What is a trademark in business?
Trademarks are a common term in the world of business and marketing.
You might have heard the term “trademark” used in commercials or seen it on product packaging.
But have you ever wondered what a trademark is and why it’s so important for businesses?
In this article, you will learn the meaning of a trademark and its significance in business.
By the end, you’ll understand what a trademark is, how it works, and why it matters.
So, let’s dive in!
What Is a Trademark? – What Is a Trademark in Business
A trademark distinguishes a particular product or service from similar products or services in the marketplace.
In other words, a trademark helps customers to identify and remember a specific brand or company.
For example, the Nike “swoosh” logo is a trademark that identifies Nike’s products,
Also, Nike has the phrase “Just Do It” trademarked.
Trademarks play a crucial role in business because they help protect a company’s brand and reputation.
By establishing a distinctive trademark, a company can set itself apart from its competitors and build brand recognition and loyalty among customers.
So, when consumers see a trademark, they know what to expect from that product or service and can trust that it meets certain quality standards.
Types of Trademark in Business – What Is a Trademark in Business
Businesses can use several types of trademarks to protect their brand identity.
Here are some of the most common types:
Word Mark
A word mark is a type of trademark that consists of a word or phrase.
Some examples of word marks include Coca-Cola, Google, and Amazon.
Design Mark – What Is a Trademark in Business
A design mark is a type of trademark that consists of a logo, symbol, or design.
Some examples of design marks include the Nike swoosh, the Apple logo, and the Mercedes-Benz emblem.
Combination Mark
A combination mark is a trademark that combines words and a design element.
Some examples of combination marks include McDonald’s golden arches, Starbucks’ mermaid logo, and Pepsi’s circular logo.
Service Mark – What Is a Trademark in Business
A service mark is a type of trademark that identifies a service rather than a product.
Some examples of service marks include FedEx, American Airlines, and Visa.
Collective Mark
A collective mark is a type of trademark that identifies a group or organization.
Some examples of collective marks include the Boy Scouts of America and the NFL Players Association.
Certification Mark – What Is a Trademark in Business
A certification mark is a type of trademark that indicates that a product or service meets specific standards or qualifications.
Some examples of certification marks include the USDA Organic seal and the Good Housekeeping Seal of Approval.
Things That Cannot Be Trademarked in Business – What Is a Trademark in Business
Businesses can trademark some phrases, words, symbols, and designs, while they cannot trademark other things.
Here are some of them:
Some Generic Terms or Phrases
You cannot trademark any generic terms or phrases describing the product or service.
For example, a company that sells apples cannot trademark the word “apple” to prevent other companies from using it to describe their apples.
Descriptive Terms
You cannot trademark any descriptive term simply describing the qualities or characteristics of the product or service.
For example, a company that makes soft, fluffy pillows cannot trademark “soft and fluffy” to prevent other companies from describing their pillows similarly.
Surnames or Personal Names
You cannot trademark surnames or personal names.
However, if a name has acquired distinctiveness in the market through use, it can qualify for registration.
For example, “Johnson & Johnson” is a well-known brand name with a surname and is trademarked because it has acquired distinctiveness in the market.
Geographical Locations – What Is a Trademark in Business
It is not possible to trademark geographical locations.
However, if a mark has acquired distinctiveness in the market through use, it can qualify for trademark registration.
For example, “New York Style Pizza” is a well-known brand name with a geographical location.
It has been trademarked because it acquired distinctiveness in the market.
Some Symbols or Designs
Symbols or designs that are too similar to existing trademarks or lack distinctiveness cannot qualify for trademark registration.
For example, a company that sells computers cannot trademark a logo that looks very similar to the Apple logo.
Offensive or Scandalous Words or Symbols – What Is a Trademark in Business
It is not possible to trademark offensive or scandalous words.
For example, a company cannot trademark a logo with a vulgar word or an offensive symbol.
Some Words or Symbols
You cannot trademark any word or symbol falsely suggesting a connection with a person, institution, or organization.
For example, a company cannot use a logo that suggests a connection with a charity organization without permission.
National and Official Symbols or Signs – What Is a Trademark in Business
You cannot trademark national flags or emblems.
