So, rendering (offering) your services in multiple states satisfies this requirement. Yet also it seems that the requirement can be met without offering your services in multiple states or in multiple countries, by “rendering your services in commerce.”

Rendering Trademarked Services in Commerce

So what the heck does rendering the services in commerce mean? Well, only trademarks used in interstate commerce are entitled to federal trademark registration, because the federal government only has the power to regulate interstate commerce (it’s in the Constitution!). “In commerce” here is differentiated from commerce in multiple states or in the U.S. and a foreign country, so it mean intrastate service that nevertheless qualifies as “interstate” commerce.

Intrastate Hotel, Dining, and Automotive Services Are Interstate Commerce

The TMEP explains: “if intrastate use directly affects a type of commerce that Congress may regulate, this constitutes use in commerce within the meaning of the Act.” TMEP § 901.03. Thus, automotive, restaurant, and hotel services are generally considered to be used in commerce because they are available to customers traveling interstate on federal highways, and thus are subject to federal regulation.

Intrastate Services That Target or Serve Out-of-State Customers Qualify As Interstate Commerce

Other services offered in only a single state may also be considered to be rendered in commerce if a sufficient inter-state nexus can be shown. Evidence that the services are advertised in multiple states or are used by residents of different states is effective in demonstrating that the services have been rendered in commerce.

Internet Services Are Interstate Commerce

Services offered over the Internet are considered interstate commerce, “since the services are available to a national and international audience who must use interstate telephone lines to access a website.” TMEP § 901.03

Summary

In order to register your trademark with the United States Patent and Trademark Office, you must use your trademark in connection with services offered in interstate commerce. That means the services must either be offered in multiple states, or in the U.S. and a foreign country, or that the services are offered in a single state, but to out-of-state customers.

And if your services do not fall under any of those possibilities, but you can think of another way to tie your services to interstate commerce, the Trademark Office could allow your trademark to be registered as well.

So what does it mean to use a trademark “in commerce”? Is it sufficient to use your trademark on your website? The answer is, sometimes yes and sometimes no. It depends on whether your mark is a plain old trademark or a service mark. A service mark is a trademark that is used to sell services, rather than physical products.

To register a service mark, you must show that you have used the mark in the advertisement or sale of a service to prospective customers and that you were prepared to provide the service at the time of the advertisement.

The Rule Regarding Use in Commerce of a Service Mark

TMEP § 901.01 states that “a mark shall be deemed to be in use in commerce… on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.”

In other words, for a service mark use in commerce requires:

1. Display of the service mark in the sale or advertisement of services, and
2. Rendering the services in commerce or in multiple states or the U.S. and a foreign country

Let us ignore the second part of #2 for now (it’s a doozy) and parse the rest of that.

1) Display of the Service Mark in the Sale or Advertising of Services

To successfully claim use of your service mark and achieve a federal registration, you must show that you have used your mark in an advertisement or sale of your services. This is generally an easy requirement to fulfill. Display of your service mark on your website, where your website advertises your services, generally is sufficient to satisfy it, and is the most popular way to do so.

Advertisements Are Not Sufficient to Show Use in Commerce For Trademarks

Note that this is in contrast to the rule for trademarks (used on goods/products), where use in an advertisement is NOT sufficient and therefore use on a website often does NOT satisfy the requirement. Many business owners get in trouble with this distinction and do not understand why their website is not sufficient to show use. Nevertheless, it usually is not (consult your attorney to find out for sure).

Mere Preparation to Use Is Not Sufficient to Show Use in Commerce of  a Service Mark

What does not satisfy this requirement is preparation to use the service mark. “[m]ere adoption (selection) of a mark accompanied by preparations to begin its use are insufficient . . . for claiming ownership of and applying
to register the mark.” Aycock Engineering, Inc., v. Airflite, Inc., (Fed. Cir. 2009) (citing Intermed, 197 USPQ at 507).

