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KingHippo
08-11-2008, 01:17 PM
I would guess that the first trademark I should get is the name of my business. Should I register the trademark as an individual first and then create the LLC or create the LLC first and then register the trademark as a corporation?

Evan
08-11-2008, 05:44 PM
That assumes that your trademark isn't already taken. In most ordinary small businesses, there is no need to trademark your logo or brand. Having a trademark doesn't prevent another company or individual from using it -- in which case, you'll have to successfully defend the trademark infringement in court. That's not cheap.

vangogh
08-15-2008, 02:28 AM
Evan do you think if you created a product it would be wise to trademark it? Say I developed a software application. Would you suggest applying for a trademark or do you think the cost is still prohibitive?

Evan
08-15-2008, 06:15 PM
If you create a product, such as software, I'd probably patent it. Trademarks deal strictly with the branding of it.

So the eBay logo or Google logo is trademarked.

I'd only deal with a patent or trademark if I thought it'd be a large scale product, or if it was innovative where I think others would copy it. Legally, anybody can still steal your stuff. It's your job to defend it in court, and that can be costly. [Lawyers are never cheap!] And from an accounting perspective, these costs end up being amortized over a period of time, and depending on the outcome of a lawsuit, your patent or trademark may be impaired afterwards.

vangogh
08-15-2008, 08:41 PM
Makes sense. I'm working on some things and wasn't expecting to patent or trademark it, but thought I'd ask to get your opinion. I'm sure what I'm doing isn't patentable and I doubt it will grow to the point where trademarking the name makes any sense.

It's an interesting discussion though. I think many people rush to think they should grab a patent of trademark for fear someone will steal what they have not realizing that in general it probably isn't going to be legally stolen and that a trademark only protects you if you spend the time and money to defend it. Makes sense for Google and eBay, but not for most small businesses.

Evan
08-15-2008, 10:01 PM
Well they expect it to be sort of like a battery (what most know as an assault). If I hit you, I'm arrested and the state charges and prosecutes me.

If I steal your trademark, you'd have to KNOW I stole it, and have to sue them. It's all civil, not criminal.

vangogh
08-15-2008, 10:06 PM
True. The reality is very different from the expectation for many. For the most part I have a hard time seeing why a small business would apply for a trademark. I think it's usually more an ego thing where it makes them feel good, without realizing it's not nearly the protection they think.

Steve B
08-16-2008, 05:41 AM
It cost me $10 each to Trademark my business names. It was a simple one page form that I filed myself. I'm sure it's a bit of a deterrent and it would be helpful if someone locally starts using my name.

I will definitely defend my business names. Sure lawyers are expensive - but, you're assuming you have to go through the entire legal process. In many cases a simple cease a desist letter from an attorney will resolve the problem. My attorney probably wouldn't charge me for it.

I was even on the other end (I rec'd. the cease and desist letter) when I first started my business. I picked a name that was trademarked by another company and I had to stop using it. I picked another name immediately - didn't cost them anything but the letter and a stamp.

vangogh
08-16-2008, 11:17 AM
I think the thing is you still need to spend the time to find out if someone is using your name and there could always be the company that does make you go through the legal system.

If it offers some protection the cost seems worthwhile, but if others are using your name and you don't stop them you I think you can lose the trademark.

Evan
08-16-2008, 02:29 PM
And you could save yourself $10 by not trademarking the name. As an LLC, or even a corporation, states will not allow deceptively similar names, especially if you're doing the same thing.

Your trademark is worth whatever you're willing to pay to defend it. If that is only the cost of a letter and stamp, then so be it.

Aaron Hats
08-16-2008, 02:52 PM
I want to trademark our tag line..."get a hat on" and license it for use. That way anytime a mother yells at her child to "get a hat on" before you go out I can charge them a royalty fee? How's that for multiple streams of income.

Steve B
08-16-2008, 03:19 PM
Evan - Your name is a significant part of your brand. I can't imagine not being willing to spend a significant amount of money to defend it. Are you suggesting that a business shouldn't spend even $10 on a trademark?

