Feb. 28, 2019 • by Jeffrey Pote

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Trademarks and the brands they protect are important business assets, but trademark rights are not always well understood by startups and other small businesses. This is somewhat paradoxical since trademarks are uniquely business-based creations - they cannot exist apart from their use in commerce. They are also a relatively cheap way to increase your business’s value.

Trademarks serve the primary purpose of protecting consumers from confusion.FN1 In other words, trademarks function in business "to distinguish goods as the products of a particular manufacturer or trader and to prevent another from passing off its goods as those of the manufacturer or trader identified by the trademark."FN2

This is why trademark rights generally do not exist until the mark is lawfully used in commerce. As the U.S. District Court of Colorado stated just last December, "neither conception of the mark, nor advertising alone establishes trademark rights."FN3 However, an exception to this general rule is that a trademark not in actual use may be registered with the U.S.Patent and Trademark Office (USPTO) when there is a definite intent to use the mark in commerce.

This is in contrast to copyrights, which arise when an original work is created or fixed in a tangible form. While trademarks need to be used in commerce, trademarks need not be original to be protected so long as they are or have become distinctive.

A laptop displaying the word 'brand' in large block letters sits on a desk in an office next to a cellphone and coffee cup.

This is in contrast to copyrights, which arise when an original work is created or fixed in a tangible form. While trademarks need to be used in commerce, trademarks need not be original to be protected so long as they are or have become distinctive.

So, what makes a trademark distinctive? A distinctive mark is a strong mark, and a trademark can be strong in either of two ways. First a mark may possess what is called 'conceptual strength' or it may have 'commercial strength'. It is important for a mark to be strong since the greater its strength, the greater the protection against infringement.

Conceptual Strength

Conceptual strength is inherent to a particular trademark, which is why it’s sometimes referred as "inherent distinctiveness." While a mark’s conceptual strength exists from its time of creation, a mark may nevertheless have it for some types of goods or services, yet not others. For example, an apple missing a bite may be a strong mark for computer hardware, but not for an apple farm. For these reasons, it is important to understand what makes a mark strong and how to use it when developing a brand, business name, or logo.

In determining the conceptual strength of a mark, one should examine the “the placement of the mark on the distinctiveness or fanciful-suggestive-descriptive spectrum.”FN4 The Tenth Circuit, which includes Colorado, has explained this spectrum in the context of trademarking goods as follows:

In measuring conceptual strength, the spectrum of distinctiveness ranges along the following five categories of marks (from least to most distinctive): (1) generic, meaning that the mark identifies only a general class of goods to which a specific product may belong; (2) descriptive, meaning that it reflects one or more of the product's characteristics or qualities; (3) suggestive, meaning that it suggests or evokes, rather than describes, the nature of the product, requiring " the consumer to use imagination and perception to determine the product's nature" ; (4) arbitrary, meaning that the mark is a word or symbol already in common use that does not have any apparent relation to the product (as in Apple computers); and (5) fanciful, meaning that the mark is a novel word or design that has been coined for the sole purpose of serving as a trademark (as in Kodak or Exxon).FN5

Generic marks - which identify only a class of good or service, like canned tuna or grocery – are best avoided since they are not entitled to any trademark protection. Recall that the purpose of trademark law is to protect consumers against confusion by helping them understand the sources of goods and services. Generic marks are used too commonly in a marketplace by a variety of businesses to fulfill this purpose and as a result are not registrable as trademarks.

Like generic marks, descriptive marks are best avoided since they are generally not entitled to trademark protections...