Such acts as soliciting the support of others, issuing a detailed announcement using the service mark to inform and update individuals about the service’s status, and hiring a fundraising firm to raise money for the service are insufficient.

Use in Commerce Requires Advertisement or Sale to Customers

Advertising your service to potential partners, investors, or affiliates is not sufficient to show use in commerce. Rather, “there must be an open and notorious public offering of the services to those for whom the services are intended.” Aycock Engineering, Inc., v. Airflite, Inc., (Fed. Cir. 2009) (citing Intermed, 197 USPQ at 507)(emphasis added).

2) Rendering the Services

Mere advertisement of your services, in and of itself, is not sufficient to satisfy the federal trademark registration requirement of use in commerce for service marks. You must also actually be prepared to provide the services you are advertising.

Advertising a Service You Will Soon Provide is NOT Sufficient

“Without question, advertising or publicizing a service that the applicant intends to perform in the future will not support registration. Instead, the advertising or publicizing must relate to ‘an existing service which has already been offered to the public’… The use in advertising which creates a right in a service mark must be advertising which relates to an existing service which has already been offered to the public.” Aycock Engineering, Inc., v. Airflite, Inc., (Fed. Cir. 2009) (citing Greyhound Corp. v. Armour Life Ins. Co., 214 USPQ 473, 474 (TTAB 1982))

The Services Advertised and Rendered Must Be The Services Listed in Your Trademark Application

Be careful when listing the services you provide or intent to provide. You will have to show that you have advertised and are ready to perform THOSE services. The listed services (or goods) can be changed, but only to narrow or clarify what you have listed, and never to broaden the list.

Thus, going from “Clothes” to “shirts” is okay, but going from “shirts” to “clothes” is not. That is one reason to leave your listing of services broad if you can, particularly if you are uncertain exactly how to describe the services you are offering or what service you actually will provide.

In Aycock Engineering, the registrant’s federal trademark registration was canceled because his activities did “not constitute a service that falls within the scope of our definition of the recitation of services.” Mr. Aycock’s listed services covered  “only the arranging of flights between an air taxi operator and a passenger”, whereas his activities involved “efforts to arrange a network of air taxi operators.”

Conclusion

The failure to properly show use in commerce of your trademark can result in rejection of your application for registration or cancellation of your federal registration years later. Do not take chances with formalities like these, work with a trademark attorney early on to ensure the strength of your trademark rights, and learn from the mistakes of others.

The transfer of a trademark to a new owner, for compensation or otherwise, is called an assignment. 37 C.F.R. §3.1. If the trademark in question is registered or pending registration, the assignment should be filed with the Trademark Office so that its records will reflect the change in ownership.

Trademarks That Have Been Used In Commerce

If you have already used your trademark in commerce, the assignment rules for your trademark application are the same as for a registered trademark. A registered trademark can be assigned, as long as it is transferred along with “the good will of the business in which the mark is used, or that part of the good will of the business connected with the use of and symbolized by the mark.” TMEP § 501.01

So if you have a trademark for a shoe brand and part of your business is selling your branded shoes, you can sell your shoe trademark to another company, but you must also sell the portion of your business that sells shoes under that trademark. You cannot simply sell the brand name to the other company to place on their own shoes and then continue selling your shoes under a different name.

The reason for this is that  trademark rights exist to avoid consumer confusion. Companies are not granted exclusive rights to brand names just because they were they first to think them up. Rather, the purpose of exclusive trademark rights is to allow consumers to identify products that they are familiar with and to expect a consistent source for the product. Because of trademark rights, when you buy a computer with the Apple logo on it, you know that it is made by the Apple Computer Company and not some fly-by-night computer startup.

The trafficking of trademarks apart from the business or goodwill they are associated with is antithetical to this purpose. If Apple sold the apple logo to some other company and the company started using the logo on their own, completely different computers, this would be very confusing for consumers. Therefore this type of trafficking in brand names and other trademarks is not allowed.