Additionally, you cannot trademark official symbols or signs the law protects.
Understanding what can and cannot be trademarked is important for businesses.
This way, they will protect their brand and avoid infringing on the rights of others.
Trademark Taxation in Business – What Is Trademark in Business
Registering a trademark with the government gives the business exclusive rights to use that mark in its operations.
Regarding taxes, a business may be able to claim deductions related to its trademark.
For example, registering a trademark with the government may be tax deductible.
In most cases, the legal fees associated with protecting the trademark from infringement may also be tax deductible.
Additionally, expenses related to advertising and marketing the trademarked products or services may also be deductible.
However, note that the government does not tax the trademark itself.
Rather, the government subjects the income generated by the business to taxation.
This means that a business with a trademark is subject to the same tax laws and regulations as any other business, regardless of whether it has a trademark.
Laws Protecting Trademark in Business – What Is Trademark in Business
The laws surrounding trademarks are designed to protect businesses from having their marks (or similar marks) used by others without their permission.
Here are some key laws surrounding trademarks:
Trademark Registration
A business can register its trademark with the United States Patent and Trademark Office (USPTO).
This gives the business the exclusive right to use the mark in connection with its products or services in the United States.
Trademark Infringement – What Is a Trademark in Business
If someone uses a mark confusingly similar to a registered trademark, it may be considered trademark infringement.
So this means that the person is using someone else’s mark without their permission.
Likelihood of Confusion
When determining whether trademark infringement has occurred, courts will consider whether there is a likelihood of confusion between the two marks.
Factors that are considered include;
- the similarity of the marks,
- the similarity of the products or services,
- and the degree of care consumers would reasonably exercise when purchasing.
Trademark Dilution – What Is a Trademark in Business
A business can also take legal action if someone uses its mark to dilute its value.
This might happen if someone uses the mark to make it less distinctive.
Or if they use it to promote a different product or service unrelated to the original business.
Trademark Renewal
A trademark is not a permanent right – it has to be renewed periodically.
In the United States, trademarks are to be renewed every 10 years.
If a company fails to renew its trademark, it may lose its legal protection and the right to use it.
International Trademark Protection – What Is a Trademark in Business
Companies that do business internationally may need to register their trademarks in other countries to protect their rights.
However, this can be a complex and expensive process.
But, it is necessary to prevent other companies from using similar trademarks in those countries.
How to Register Trademark in Business – What Is a Trademark in Business
Registering a trademark can be a complex process that needs to be carefully done.
Here are the basic steps that businesses need to follow to register their trademark:
Choose a Unique and Effective Mark
The first step in registering a trademark is choosing a unique and effective mark that will distinguish the business’s products or services from its competitors.
The mark should be distinctive, memorable, and relevant to the business’s products or services.
Conduct a Trademark Search – What Is a Trademark in Business
It is important to conduct a trademark search before registering a trademark.
This ensures that the mark isn’t already being used by someone else.
You can do this by searching the USPTO’s trademark database.
Furthermore, you should conduct a broader search of the marketplace.
File a Trademark Application
Once the business has chosen a mark and conducted a trademark search, it can file a trademark application with the USPTO.
The application will include the following;
- Information about the mark
- The goods or services that the mark will be used for
- and Other information (depending on the type of trademark and the stare of registration)
Wait for Examination – What Is a Trademark in Business
After the application is filed, the USPTO will examine the application.
This is to ensure that the mark meets all the legal registration requirements.
However, remember that this process can take several months or even years.
Respond to Office Actions
If the USPTO finds any issues with the application, it may issue an “office action”.
The office action is a communication from the USPTO requiring the business to address those issues.
So, you will need to respond to the office action on time to continue with the registration process.
Publication and Opposition – What Is a Trademark in Business
If the USPTO approves the trademark application, it will be published in the USPTO’s Official Gazette.
This allows other parties to oppose the registration if they believe the mark infringes on their trademark rights.
Receive Certificate of Registration
If no opposition is filed or the opponent is unsuccessful, the business will receive a registration certificate from the USPTO.
This certificate confirms that the mark is now a registered trademark and can be used exclusively by the business in connection with its products or services.
