

to identify the color or combination of colors used in connection with a

good or service solely as signifying a brand. In one of the leading cases

involving color trademarks, Owens Corning was successful in protecting

the color “pink” as a trademark for its brand of fiberglass insulation.

8. Sounds

Marks consisting of distinctive sounds have become an important and

highly recognizable species of trademarks (e.g., the NBC “three chimes” for

broadcasting services and the Intel “five chimes” for computer products).

9. Smells

Smell marks, although somewhat rare, have also been recognized as capa-

ble of being viable trademarks (e.g., “a high-impact, fresh, floral fragrance

reminiscent of Plumeria blossoms” for sewing thread).

10. Three-Dimensional Configurations

Packaging, and the appearance of a product or of structures where ser-

vices are performed, can be protected as trademarks if they are inherently

distinctive or have achieved secondary meaning (e.g., the distinctive shape

of the fluted Coca-Cola bottle, the Hershey’s teardrop-shaped candy, and

the exterior design of White Castle, International House of Pancakes, and

Kentucky Fried Chicken restaurants).

B. TRADEMARK FUNCTIONS

Trademarks convey valuable information to consumers by identifying

goods and services that have been satisfactory in the past while rejecting

those that have not. They reduce the costs (i.e., time, trial and error, and

inconvenience) of acquiring information about particular goods or ser-

vices, because consumers can come to rely on a trademark and the brand

image it conveys in making future purchases. Moreover, because trade-

marks identify goods or services from a single source, they often induce

the trademark owner to provide higher-quality goods and services. Trade-

marks further provide a framework for effective advertising of goods and

services.

Bus56056_01_ch01_001-044.indd 3 9/13/16 10:13 AM