Intent-to-Use Applications

You can apply for a trademark registration before you being using that trademark in commerce. Although a registration cannot be issued until use begins, the application will “hold your place in line” and prevent other people who thought of the trademark after you from using it.

However, an intent-to-use application cannot be assigned unless it pertains to an ongoing and existing business (or portion of a business) and is transferred along with that business. TMEP § 501.01 So if you have an active business selling herbal supplements and apply for a new trademark you intend to use with your business, you can sell or transfer that trademark application along with your business to another company.

On the other hand, if you intend to start a business selling herbal supplements in the future, and apply for a trademark for that business, you cannot assign your application to anyone else. You cannot even assign your application from yourself to your new LLC that you own 100% and intend to use to start your business. See, for example, Opposition No. 118,181, Pfizer, Inc. v. Gregg Hamerschlag.

Avoiding an invalid assignment is critical. If you assign an application when you should not, the result is not an invalidation of your assignment, but an invalidation of your application!

Without this requirement, an applicant would be free to assign an intent-to-use application to anyone, since the goodwill that would have to be transferred is trivial or nonexistent. Trademark speculation, like domain name speculation, would probably be rampant, with entrepreneurs registering hundreds or, like modern domainers, hundreds of thousands, of potentially valuable trademarks and holding them for sale to actual businesses. The requirement of an ongoing business avoids the trafficking of trademarks that the goodwill requirement is meant to avoid.

More reading:

U.S. Assignments (International Trademark Association)

Avoiding illegal trademark transfers: introducing the assignment-in-gross (Florida Bar Journal)

Business Names, Slogans, Brand Names, and Other Short Phrases

Business names, slogans, brand names, and other short phrases cannot be copyrighted. They are explicitly excluded from copyright protection. Any kind of name, title, catch phrase or short advertising expression will fall under this exclusion. Listings of ingredients, including recipes, formulas, and labels, are also not protected by copyright (although text descriptions, directions, or explanations may be copyrightable).

Trademark Protection for Names and Slogans

Ideas for business names, brand names, and slogans can be protected by trademark law if you intend to use them in commerce. Trademark law protects brand names, logos, slogans, and anything else that is used in commerce to distinguish your products or services from those of others. Trademark law grants exclusive rights to such marks to the first user, under certain circumstances.

For example, if you place your logo or brand name on your products so that customers can easily identify them and distinguish them from the products of competitors, that logo or brand name is protected as a trademark. Similarly, slogans, brand names, and other marks used to advertise your services are afforded trademark protection.

Although some protection for trademarks arises automatically when you begin using them in commerce, it is necessary to register your trademark at the federal level to protect it nationwide, or to get any protection for a trademark you have not yet begun to use in commerce.

To protect a great idea for a brand name or slogan that you want to use in business, contact a trademark attorney to apply for a trademark registration. If you have an idea for a name, slogan, or title that you do not plan to use in business, it cannot be protected- just keep it a secret!

Trade Secret and Patent Protection for Recipes and Formulas

Recipes and formulas are not protected by copyright or trademark law. The only way they can be protected is by patenting them or keeping them as trade secrets. A recipe or formula may be patented if it is new and not an obvious combination of known recipes or formulas.Patents grant you exclusive rights to an invention for a period of 20 years.

However, many recipes and formulas, such as the formula for coca cola, are kept as trade secrets because they are difficult to reverse-engineer from the finished product. Trade secret protection can last indefinitely as long as you keep the information confidential and restrict access to it.

Logos

Logos can be protected by both copyright and trademark law. To be protected by copyright, they must have a minimum level of originality. A geometric shape alone is not sufficiently original, however most logos are. To be protected by trademark law, there must be an intent to use it in commerce.

Copyright protection lasts the lifetime of the author, plus 70 years. However, it only protects against copying of the trademark. If another business independently develops their own, strikingly similar logo, you are out of luck. Copyright law does not stop them from doing that.