Importance of a Trademark in Business – What Is a Trademark in Business
A trademark is a crucial aspect of any business’s brand identity, and it plays a vital role in building brand recognition, protection, and value.
Here are some of the key reasons why a trademark is important for businesses:
Brand recognition
A trademark helps create brand recognition.
A strong trademark can help a business stand out from its competitors and build brand loyalty.
So, when people see a trademark, they immediately associate it with a particular product or service.
As a result, it can be helpful for businesses.
This is because customers are more likely to remember their brand and come back to purchase from them again.
Protection – What Is a Trademark in Business
A trademark provides legal protection to the owner against infringement by other businesses.
In other words, if another business tries to use a similar trademark, the original owner can take legal action to protect the brand.
This is important because it prevents other businesses from using a similar mark that may confuse customers.
Marketing
A trademark can be a powerful marketing tool.
It helps build trust and credibility with customers and provides a platform for advertising and promotion.
Businesses can use their trademark in advertisements, product packaging, and social media to promote their brand and build customer loyalty.
Check
Value – What Is a Trademark in Business
A trademark can add significant value to a business by establishing a unique identity and helping to differentiate it from its competitors.
This value can be reflected in the business’s financial statements and can help attract investors or buyers.
For example, if a business has a strong trademark that is widely recognized, it may be worth more than a similar business without a strong trademark.
Licensing
A trademark can be licensed or franchised, allowing other businesses to use the trademark in exchange for a fee.
This can generate additional revenue streams and help expand the brand’s reach.
For example, companies may license a popular cartoon character to appear on clothing, toys, and other products.
As a result, it can generate additional income for the company that owns the trademark.
Challenges of Trademark in Business – What Is a Trademark in Business
Trademarks can present some challenges for businesses.
Here are some of the most common challenges that businesses face when it comes to trademarks:
Finding a Unique and Effective Mark
One of the biggest challenges businesses face is creating a unique and effective mark.
The mark should be distinctive while conveying something about the business’s products or services.
Coming up with a mark that meets these requirements can be difficult, especially since so many marks have already been registered.
Carefully conducting a thorough trademark search will help you deal with this challenge.
Also, you should hire a trademark attorney or consultant to help you with this process.
Then, hold sessions and focus groups that will be useful in generating a unique and effective mark.
Avoiding Infringement – What is a Trademark in Business
Once a business has chosen a mark, it needs to ensure it’s not infringing on someone else’s trademark.
However, this can be difficult since there are so many marks out there.
Also, it can be hard to determine whether a mark is too similar to another mark.
Nonetheless, if it is found to be infringing on your mark, you can take legal action against a business.
So, this may require the business to stop using the mark.
Protecting the Mark
Once a business has a mark, it needs to take steps to protect it.
This can involve monitoring the marketplace for infringing uses of the mark.
Also, it might involve taking legal action against infringers.
However, this can take time and money that many small businesses may not have.
Keeping the Mark Relevant
Over time, a business’s products or services may change, and the mark may no longer be relevant.
As a result, it can make it difficult to maintain the trademark’s value.
However, regardless of this, you can still work to keep it relevant by:
- Conducting regular market research
- Monitoring customer trends
- Keeping up with changes in the industry
So, if necessary, you may need to update or modify the mark to keep it fresh and relevant.
Additionally, you can engage in branding and marketing efforts.
This will work to strengthen the trademark and maintain its value in peoples’ minds.
International Protection
If a business wants to expand its products or services internationally, it may need to register its trademark in other countries.
However, this can be a complex and expensive process.
In addition, the laws of trademarks can vary from country to country.
Conclusion on What Is a Trademark in Business
A trademark is a powerful tool used to protect a brand and set it apart from its competitors.
Whether it’s a logo, a slogan, or a unique name, a trademark helps businesses build a reputation and a strong market presence.
However, registering a trademark can be complex and take time.
So, you need to be aware of the challenges and risks involved.
However, you can set yourself up successfully and build a loyal customer base by understanding the basics of trademarks and taking the necessary steps to protect your brand.
Whether you’re a small business owner or a budding business person, remember the importance of trademarks in business and use them to your advantage.
