Trademark Basics for Small Business Owners
Originally published: 02.01.14 by Beniam Biftu
Editor’s note: With the April 30 deadline to the HVACR Business Tops-in-Trucks Fleet Design Contest approaching, we thought it might be a good time to review trademark and copyright law.
Due to the popularity of HVACR Business’s Tops-In-Trucks Fleet Design Contest the magazine’s publisher asked me to write a series of articles on trademarks and trademark infringement. Imitation may be the best form of flattery; however, in the case of logos and trademarks this can get you into significant trouble. The publisher showed me designs of past contest winners who had hired branding firms to design, or in some cases redesign, a brand for their company. After appearing in the pages of HVACR Business, other firms “borrowed” the design, often in other regions of the country. In most cases, the similarity is too close to call a coincidence and this could lead to a lawsuit. With that in mind, this series will help educate you on trademarks, infringement and consequences.
United States law defines a trademark as any symbol that is used to distinguish the source of your goods or services from others. Simply put,
The broad nature of trademarks should make business owners cautious when adopting a brand as their trademark. Some may think misspelling or tweaking another’s brand is sufficient to escape legal liability. However, federal law could find such practices to be an improper use of another’s registered trademark, i.e. trademark infringement. But how do you know when this line has been crossed?
Federal law articulates a test to determine whether trademark infringement has occurred. This test is known as likelihood of confusion. It states, if the relevant consuming public will likely be confused about the source of a product/service sold using the trademark in question, then the trademark has been infringed. There are several factors the courts weigh in a likelihood of confusion analysis, including: the strength of the trademark, similarity of the trademarks in appearance, sound, or meaning, similarity of the goods/services, whether the goods/services are marketed through the same stores or channels of distribution, the sophistication of the purchasing consumer, the defendant’s intent in selecting the trademark, the likelihood of expansion of product lines, and whether there is actual confusion.
Note that there does not need to be actual confusion for a court to find trademark infringement, only a likelihood of confusion. This makes sense when you contemplate the underlying policy behind the law. Trademark law protects consumers. If consumers are pleased with a particular brand, it is easier for them to look at the brand than to sift through and carefully examine the labels, packaging, or workmanship every time they buy that product. The trademark saves consumers time and allows them to make informed purchasing decisions. However, if the source of goods is likely to be confused with another, then the trademark would not serve its purpose as a source identifier.
Even if there is no likelihood of confusion, one may still be liable for using another’s trademark if you are in any way diluting the trademark by blurring or tarnishing it, cybersquatting, competing unfairly, or passing off, etc. under state and/or federal law.
Although a major underlying policy behind trademark law is to prevent customer confusion, the law also protects business owners. A trademark owner who believes his trademark has been infringed may seek an injunction (i.e., a court order demanding that the alleged infringer cease all use of the trademark). Additionally, the trademark owner may seek monetary damages including, lost profits, reasonable attorney fees, and treble damages for willful infringement. A court may also impose criminal penalties. Under the United States Anti-counterfeiting Consumer Protection Act of 1996, counterfeiting trademarked goods could carry criminal charges resulting in substantial punishment such as fines and imprisonment.
So remember, when adopting a trademark for your business, imitation is not always flattery. It could be infringement. To better protect yourself, consult an attorney for legal advice.
Please note: this article is for general information purposes only. It does not constitute legal advice, nor does it form an attorney-client relationship.
Mr. Beniam Biftu is a trademark and copyright attorney, counselor-at-law,and the founder of Biftu Law LLC (www.biftulaw.com). His firm was created to provide exceptional and affordable trademark counsel to small business owners and large international corporations.Mr. Biftu also helps up-and-coming artists, writers, musicians, and app developers secure and enforce federal copyrights.