You and the Law

Intellectual property is an intangible. Unlike personal or real property, the right of possession lies over a mere mental concept. There are four main categories of intellectual property, namely, trademarks, trade secrets, copyrights, and patents. This month, we will focus on the trademark category, since experience indicates it is often the most essential to the everyday business person.

A common scenario is for a small business person to retail both high end name brands along with other brands that are similar in appearance but substantially more cost effective. Often, with the facilities provided by websites like EBay, much of that new retailing is done through electronic commerce. Many such e-commerce retailers are made aware of trademark laws for the first time when the trademark protected name brands, resenting the competition posed by these small retailers, send letters threatening lawsuits over alleged trademark infringements.

So, what is a trademark?

A trademark, generally, is a distinctive word, symbol, phrase or feature that a seller of goods or services will rely upon to distinguish its own goods or services from those of competitors. Famous trademarks include, Exxon, Xerox, IBM, Nike, Pepsi, and John Deere. However, as stated, trademarks can also be used to distinguish services, and in such instance the mark is more appropriately referred to as a “service mark.” However, for economy of language, the term trademark will be used in this article to encompass both types.

Another point to emphasize in the above definition of a trademark is how it can encompass not just distinctive words, phrases, and symbols but other product features as well. For example, the classic shape of a Coca- Cola bottle has come to be associated with the product. Likewise, even the mere color pink has come to be associated with the Owens-Corning fiberglass insulation. Courts have accepted that in the realm of fiberglass insulation products, the color pink is a distinguishing feature of the Owens-Corning version. As such, the color pink for fiberglass insulation is accepted as a “trade dress” worthy of trademark protection.

However, the everyday retailer should not worry that there could be innumerable trade dress infringements in the competing products they sell. Only those product features that have acquired secondary meaning (i.e., created an association in the consumer mind between the product feature to the specific brand of product) could be worthy of rademark protection. Secondly, and more importantly, product features that are functional are not worthy of trademark protection. As an example, an oval shaped container that serves to distribute compression forces and protect the product from breakage could not serve as a trademark—to do so would prevent other competitors from the utility of such a packaging feature. [If the product feature bears such utility and also novelty, the developer of such a feature might consider protection via patent laws, but that is a topic for a future article.] In short, broad trade dress features like the color pink are rarely considered trademarks and the overwhelming concerns will revolve around words, phrases and symbols.

So what types of words, phrases or symbols qualify as trademarks?

It can not be stated too often in the realm of trademark law that in order for a word, symbol, or phrase to qualify as a trademark, it must be distinctive. By that it is meant that the mark (i.e., word, phrase, symbol, or feature) must be capable of identifying the source of a particular product or service. With such a definition in mind, the layman’s perspective should generally be sufficient to make an initial assessment—after all the “reasonable consumer” of the product or service in question forms the frame of reference for judging the scope of a trademark, thus the everyday layman is likely to have the requisite reasonable consumer awareness of the product market.

However, it is worth mentioning that courts have traditionally grouped trademarks into four different categories, with each category receiving differing degrees of trademark protection. The first category receives a high degree of trademark protection and relates to marks that are “arbitrary or fanciful.” Such a mark bears no logical relationship to the underlying product. For example, the words “Lexus,” “Zerox,” and“McDonalds” bear no inherent relationship to the products they identify, namely, automobiles, copiers, and fast food. Courts give such arbitrary or fanciful marks a high degree of protection from infringement on the rational that such marks are inherently distinctive (i.e., capable of distinguishing an underlying product from competitors).

The second category is for suggestive marks. These types of marks are not completely arbitrary in that they do have some relationship to the product bearing the mark. For example, “Coppertone” would bear some relationship to sun-tan lotion since it would connect the mind of the consumer to the copper tone of a sun tan. However, the relationship requires some exercise of imagination to make such an association of the word “Coppertone” to the underlying product, suntan lotion. That additional exercise of imagination on the part of the consumer is sufficient basis for such marks to also receive a high degree of protection.

In contrast to “suggestive marks,” which describe a product only indirectly through the additional step of the consumer exercising some degree of imagination, a “descriptive mark” directly describes, rather than suggests, a characteristic or quality of the underlying product (e.g. its color, odor, function, dimensions, or ingredients). For example, “Holiday Inn,” “Chinese Restaurant,” and “Automotive Center” describes some aspect of the underlying product or service—in these examples the phrases describe the type of hotel rooms, the type of food served at the restaurant, and the type of services rendered, respectively. Unlike arbitrary or suggestive marks, descriptive marks are not inherently distinctive and are protected only if they have acquired “secondary meaning.”

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