VG - I would probably know within a week or two if someone was using my name (or something similar) in my area. In my case it would only be someone local that would be an issue and my trademark is only registered within my state - so finding out would not require any effort at all (I'd probably get a call from a friend or customer).

vangogh
08-16-2008, 04:46 PM
@Aaron - brilliant and funny

@Steve - You might know in your area, but would you know in mine. You still need to fight someone here in Colorado using your name to protect your trademark. You might find out about them if they were online, but what if they weren't.

Are you talking about regsitering for a trademark or registering a trade name with the state? I think you might mean the latter. A trademark is more than $10 (http://www.uspto.gov/web/offices/ac/qs/ope/fee2007september30_2008august01.htm#tm)

I absolutely agree with registering your business name with the state. Makes sense to keep others from using your name and if they register first they could stop you from using your own name.

Trademark, though is the reason Google has to occasionally sue someone for telling others to google something when they want to search for it.

Here are some basic facts about Trademarks (http://www.uspto.gov/go/tac/doc/basic/) I found since we're talking about them.

Evan
08-16-2008, 09:12 PM
Evan - Your name is a significant part of your brand. I can't imagine not being willing to spend a significant amount of money to defend it. Are you suggesting that a business shouldn't spend even $10 on a trademark?

I would pay to defend it, but as noted sometimes a letter or the threat of legal action is all you need. Very few people want to deal with court.

Steve B
08-16-2008, 09:27 PM
VG - They can use whatever name they want in CO or any state other than KY. My trademark is only for the state of KY. If they use the same name in any other state I wouldn't care - nor, would I have any right to defend it. It is a Trademark - not a registration of a business name. Perhaps you are confusing a state trademark (or service mark) with a federal trademark. My trademark is signed by the Secretary of State of KY - and it lasts for 5 years - so it was only $2 per year and it provides very concrete proof as to when I started using the name.

vangogh
08-16-2008, 09:39 PM
I see what you're saying. I was talking about federal trademarks. I found this which links to all the state trademarks (http://smallbusiness.findlaw.com/trademark/trademark-registration/state-trademark-info-links.html). For some reason I thought trademarks needed to be done on a federal level and not a state level.

What protection does your trademark give you that a trade name doesn't? And just out fo curiosity say I was registered for a federal trademark using the same name you used in a state trademark? Does my federal mark supersede your state mark?

Steve B
08-16-2008, 10:04 PM
I don't really know for sure. But, I see that when I applied for it I had to declare that "no other person has registered, either federally or in this state, ..." That was easily accomplished by searching both the federal trademark database and the state database. I'm guessing if someone applied for a federal trademark after I had mine registered they would be prevented from using it (assuming they have to make a similar declaration). In addition to a simple one page application - I also had to submit three specimins showing actual use of the mark.

Just for clarification - the name Derby's Pet Fence is registered as a "Service Mark" because of the nature of the business (service). My other business, Bluegrass Values (direct mail coupon magazine) is registered as a "Trademark" I guess because there is more of a tangible product associated with it. The applications are identical - it was just a different box to check off.

vangogh
08-16-2008, 10:18 PM
I wonder if that's true. I would think the federal trademark would supersede the start mark.


no other person has registered, either federally or in this state

so you're not required to find out if it was registered in a different state and you can't register if someone holds the federal mark. Something tells me the federal mark is going to take precedence over the state mark even if it's registered after, but I'm hardly a lawyer so really just guessing.

Hopefully we can get a lawyerly opinion to clear it up.

Steve B
08-17-2008, 05:35 AM
"so you're not required to find out if it was registered in a different state". Correct - but, since a state trademark doesn't apply in any other state what would be the point?

I'm sure you could just get a copy of the federal application and see what it says. I would think it would be easy enough to find out without being a lawyer.

Business Attorney
08-18-2008, 07:02 PM
I generally agree with Evan but in this case I disagree strongly with many of his recommendations dealing with trademarks. Trademarks are not cheap (the filing fee alone is $325 per class for filing a Federal registration) but for anyone who intends to develop a potentially valuable trademark, I think that filing a federal registration is very important. To explain why, I would have to write a very long post, essentially a whole article on the topic. I don't have time now, but I'll try to give at least a few reasons later.

vangogh
08-18-2008, 07:59 PM
David do you know the differences between the federal trademark and the state level trademark? I would think that a federal trademark takes precedence, but I haven't been able to find anything to corroborate in my admittedly limited research.

Also what protection does a state level trademark offer over registering a trade name?

Thanks.