Descriptive marks are so called because they describe the qualities of goods or services, like "color, odor, function, dimensions, or ingredients."FN6 Like generic marks, descriptive marks are best avoided since they are generally not entitled to trademark protections. For example, the Tenth Circuit has considered "Sinu Cleanse" and "Savmotor" to be descriptive marks for their respective products and therefore not entitled to trademark protection.FN7

However, a descriptive mark, unlike a generic mark, can receive trademark protection when it has acquired a secondary meaning. A mark has a secondary meaning when that mark is distinctive in that it indicates sufficiently the source of the good or service. This happens when the mark has “been used so long and so exclusively” by one business in association with its goods or services that, in the mind of the “purchasing public,” the mark means that the business is the source of the particular product or service. FN8

As a result, a descriptive mark does not initially possess a secondary meaning but must attain this meaning thought advertisement and promotion. For example, the Tenth Circuit has discussed American Airlines, Ford Autos, and Kentucky Fried Chicken as marks which, "at birth," would have been considered inherently weak marks, but which have all become "well recognized by the consuming public."FN9 While it is possible for marks to quickly enter consumer consciousness, such an achievement would likely require significant resources.

Given the difficulties with generic or descriptive marks, it is best whenever possible to create a mark that is at least suggestive. A suggestive mark does not simply describe the qualities of a good or service, but evokes ideas that "require the buyer to use thought, imagination or perception to connect the mark" and the business's goods or services.FN10

The Tenth Circuit has observed that distinguishing “between descriptive and suggestive marks is difficult" and "often based on intuitive reactions rather than analytical reasoning."FN11 For this reason, if you wish to register a seemingly suggestive mark, it is important to seek the advice of competent counsel who can clearly communicate to the USPTO how the mark is more than merely descriptive.

While suggestive, arbitrary, and fanciful marks are all considered inherently distinctive, the best trademarks can be registered as either an arbitrary or fanciful mark. An arbitrary mark is a word or symbol – or some combination thereof - that has a common linguistic use or meaning, but which is used in commerce by the registering business in a way that "neither suggests nor describes any... quality or characteristic" of that business’s goods or services.FN12 In other words, while an arbitrary mark is meaningful, this meaning is so unrelated to the qualities of the business’s goods or services that it is not even suggestive of them – like the word ‘apple’ as related to computer hardware and software.

What if you want to create a mark for your business? Well, that would be a fanciful mark. Fanciful marks are words or symbols that are invented or selected for the "sole purpose of functioning as a trademark."FN13 When the mark is invented, it is called a "coined mark" since it has no common linguistic use or meaning. But, as the U.S. District Court of Colorado held in Wuv’s International, Inc. v. Love’s Enterprises, Inc., a word like 'wuvs' that bears a clear relationship to another word (in this case, 'loves') may still be a fanciful mark.FN14

As suggestive, arbitrary, and fanciful marks are all inherently distinctive, they are regarded as capable of functioning immediately upon use as a symbol of origin...

As suggestive, arbitrary, and fanciful marks are all inherently distinctive, they "are regarded as capable of functioning immediately upon use as a symbol of origin."FN15 As a result, creativity and originality are rewarded in trademarks just as in copyright. By understanding what makes for a strong trademark, you’ll be able to design or develop a brand, business name, or logo that will be an important asset right from the start.

Commercial Strength

But what if you want or already have a mark that’s lacking in conceptual strength? Is your business doomed? Well fortunately for you, a trademark may possess not only conceptual strength, but also commercial strength.

The commercial strength of a mark reflects its recognition in the marketplace and it is generally considered akin to secondary meaning (discussed above).FN16 The difference between the two is that, while commercial strength comes in degrees, secondary meaning is something that a mark either has or it lacks. Thus, a mark without a secondary meaning may still have quite a bit of commercial strength. As discussed above, the commercial strength of a mark can make up for its "conceptual weakness" since "a conceptually weak mark may become strong by virtue of acquired consumer awareness."FN17 However, even a conceptually strong mark "may ultimately be weak if its commercial strength is negligible."FN18

As a result, just as a mark must actually be used in commerce in order to be protectable as a trademark, this use must be significant and exclusive enough that the mark is associated with that business in consumer consciousness – that is, a "substantial number of present or prospective customers understand the mark when used in connection with a business, to refer to a particular person or business enterprise."FN19

Should other businesses make "extensive use of a mark" the commercial strength of that mark would be undermined.FN20 For this reason, it is important not only for a trademark holder to promote the mark, but also to protect the mark. The law places the burden on a trademark holder to guard against any use of that mark by other businesses. A lack of vigilance here could lead to a loss of value in an important business asset.

