The Best Time to Consider a Trademark and Other Important Questions: A Quick Primer for New and Existing Businesses

Part 1: Seven Reasons Why a Trademark Important to My Business

Clients and prospective clients commonly ask, “when is the best time to file my trademark application?” This 3-part series explores and answers this question along with other commonly asked questions related to first steps to take when contemplating a trademark or a trademark application.

How is a Trademark Important to My Business?
Trademarks serve several important functions and benefits. These include:

1. Assisting consumers in making purchasing decisions
Consumers look for brands when deciding what to buy.

2. Helping to market the goods and/or services
Trademarks make a business or a product memorable and therefore desirable.

3. Distinguishing the goods and/or services from those of a competitor
How is one product or service different from another? How will consumers select a product or service if the products or services have similar names?

4. Creating an association between the quality of the product and the source
An HERMES brand purse has a markedly different quality and appeal than a GUESS brand purse. Each will be sought after by a different type of consumer.

5. Protecting the reputation of the source of the product and/or services
Consumers can conflate similar-sounding trademarks, and in a worst-case scenario, attribute a bad experience to the wrong product or service, especially if they aren’t clear on the source (the provider).

6. Ensuring that the owner of the trademark gets the financial rewards associated with it
Trademarks create value for a business, whether through licensing or just brand appeal.

7. A trademark is a sellable (transferrable) asset
Trademarks have financial benefits for a business and can increase the sale price or desirability of a business.

Nearly every business selling products and/or providing services can benefit from having a trademark (a unique name that distinguishes their business from others) and from registering that trademark. This can include businesses as ubiquitous as doctors, pizzerias, and hair salons, especially where they attract customers from out of state. Unlike patents, applications to register trademarks may be filed at any time (there are no statutory time bars), and trademarks can be successfully registered even years after they were first put into use. Trademarks (and trademark registrations) have numerous benefits for a business and should be a primary consideration for any new endeavor.

When is the Best Time to Consider if a Business Needs a Trademark?
Unlike with most legal questions, this one has a definitive answer. Trademark considerations, such as whether a trademark is available for use or registration, should be contemplated at the beginning or outset of the business endeavor. This means at the time when the business name is being selected, and before a domain name has been purchased (especially if the domain name is an expensive, dictionary term). If the business will be manufacturing a product, a trademark should be considered before the product has been manufactured and the name placed on the product or product packaging. In short, thinking about trademark protection is and should be an essential part of a business startup checklist.

Can a Trademark Application be Filed After Use of the Trademark Begins?
Business owners may encounter a few barriers when dealing with registering their trademark. Some business owners may not see why registering a trademark is beneficial until the business has been underway for some time. Others may not be aware that the name of their product or service can or should be registered. In some cases, a business owner may wish to file a trademark application, either immediately after the adoption of a trademark or after long-term use of a trademark, but may mistakenly believe that they can’t afford it, or be afraid to approach an attorney for help.

How Can a Small Business Afford a Trademark Attorney?
With trademarks, an ounce of prevention is worth a pound of cure. For example, failing to conduct a search before adopting or filing a trademark can result in significant costs later. These additional costs may be due to having to defend against a claim of trademark infringement or because delays in filing a trademark application have created additional challenges in the trademark registration process. In these cases, a search could have uncovered these issues, and added insight to the process. Even after long-term common law use, business owners can still glean significant value from securing a trademark registration.

A significant proportion of trademark searching and filing may be done on a flat fee basis, and the costs for a trademark application are usually spread out over time. In some cases, a trademark can go from filing to registration, with no significant roadblocks, but this is highly dependent on the mark and the goods. Typically, the process takes 1-2 years from filing to registration, assuming there is use in commerce. Nonetheless, for businesses where costs are an issue, there are strategies that can help minimize these costs, or at least temper them later down the line.

Part 2 of this series will examine the next steps in the trademark process, specifically trademark searches.