Evan
08-18-2008, 08:51 PM
I generally agree with Evan but in this case I disagree strongly with many of his recommendations dealing with trademarks. Trademarks are not cheap (the filing fee alone is $325 per class for filing a Federal registration) but for anyone who intends to develop a potentially valuable trademark, I think that filing a federal registration is very important. To explain why, I would have to write a very long post, essentially a whole article on the topic. I don't have time now, but I'll try to give at least a few reasons later.

I don't think we disagree much on this. There are times where trademarks are important and for many businesses they aren't. But if there is the goal of "going big" and becoming the next Microsoft, Google, etc., than I'd say registration can be critical. Seeing as many small businesses are content with being local or just expanding the size to that area, it's not needed.

But while trademarks are costly, and rightfully so, you need to have the money to defend them. So if you're squeezing $325 for the trademark, and hoping that it is all you need, then there will be issues if I stole your trademark.

Business Attorney
08-18-2008, 10:24 PM
Here are some thoughts on when I think that a business, even a small business, should consider registering its U.S. trademarks at the Federal level:

Do you think you'll ever want to expand your business to another location?


The holder of a federal registered trademark has all rights to the trademark throughout the United States, excepting only previously existing "common law rights." Your common law right to your marks extend only to the area that the existing marks were being used at the time the application was filed. In other words, if someone applies for and receives a trademark registration for your unregistered mark, your use is limited to what you were doing as of the effective date of the registered mark. The scope of your trademark cannot be expanded once the federal registration takes effect.


Do you think you'll ever want to sell your business?


Many buyers look at the seller's trademark protection when conducting their due diligence. If they view your trademark as a key component of your goodwill, the lack of a registration may reduce the value of your company because it increase the buyer's risk of a competing mark.


If you receive a cease & desist letter from a trademark holder, are you in a position to defend yourself in a cost efficient manner?


Pointing out that you hold a registered trademark is often sufficient to make a claim of infringement disappear. Proof of your common law rights may also refute the claim, but it will require good planning and good record keeping. If your trademark and corporate name are the same, your articles of incorporation may do the trick for you, though a knowledgeable opponent will understand that your business name does little or nothing to prove the extent of your common law trademark rights.


Do you want to protect your trademark as a domain name?


The ICANN domain name dispute resolution process requires that the complaining party show that he has trademark or service mark rights in order to require the owner of the offending domain to submit to a mandatory administrative proceeding. Proving a registered mark is easy; proving common law rights can be very difficult.


Is your mark relatively costly to replace?


If your mark can be changed by simply repainting a sign and replacing a graphic file of your website, the cost of securing your trademark may outweigh the cost to replace it. On the other hand, if you will need to replace all your letterhead, envelopes and invoices, reprint your marketing materials, repaint your delivery trucks and toss out all those coffee mugs and baseball caps that have your trademark on them, then spending a little money to get a registered trademark may not be a bad idea.


If you answered "no" to all these questions, then you may save a few bucks and choose not to get a trademark. Of course, you should also keep your fingers crossed because these are not the only reasons why getting a trademark is a good idea.


If you answered yes to even one of the questions, then you should carefully weigh the costs and benefits of pursuing a trademark application.

Business Attorney
08-18-2008, 10:37 PM
David do you know the differences between the federal trademark and the state level trademark? I would think that a federal trademark takes precedence, but I haven't been able to find anything to corroborate in my admittedly limited research.

Also what protection does a state level trademark offer over registering a trade name?

Thanks.

In most states (if not all), filing at the state level is virtually meaningless. The state filing simply puts people on notice of the trademark owner's common law rights. Unlike the federal Lanham Act which gives the owner of a registered mark both substantive and procedural rights, the state laws that I am familiar with do neither. A filing under state law may help establish facts like the date your mark was first used, but it has little bearing beyond that.

State laws can vary widely from state to state and I certainly don't claim to know the trademark laws of all 50 states, but I would be reluctant to put much reliance on a state filing unless it was clearly shown to have some specific benefit.

vangogh
08-19-2008, 01:22 AM
Thanks. I appreciate the added insight.

The impression I'm getting is that most small businesses probably don't need to apply for a trademark, but under certain situations it might make sense. And that if one is going to register for a trademark it's best done on the federal level and not the state level.