Trademark protection can last indefinitely as long as the logo is in use in commerce, however a trademark registration must be renewed periodically. A trademark registration protects against another business using a confusingly similar mark, regardless of whether they copied your design.

Conclusion

This is a brief introduction to the protection of logos and names, titles, slogans, and other short phrases as intellectual property. To learn more about patents, trademarks, copyrights, and trade secrets, please see some of my other posts, some of which I have linked to in the body of this post.

• The Patent Reform Act of 2010 receives a favorable opinion and thorough analysis on Patent Baristas. Stephen Albainy-Jenei notes a number of critical features of the proposed bill, including authorization for the USPTO to set its own fees, a move to first-to-file, raising the bar for findings of inequitable conduct and willful infringement, elimination of the best mode requirement, new pre- and post-grant review procedures, and more. In my mind it is a mix of really good changes and not-so-good changes- of course odds are good we will end up with the status quo as usual. Fortunately Kappos seems to be doing a good job internally.

• Gene Quinn at IPWatchdog discusses the new USPTO proposal allowing the extension of provisional patent application pendency from 12 to 24 months. Quinn approves, although he comments regarding the use of late-filing procedures: “I really hope that as patent reform moves forward in Congress someone can add a simple amendment to the bill that would change ‘12 months’  and ‘12-month period’ in 111(b)(5) to ‘24 months’ and ‘24-month period’ respectively. That would be cleaner for sure.“ I personally dislike that this has been billed as examination deferral when in reality it seems more of a trap for the unwary.

• Just N Examiner reports and discusses the recent change to patent examiner hoteling rules. Experienced examiners have been allowed to work at home for years now, reducing the amount of office space needed on the PTO campus in Alexandria. However, prior to the rules change Examiners had to check in at the PTO twice every biweek. Is this change a step towards a nation-wide examining corps?

• IP Kat discusses the interplay of trademarks and brands and the difficulty of defining and analyzing brands in a business context.

• Duets Blog illustrates how direct navigation allows cybersquatters to profit from your business.

Any thoughts or questions on the latest Patent Reform Act or the PTO’s new proposal for provisional patent applications?

A trademark registration expires after ten years. If you wish to keep your trademark registration active, you must file an Application for Renewal of your registration under § 9 (See TMEP § 1606 ) before the expiration of this ten year period.

The window for filing this Renewal opens one year before expiration of the mark and a Renewal may also be filed within six months after the expiration of your mark (the “grace period”) with an additional fee. Thus, you may file a Renewal any time between nine and ten years after registration, or between ten and ten and a half years after registration with payment of the additional fee. A declaration or affidavit of continued use under § 8 must also be filed within the same period as the Application for Renewal of registration (See TMEP § 1604).

Each Renewal extends the life of the registration for ten years, thus a new Renewal must be filed before the end of twenty years after registration, thirty years, etc., if you do not wish for your registration to expire.

Reinstating a Trademark Registration

If you forget about the renewal and miss the ten-and-a-half year deadline, your registration will expire. In that case, there is no way to revive or reinstate it. Your registration is simply gone and if you want another one, you will have to file a new application and undergo examination once again. Examiners are not bound by previous registration decisions of the Trademark Office, so you could encounter some difficulty with your new application.

The only time that a trademark registration can be reinstated once it has expired for failure to file a renewal application or declaration of use is if you did file the required documents and the expiration was due to a Trademark Office error (See TMEP § 1712.02). If, for example, the Trademark Office lost the paperwork, you would be able to reinstate your registration.

In that case, a request for reinstatement  must be filed within two months of receiving notice that your registration was canceled.

So, be careful not to miss any deadlines! The Trademark Office will not warn you when they are approaching. Consider using a trademark attorney or trademark management company to keep track of the deadlines for you.

Dealing with Cyber Squatters from Legal River on Vimeo.

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Cyber Squatting – Cliff Hyra from Legal River on Vimeo.

