What Is a Trademark?
Let me tell you directly: a trademark is a distinct signifier, whether it's a word, symbol, or insignia, that identifies a particular product and sets it apart legally from others on the market. It exclusively marks a product as belonging to a specific company and recognizes that company's ownership of the brand. Trademarks count as a form of intellectual property.
Key Takeaways on Trademarks
You should know that a trademark serves as an easily identifiable marker pointing to a specific product or company. It legally acknowledges the source company's ownership of the brand. Remember, trademarks might be registered or not, and they're denoted by symbols like ® for registered ones and ™ for unregistered.
Trademark Protections
A trademark stops others from using a company's or individual's products or services without permission. The laws prohibit any business from adopting a symbol or brand name that's similar in look, sound, or meaning to an existing one for a similar entity. For instance, a soft drink maker can't legally use a symbol resembling Coca-Cola's or a name that sounds like Coke.
In the United States, you register trademarks through the United States Patent and Trademark Office (USPTO), and they're identified with the ® symbol. Even unregistered trademarks get recognition with the ™ symbol and some protection. By using ™, the owner signals they're relying on common law to safeguard their interests.
Trademark holders retain rights for the life of the product or service, with some exceptions. You must make continuous, lawful use of the trademark to benefit from these laws. That means a company or individual has to regularly manufacture, produce, market, and sell the product with that trademark for the law to hold. You can maintain this by filing a Section 8 declaration through the USPTO every five years. If you fail to file, you risk losing the registration.
Fast Fact on Service Marks
Here's a quick note: a service mark is like a trademark but identifies and distinguishes the source of a service instead of a physical product, though people often use 'trademark' to cover both.
Valuing a Trademark
Trademarks can be bought and sold just like other property. You can license them to other companies for a set time or under specific conditions. Take LEGO, for example—they've partnered with movie franchises like Star Wars and DC Comics to produce themed products featuring those characters.
Trademarks work effectively for marketing brand names. Some, like Kleenex, become so prominent they nearly replace the generic word for the item, such as asking for a Kleenex instead of a tissue. Kimberly-Clark owns the Kleenex trademark, launching it in 1924 as a disposable tissue for cosmetics, then relaunching in 1930 as a handkerchief substitute.
Another example is Johnson & Johnson, who started making sterile gauze in 1887 but launched the BAND-AID Brand adhesive bandage in 1920. This trademarked name is now commonly used for any adhesive first-aid product.
Trademark vs. Patent vs. Copyright
Trademarks stand apart from patents and copyrights. A patent grants rights to the design, process, and invention to its inventor, who must fully disclose everything through the USPTO. This provides full protection for a certain period, after which anyone can produce, market, and sell it. You'll see this in pharmaceuticals, where a company patents a drug and holds exclusive rights until generics can enter the market.
Copyrights protect owners of intellectual property, allowing them and authorized parties to reproduce the work for profit over a specific time. This covers books, software, artwork, films, music, and designs. To secure a copyright and avoid infringement, you file with the U.S. Copyright Office.
What Are Intellectual Property Rights?
Intellectual property rights, as defined by the World Trade Organization (WTO), are 'creations of the mind,' and these rights can vary from country to country.
What Type of Asset Is a Trademark?
A trademark is an intangible asset, meaning it has no physical presence, unlike tangible assets such as buildings, machinery, or trucks.
How Are Trademarks Valued?
According to the International Trademark Association, you can value trademarks by estimating future profits from the good or service, comparing it to similar items, determining the cost to replace it with a similar trademark, or measuring expected royalties.
The Bottom Line
In summary, a trademark can be a valuable asset for your business, especially if it's widely known and respected. That's why companies invest heavily in protecting their trademarks and ensuring they stay legally enforceable.
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