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FN1: Employment Television Enterprises, LLC v. Barocas, 100 P.3d 37 (Colo.App. 2004) (citing Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989)(holding that "the right created in a trademark… is defined as a right of the public to be free from confusion")).

FN2: Beatrice Foods Co. v. Neosho Val. Co-op. Creamery Ass'n, 297 F.2d 447 (10th Cir. 1961) (citing Avrick v. Rockmont Envelope Co., 155 F.2d 568 (10th Cir. )).

FN3: Dalkita, Inc. v. Distilling Craft, LLC, No. 18-cv-01398-PAB-SKC (D.Colo. Dec. 19, 2018) (but the court notes that advertising or promotion of a brand can establish rights in a trademark when it reaches a large enough scale).

FN4: Water Pik, Inc. v. Med-Systems, Inc., 848 F.Supp.2d 1262 (D.Colo. 2012) (citing Big O Tires, Inc. v. Bigfoot 4X4, Inc., 167 F.Supp.2d 1216 (D.Colo. 2001)).

FN5: Water Pik, Inc. v. Med-Systems, Inc., 726 F.3d 1136 (10th Cir. 2013) (citing Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964 (10th Cir. 2002)).

FN6: Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964 (10th Cir. 2002) (citing Beer Nuts, Inc. v. Clover Club Foods Co., 711 F.2d 934 (10th Cir. 1983)).

FN7: Water Pik, Inc. v. Med-Systems, Inc., 726 F.3d 1136 (10th Cir. 2013).

FN8: Water Pik, Inc. v. Med-Systems, Inc., 848 F.Supp.2d 1262 (D.Colo. 2012) (quoting J.M. Huber Corp. v. Lowery Wellheads, Inc., 778 F.2d 1467 (10th Cir. 1985)).

FN9: Water Pik, Inc. v. Med-Systems, Inc., 726 F.3d 1136 (10th Cir. 2013). These marks would all be weak initially because they involve only terms related to regions, names, or other generic categories.

FN10: Wuv's International, Inc. v. Love's Enterprises, Inc., 208 U.S.P.Q. 736, (D.Colo. 1980) (quoting Educational Development Corporation v. Economy Company, 562 F.2d 26 (10th Cir. 1977)).

FN11: Water Pik, Inc. v. Med-Systems, Inc., 726 F.3d 1136 (10th Cir. 2013) (quoting Educ. Dev. Corp. v. Econ. Co., 562 F.2d 26 (10th Cir. 1977)) (emphasis omitted).

FN12: Wuv's International, Inc. v. Love's Enterprises, Inc., 208 U.S.P.Q. 736 (D.Colo. 1980).

FN13: Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964 (10th Cir. 2002).

FN14: Wuv's International, Inc. v. Love's Enterprises, Inc., 208 U.S.P.Q. 736 (D.Colo. 1980).

FN15: Id.

FN16: Water Pik, Inc. v. Med-Systems, Inc., 848 F.Supp.2d 1262 (D.Colo. 2012) (citing Donchez v. Coors Brewing Co., 392 F.3d 1211 (10th Cir. 2004) (calling commercial strength "a concept analogous to secondary meaning").

FN17: Water Pik, Inc. v. Med-Systems, Inc., 726 F.3d 1136 (10th Cir. 2013).

FN18: Id (citing George & Co. LLC v. Imagination Entm't Ltd., 575 F.3d 383 (4th Cir. 2009) (assuming that the mark "LCR" was suggestive but ruling that it was weak because the record lacked adequate evidence that consumers associated it with plaintiff)..

FN19: Water Pik, Inc. v. Med-Systems, Inc., 848 F.Supp.2d 1262 (D.Colo. 2012) (quoting 1-800 Contacts, Inc. v. Lens.com, Inc., 755 F.Supp.2d 1151 (D.Utah 2010)) (emphasis omitted).

FN20: Id.