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However, some businesses are much more likely to cause you problems than others. Evaluating the nature of the other users is key to determining the risk of litigation or other conflicts. Here are some guidelines for evaluating users of similar marks.

1) Big Companies are Litigious

Big companies know the value of brands and of trademarks. They are paying attention to who is using what trademarks and to what trademarks are being registered with the United States Patent and Trademark Office (PTO). If you try to register a trademark similar to theirs, you can bet they will find out.

PTO records are for the most part a matter of public record. They do not have crystal balls, but if your business grows large or your product becomes popular, they will most likely find out if you are using a similar trademark, even if you choose not to register it.

And once they find out, they will come after you. They are perfectly willing to oppose or petition to cancel your trademark application or registration, or to file a lawsuit for trademark infringement. If you are  willing to agree to limitations on your use of the mark, you may be able to continue using it- on the other hand, you may have to change the mark. And if you do not want to comply, they are perfectly willing to spend tens of thousands of dollars fighting you.

So if the conflict is with a Fortune 500 company, you should usually just forget it. There is no point in inflicting the cost of a complete name change and marketing redeux on yourself, not to mention the concomitant legal fees. Find a new name.

2) Small Businesses Are Oblivious

On the flip side, for much smaller businesses with a more local or regional clientele, trademark issues are not as important. Few are willing to pay for the cost of trademark monitoring to make sure no confusingly similar trademarks are being registered. Many very small businesses do not even register their trademarks or have a basic understanding of trademark law.

They are, in general, very unlikely to discover your use of a similar trademark or to understand their options if they do. The only way you are likely to get into trouble is if your business gets huge and suddenly people start thinking about ways to get into your deep pockets. But by that time, your trademark may be incontestable, making it difficult for anyone yo cancel your registration.

When a smaller business gets in a trademark conflict with a really big company, it is often because the smaller business is blindsided by an accusation of trademark similarity that it never saw coming. Large corporations will go after trademarks that are even slightly similar. Small business usually will not.

3) Close Competitors are Unforgiving

The closer a competitor another user is to you, the more likely they will discover your use of the mark and make it an issue. Being in the same industry or the same geographic region and marketing to the same end-users or through the same stores or distribution methods are all factors contributing to closeness between competititors.

Businesses are more familiar with the companies and brands in their industry and geographic region. When business share distributors or end-users, confusion is more likely, and any similarity between marks is more likely to be brought to their attention.

On the flip side, companies that are not direct competitors are less likely to discover or care about your similar mark, and working out an agreement is easier if a conflict does arise.

Look in the Mirror

Finally, consider some characteristics of your own business that could make your trademarks more or less vulnerable to challenge.

Size/Growth -Size works both ways. A bigger company leaves a bigger footprint and its trademarks are more likely to be noticed. Size can deter weak challenges from medium or large firms looking for a quick and inexpensive trademark enforcement action.

However, size can also sometimes encourage conflicts, especially when infringement is clear, because the potential damage to the other party is greater and because there is the potential for a payoff.

If your company is small but growing fast, a conflict may be unlikely now but foreseeable and damaging in the future. Growing companies may also get more publicity and spend more on advertising, increasing awareness of your trademarks.

Web Presence – Web presence can function as a proxy for size. A relatively small business can have a very big impact online. That means that, like a big business, its trademarks are more likely to be found and to confuse consumers.

However, a web presence does not carry the benefit of deterrence. Your strong Internet presence can be a liability when it comes to avoiding trademark conflicts.

Conclusion

These are just some of the factors that affect the likelihood of a conflict between your business and another business that uses a similar trademark. A trademark attorney can help you to evaluate the risks. Is there anything important that I have left out? Any related stories you have to share? Any questions? Leave them in the comments.

