After carefully developing an idea for a marketable product or service, many startups and entrepreneurs immediately name it with little thought as to the legal effect of the name chosen.  Selecting the brand name of a product or service is an important decision having both marketing and legal implications.  A failure to understand and accommodate those implications can expose a new venture to increased marketing costs and legal exposure that few emerging businesses are prepared to bear.

What is a Trademark or Service Mark?

In the United States, Section 45 of the Lanham Act defines a “trademark” as “any word, name, symbol, or device, or any combination thereof . . . used by a person, or [intended to be used in commerce] . . . to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.”  A “service mark” is such a word, name, symbol, or device, or any combination thereof used, or intended to be used, to identify and distinguish services, as opposed to a product.    

Essentially, a mark (trademark or service mark) is a brand identifier.  While the name of a product or service tells consumers what it is, the associated mark tells consumers who offers it for sale.

What Should You Consider in Selecting a Mark?

In selecting a mark to be used in connection with a new business, entrepreneurs should take care to:

1. Keep in mind the purpose of the trademark or service mark.  A mark is meant to identify the source of a product or service to consumers, so it must be unique in the industry in which it is being used.  Though it is advisable to engage a competent professional to conduct a full clearance search for each prospective mark before it is used, searching the Trademark Electronic Search System (TESS) (http://tess2.uspto.gov/bin/gate.exe?f=tess&state=4807:wu1rd4.1.1) can often provide preliminary information about existing marks that are similar to a prospective mark.
2. Select a mark that does more than simply name or describe the product or service.  A generic term is incapable of functioning as a mark.  A descriptive term can only function as a mark upon proof that consumers actually recognize the mark as a source identifier.  The best marks are devices invented for the sole purpose of acting as a source identifier (e.g., EXXON, XEROX) or that have a common meaning having no relation to the products or services being sold (e.g., APPLE for computers).
3. Create a mark and a separate generic name for new and unfamiliar products and services.  The product many people refer to as a “Band-Aid” is actually correctly described as an “adhesive bandage.”  BAND-AID is a trademark that identifies adhesive bandages sold by Johnson & Johnson Corporation.  Many companies may produce and sell adhesive bandages, but only Johnson & Johnson Corporation may produce and sell “Band-aids.”

While these simple guidelines are not intended as a substitute for good legal advice, they can help startups and entrepreneurs avoid a few common mistakes made in the selection of a trademark or service mark.