Foresight Valuation Group LLC
What do aspirin, cellophane and zipper have in common? These well-known marks have all become generic, which renders them outside the scope of trademark protection – and as such, they can no longer bring value to the companies that hold them. While a trademark empowers a company to build a reputation around the mark, companies must remember that their mark is only as powerful as the protection afforded to it. The extensive advertising campaign by Xerox to inform the public to use its mark properly to identify Xerox products, rather than as a verb for the act of making copies, is another manifestation of a company trying to police the value of its high-profile trademark.
Trademarks enable a provider of goods or services to differentiate its products and services from those of a competitor, thereby reducing the consumer's likelihood of confusion. In reducing the likelihood of confusion, the provider can build an identity behind the trademark that stands for more than mere identification of its goods or services, thereby enabling it to build value in its brand identity. Consumers identify trademarks not only as the origin of the company’s goods or services, but also as the reputation of the company. In turn, that creates value not only in the trademark identifying the good, but also in the brand behind the trademark.
A mark that is already federally registered is of no use to a company other than the owner trying to use that mark. Similarly, there is no use in building a strong brand behind a trademark that is not registered, as a new registered user would limit the ability to expand the geographic range of the mark. Further, the strength of any mark is inversely proportional to the mark’s relation to the product or service, also known as the distinctiveness of the trademark. The chart below outlines the sliding scale of the strength of a trademark as a function of its distinctiveness.
This category of mark is represented by made-up or coined words that bear no relation to the goods being described. Fanciful marks are the strongest among general trademarks, as their lack of relation to the good prevents likelihood of confusion and solidifies in the consumer’s mind the link between the fanciful word and the product. A common example of a fanciful mark is EXXON, which is a coined word unrelated to motor fuel in any way other than in the consumer’s mind.
This category of mark is represented by words found in the dictionary that contribute no meaning to the goods being described. In other words, the dictionary definition of the mark has no relation to the goods the mark describes. An example of this type of trademark is APPLE. According to the dictionary, 'apple' is a noun representing the round fruit of the rose tree. Therefore, when used by Apple Inc as a trademark for consumer electronics, APPLE is considered to be arbitrary, provided that Apple Inc stays out of the orchard business.
This category of mark is represented by words that suggest or relate to the product without clearly describing the product itself. Suggestive marks require the consumer to make the logical leap between the suggestive term and the product. An example of this type of mark would be MICROSOFT, which suggests to the consumer that the mark relates to software for microcomputers.
This category of mark is the weakest and will be unenforceable until the mark has acquired secondary meaning, also known as 'acquired distinctiveness'. This mark is represented by terms that directly describe either the goods or an essential element of the goods. Such marks are not enforceable without secondary meaning, because these terms are generally used to describe all goods in a particular category and therefore enforcement would pre-empt competitors from describing their products in a meaningful way. Examples of descriptive marks that have acquired secondary meaning – and therefore protection – include WINDOWS (software), BEST BUY (retail stores) and SHARP (electronics).
This category of mark is ineligible for trademark protection because the word has been accepted and recognised by the general public as describing the entire class of goods. It is important not only to avoid selecting a generic term as atrademark, but also to police use of the mark by the general public to ensure that it does not become generic. Velcro and Xerox have both sued another company for using their trademark and almost lost the case because the defendant argued that the trademark had become generic; therefore, they now actively police their brands
Many of the world’s most valuable brands rely on descriptive trademarks that, if not policed, run the risk of becoming generic and losing their value. These include marks such as BAND-AID, Q-TIP, SHARPIE and VELCRO. While every company may wish its brand or trademark to be synonymous with its product, this level of public awareness and use of the mark will inevitably risk causing the mark to become generic and lose its value.
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Foresight Valuation Group LLC
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