Is your trademark "fanciful"?

Is your trademark "fanciful"?

If there is one question that is not asked enough in the realm of intellectual property, it is, “Is your trademark you are considering strong enough?” Trademark registration is granted on a number of bases, one of the most important being the relationship of the mark to the goods and services. It is essential to find a mark as unrelated as possible to your business’s goods or services for the best trademark protection. That relationship, in turn, has an effect on the “strength” of the mark and, therefore, the mark owner’s ability to take advantage of the rights and privileges granted by registration.

There are four categories of word marks which can be registered. 

1) Fanciful - the strongest trademark. The mark has no relation to the business’s goods and services, and that creates a presumption that the mark’s existence is owed to them. Kodak, Polaroid, Kleenex, Twizzler, M&M’s, Snickers, Linux, and Google are examples of fanciful trademarks.  They are unique, made-up words created as trademarks that had no bearing on the related goods (cameras, tissues, candies, computer operating systems, and web site indexing tools).

2) Arbitrary – a strong mark, but weaker than a fanciful mark. The mark has no relation to the product, but the word already exists. “Apple” and “all,” for example, are real words, but there is nothing about Apple or All that might lead a prospective purchaser to associate those words with computers or laundry detergent.

3) Suggestive - the mark suggests something about the product; however, the connection between the mark and the goods or services must still not be completely obvious. Frigidaire, iPad, Xerox, Walkman, and Mercury are examples of marks “suggesting” goods associated with cold air (refrigerators), pads to write on (hand-held computing devices), equipment used in xerography (copiers), a man walking about (portable, personal stereos), and getting somewhere as fast as a Roman god’s messenger (motors, e.g. outboard motors for boats).  Note that some of these examples are unique, made-up words.  However, their lexicographic origins “suggest” something associated with the prefix or suffix.

4) Descriptive - the mark describes the product. This is a very weak trademark that requires "secondary meaning" in order to gain trademark protection. Most descriptive marks do not gain trademark protection. The mark owner must prove that the public can identify that the product comes from the mark owner. The slogan, “The milk chocolate melts in your mouth, not in your hands” is descriptive of any chocolate candy coated with a hard shell, but after many years of continuous use the consuming public associated that slogan with M&M’s chocolate candies, entitling the maker to registration.

Two categories of terms that won’t be accepted for registration are worth mentioning.  Obscenities will be rejected.  A registration application will inevitably be rejected if the word(s) is Generic – words that are the same or equivalent to the goods or services.  These words can never be registered as trademarks, and they are given no protection whatsoever.  Remember that trademarks tell the purchasing public the source of the goods and services, and generic terms can’t convey that information because the source is not distinguishable from other business sources if the mark is generic.  It is also important to keep in mind that it doesn’t matter whether the generic terms are real words or made up words. For example, “apple” is a real word, and Apple was acceptable for registration in connection with computers, but that word may never be the trademark of a grower or seller of apples.  Girlgear is an example of made-up word, but it still can’t be registered as a trademark of athletic apparel (also known as gear) for girls.

These concepts must be kept in mind when considering the right name for marketing purposes in order to develop a trademark that’s just right for each business’s image.

Ironically, some trademarks become generic words.  Aspirin, cellophane, escalator are examples of words that started as trademarks, but have become a part of the vernacular.

The FTC won’t fine my company for violations of advertising laws, right?

The FTC won’t fine my company for violations of advertising laws, right?

Wrong.

Recently, the FTC settled with several companies that one person owned over the amount of minutes received in purchasing calling cards.  The FTC charged in a complaint filed in the U.S. District Court for the District of New Jersey that consumers who purchased the calling cards did not receive the promised amount of minutes per card.  The FTC alleged that the cards delivered an average of only 45% of the advertised minutes due to extra fees.  Those extra fees could be found on the cards, but they were in fine print that was difficult to read. 

The FTC claimed that the agency tested the cards extensively, and that 139 of 141 cards failed to deliver the number of minutes advertised on the point-of-sale posters.  The FTC also alleged that the cards had hidden fees, such as “hang-up” fees and weekly fees. 

All of this is defined as deceptive marketing of the products (calling cards) in violation of the Federal Trade Commission Act, 15 U.S.C. §41.

Instead of fighting the FTC allegations, the New Jersey companies decided to settle.  They agreed to a Consent Order with the FTC, which is an agreement with the FTC in which a company will change its behavior in some manner in order to conform to FTC regulations.  These changes include:

·         Paying a fine of $2.32 million;

·         Being barred from misrepresenting the amount of time consumers will receive from prepaid calling cards;

·         Being required to clearly and prominently disclose any fees or charges; and

·         Needing to routinely monitor the advertising materials displayed by their distributors and the number of minutes of talk time their prepaid calling cards deliver to consumers.

Obviously, the difficult part of this settlement is the amount of the fine.  $2.32 million is a lot for a small company to pay.

More can be read on the FTC’s website at: http://www.ftc.gov/opa/2012/02/millennium.shtm

How can my company avoid these FTC fines?

Ultimately, this answer depends upon your business.  To say “avoid being deceptive” is simplistic and yet exactly what every business must do.  Businesses make claims in advertising.  Those claims must have substantiation.  To substantiate (i.e., back up) the claims in your advertisements means utilizing expert testimony, extrinsic evidence, tests, studies, etc. in advertising. This is so whether the type of claim you're making, or plan to make, is express or implied. Yes, you should be aware of what your ad may imply. So review your ads carefully--preferably with a lawyer with expertise in this area--and be sure that you can back up your ad claims.

Anthony's CLE class schedule

We at Kravitz & Verna LLC would like to thank the Rutgers Law School-Camden (Anthony's alma mater) and the Jenkins Law Library for recognizing Anthony as knowledgeable in intellectual property.

Anthony Verna CLE Lecture Schedule:

Rutgers Law School - Camden:        September 24, 2012            http://rutgerscle.com/         3.0 Credits

Jenkins Law Library:                          October 3, 2012                   http://bit.ly/AVCLE            1.0 Credits