What should you do? Do you have to drop the name? Change it? Contact First User? Or can you just go ahead with your registration and marketing plans as if nothing had changed? There are a few factors you must weight when making that decision:

1. What First User can do to you if they find out you are using a similar trademark
2. How likely First User is to find out or decide to go after you
3. Just how good the name you came up with is

The first factor is the potential cost to you of using the trademark, the second is the probability of incurring that cost, and the third factor is the benefit from using that trademark. You can then make the classic calculation: is the potential cost multiplied by the probability of incurring that cost greater than the expected benefit to you?

1) Penalties for Trademark Infringement

If you decide to begin using a trademark (business name, logo, brand name, etc.) that is confusingly similar to the trademark of another business in the U.S., that other business can cause you a lot of problems. It can stop you from registering your trademark and it may be able to stop you from using the trademark.

• Preventing You From Registering Your Trademark

Trademark Examining Attorney Refusal to Register

The Trademark Office will not register a trademark if it is confusingly similar to another registered trademark. Therefore, if First User has registered their trademark, it may be difficult for you to get your application allowed by the PTO. The Trademark Examining Attorney assigned to your application is likely to refuse registration of your mark.

Trademark Opposition / Cancellation

Even if the PTO allows your trademark application, First User can oppose your registration, regardless of whether it has a registration and regardless of where in the U.S. it is located. A trademark opposition is an administrative proceeding before the Trademark Trial and Appeal Board (TTAB) and is essentially a mini-trial.

To go all the way through an opposition you can expect to spend $50,000 to $100,000, depending on what law firm you use. If First User can prove that your mark is confusingly similar to theirs and that it began using the mark in commerce before you, it is likely to succeed in preventing your registration.

Even if your mark is successfully registered without an opposition, First User can come back and petition to cancel your registration up to five years later. A cancellation proceeding is very similar to an opposition in expense, etc.

• Preventing You From Using Your Trademark

Although registering your trademark is very important, the right to use your trademark is even more important. If First User has registered their trademark, they have exclusive rights to that mark nationwide. Regardless of whether you are operating in the same geographic area, your use of a confusingly similar mark in the United States constitutes trademark infringement.

In that case, First User can sue you and, if it can prove confusing similarity, force you to stop using your trademark. You would then have to redo your marketing materials and marketing campaign and devote a lot of money to rebranding.

As you are probably beginning to understand, it is generally a bad idea to use a trademark that seriously conflicts with an existing registered trademark. More frequently, you will have to make a decision regarding a trademark that is used by another business, but not registered. In that case, you can only be sued for trademark infringement if you do business in the same geographic area as First User, and only in state court. First User will have to prove confusing similarity and first use.

Defending a trademark infringement lawsuit can easily run six figures. Monetary damages could also be awarded against you, although they are uncommon.

2) Likelihood That Trademark Infringement Will Be Discovered or Prosecuted

Whether First User is likely to discover your use of a similar mark or pursue you if they do depends on a number of factors, including:

• Is First User big or small?
• Is First User brand-focused?
• How close are the marks / how strong is First User’s legal position?
• Does First User do business in your geographic area?
• Do you have a significant web presence?
• Is First User a direct competitor?
• How big will your business become, and how fast?

These factors will be discussed in more depth in a subsequent post. Generally, large corporations are very likely to find out about trademark infringement and take action, whereas very small businesses are very unlikely to.

If you are able to register your trademark and keep that registration for five years, your registration will become incontestable, meaning that First User will no longer be able to cancel it for confusing similarity to their own mark. Your registration will also allow you to prevent First User from expanding beyond their geographic area.

3) How Important Is It To Keep Your Trademark?

Finally, you should consider the importance of the trademark you have selected. Are you wedded to it? Would you be open to tweaking it in order to differentiate it from First User’s trademark? If there are good alternatives and you have nto spent much money on putting together your branding materials, often it is better to avoid potential conflicts by choosing a new trademark.

On the other hand, if you have a really good and meaningful trademark that you have spent money to develop and build a marketing campaign around, it may be worth taking the risk of going ahead with it. This is particularly true when the risk is low, for example if First User is a small business that is not a direct competitor and is unlikely to discover the similarity.

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