Making Your Business Valuable: Trademarks and Trade Secrets (part 1)

Part 1: Branding Your Business with a ®oar!

When I say “the Golden Arches®,” what pops into your mind? The place you begged your parents to take you for a Happy Meal®? (I’ll be shocked if it wasn’t the McDonald Corporation as it has done a magnificent job of branding its business worldwide.) The nifty “®” that you see above has significant business value. It symbolizes that the word or phrase is a registered trademark.

In general, trademarks create an immediate association between a consumer and a company that sells a particular good or service. For instance, sticking with the McDonald Corporation, “the Golden Arches” invokes a specific fast food restaurant chain, “Happy Meal” conjures a kid’s meal with a toy, and even “I’M LOVIN’ IT” (yes, they trademarked that too) summons a warm, overall dining experience (at least, that’s what the commercials want us to believe).

This immediate recognition creates a shorthand for companies to communicate to their consumers. And it doesn’t have to be just a word or phrase; it can be logo, design, or image, and even a sound or scent that identifies a source of goods or services and distinguishes those good and services from others. Trademarks are an extremely valuable form of intellectual property and are the legal component to branding your business.

Now, before spending thousands of dollars on marketing and advertisements, do your homework and think about what trademark you want to use to identify your goods or services. After all, your trademark may be a lucrative investment. For those of who reside in Los Angeles, you should be familiar with Fred Segal, the iconic retail store established in 1961. Well, in 2012, Sandow Media acquired the worldwide rights to the Fred Segal brand, anticipating that its trademark will see north of $300 million in revenue. I would wager that the licensing deal was quite profitable for the Fred Segal family.

By registering your trademark with the U.S. Patent and Trademark Office (the “PTO”), you are placing the public on notice that you, and only you, have the right to use this mark in commerce. This affords you the optimal protection to ward off misuse, misappropriation, and abuse of your mark as well as marks that are confusingly similar. And, of course, gives you the leverage to license your trademark to others. (Hopefully, for a ridiculous sum of money.)

So where do you start?

In my practice, I approach trademarking as a 3-step process:

1.  Choose a trademark that is either fanciful, arbitrary, or suggestive (e.g., Xerox®, Subway®, and Coppertone®, respectively). (Typically, names, geographical locations, and descriptive words aren’t trademarkable unless they achieve secondary meaning, which is a whole other topic of conversation.)
2. Clear the trademark to make sure that the mark is available to use.
3. File the appropriate application with the PTO for registration.

Once you completed the process, you’ll have many benefits such as: the legal presumption of ownership and exclusive right to use the mark with your goods and/or services, the ability to sue for trademark infringement (or at least threaten, giving your trademark more teeth to bare), and record the registration with U.S. Customs and Boarder Protection Services to prevent the import of counterfeit goods.

Intellectual Property such as trademarks are valuable assets of any business. So protect them!