Steve B
08-19-2008, 04:53 AM
I come to a different conclusion. I would think, at a minimum, that most small businesses hope to sell their business someday and have a lot of printed marketing material they would prefer not to replace. And, a lot of small businesses would also have to pay someone to change their website and possibly their domain.

Thanks to David's post, I'm going to get busy on the federal application. In my case, I have letterhead, business cards, a $3,000 vinyl job on my van etc. The most expensive thing to replace - which David didn't even mention is the name recognition that I've built up over the years.

If $325 is too expensive, you may want to consider the much cheaper state application. The state trademark may be the only option for some businesses if they aren't involved in interstate commerce. Even if it doesn't provide much official legal protection (depending on your state) just the one benefit that David mentioned is well worth $10.

I think the state may carry more weight than might appear on the surface, Based on what I've read about the requirements for the federal application - you can't even apply for a trademark if it is already being used elsewhere. Having it on file with one of the 50 states would certainly make it hard to say it isn't being used elsewhere. Hopefully, the state records get reviewed before an application is approved.

I guess it's all relative. I think $325 is very cheap. Remember, it's good for up to 10 years (if you file an affadavit at 6 years stating it is still in use) - that's pretty cheap insurance on an annual basis. Luckily, I sell stuff across state lines, so I'll be allowed to apply for this protection.

Business Attorney
08-19-2008, 09:47 AM
vangogh and Steve B draw different conclusions. I don't have enough empirical evidence to know what "most" small businesses do. Many businesses will benefit from a trademark registration, but many will not. My recommendation is to disregard what is right for most small businesses and just look at the factors that apply to YOUR small business.

I would like to correct one statement that Steve B made in his otherwise excellent post: "you can't even apply for a trademark if it is already being used elsewhere." That is absolutely and positively wrong. The fact that one business is using a trademark in one state or region ordinarily has no effect on the granting of a federal trademark. There are exceptions, but for a small business you can assume that rule is black and white. If you own Bart's Best Barbecue in Louisville, Kentucky, someone else can still get a Federal mark which will box you into your local market.

In fact, a registered trademark at the Federal level doesn't bar another person from registering the same mark for different goods and services. That is why you can have Apple Computers, Apple Vacations and Apple Car Rental.

In addition to the questions that I listed in my previous post, there are many other questions that will further help a small business decide whether to register.

What are the chances someone will even want to use your mark? If your mark is catchy and has a broad application, the chances are pretty good someone will like the name. In most cases I have seen, it is not even a matter of copying. Two businesses independently come up with the name themselves and both think that they are the only ones to have ever thought of the name. If your mark is unique to you, on the other hand, the chances may be very small. For example, the odds of another law firm being named "Staub Anderson Green" are so infinitesimally small that I think protecting my firm name with a federally registered mark would simply be a waste of $325 even though we could easily spend that much on a single box of letterhead if we ever had to change the name.

Even if someone might use the name, do you really care? If you are a franchisee, for example, your own business name is basically irrelevant. You are building on the trademark of the franchisor.

Another thing to consider is whether the mark can even be registered. As Steve noted, it first must be used in interstate commerce (though that is not as big a hurdle as it sounds). More important, the name cannot be merely descriptive. If your name is "24 Hour Plumbing Services," that will never be accepted as a trademark.

Not every small business should register its marks. Many who don't register their marks, however, should be doing so and simply are not aware of the many benefits that come with registering.

vangogh
08-19-2008, 12:44 PM
Thanks again David. My conclusion wasn't all that far off from Steve's actually. I can see where there are exceptions and like I said under certain circumstances I think it might make sense for small businesses to apply for the federal trademark. I hope I didn't imply that wasn't the case.

I would think though that for many of us applying for and fighting to keep the trademark could be more trouble than the protection it gives us. It depends on your business of course and it depends on what your plans for the business are.

I'd also think the majority of small businesses operating in the U.S. now and in the past didn't get trademarks. Not that you should just do what the majority do, but not having one hasn't seemed to be an issue for most.

It's really up to the business whether or not they think it's necessary. I can see pros and cons for both sides.

vangogh
08-25-2008, 08:57 PM
Oddly enough since we were discussing trademarks and trade names here, today I received something in the mail to let me know my trade name needs to be renewed. Eerie coincidence?