Overview of Trademark Law
By Henry J. Fasthoff, IV
Trademark law gives companies the
exclusive right to use a given name or design, called a “mark,” for the purpose
of identifying the source the of that company’s goods or services. Trademark law
is an incentive-based system. Because it gives companies the exclusive right to
 use
a mark in connection with certain goods or services, the company can create a
brand that is recognizable by the consuming public. That trademark would be
associated with and incorporated into every advertisement the company runs for
its goods or services. Repetition of those advertisements containing the
trademark causes consumers to associate the mark with the goods and, with enough
repetition, consumers buy the goods.
A brief, but related, digression.
We all know that if you see a product advertised frequently enough, the product
will sell. You might even be one of the people who buys the product. The
thinking process by which you reached the decision to buy the product is not an
intellectual, logical process. It’s a function of the way the human mind works.
Continually hearing a repeated message makes the message more familiar, more
real, and, eventually, more true. As the adage says, “even the boldest lie
becomes the truth if you scream it loud enough and long enough.” I call this the
“Lie = Truth” Adage. Sadly, I frequently encounter the “Lie = Truth” Adage in
litigation. I also know of some politicians and terrorist masterminds who are
experts at exploiting this fact of human nature.
Back to trademarks. The
advertising departments at most companies know the “Lie = Truth” Adage can be
very successful in advertising. The cynic would pump his fist in the air yell
“Down with the corporations, and power to the people! All the corporations care
about is taking our money at all costs!” While we can point to some recent
examples that might make it challenging to argue against this viewpoint, as to
the overwhelming, vast majority of companies, that view simply cannot be
supported.
Trademark law creates very strong
incentives for companies to make the highest quality product possible and to
advertise their merits and attributes accurately. Aside from the fact that
companies invest anywhere from tens of thousands to millions of dollars into
their trademark(s), all it takes is one bad product line to tarnish a companies
image in the mind of the consumers who buy their products. Both of these factors
hit companies where it hurts them most: in the pocketbook. So, while companies
clearly have to perform a balancing act of creating a high quality product,
keeping costs down, and pulling in as many purchasers as possible, they have
very strong incentives to create a quality product that they will associate with
their trademark.
To be eligible for any level of
trademark protection, a mark must be “distinctive” and not merely “descriptive”
of the goods or services. Whether a mark is distinctive and “how” distinctive or
strong the mark is can be determined by a sliding scale. Marks can be (1)
fanciful; (2) arbitrary; (3) suggestive; (4) descriptive; or (5) generic.
Whether a particular mark is protected by trademark law depends on the strength
category into which it falls.
A fanciful mark is one that is
invented for the sole purpose of being a trademark. For example, EXXON is a
fanciful mark. It is a word that does not exist in the English language and was
created only for the purpose of identifying the oil and gas company.
An arbitrary mark is typically an
existing word that is arbitrarily applied to a product or service that has
nothing to do with the word. For example, the mark APPLE as applied to sales of
computers.
A suggestive mark is a mark that
suggests a quality or characteristic of the goods or services. Suggestive marks
require some level of imagination to bridge the connection between the mark and
the product. For example, the mark PENGUIN as applied to refrigerators.
A descriptive mark is a word that
merely describes a quality or characteristic of a product. Descriptive marks are
not entitled to trademark protection unless they have obtained “secondary
meaning” under the trademark law. An example of a descriptive mark would be
LIGHT to identify a lightweight notebook computer.
A generic mark simply identifies
by name a particular product. Generic marks are never entitled to trademark
protection. An example of a descriptive mark would be MODEM in connection with
modem sales. If trademark protection were allowed in this instance, the company
could essentially remove the word “modem” from the English language.
Henry J. Fasthoff, IV
Principal & General Counsel
HoustonBusiness.com
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