At various stages of development, a small business owner may ask themselves – should I spend extra time and money on registering a trademark? The short answer is, well, “it depends.” On the one hand, a business may want to register a trademark for many reasons – a trademark can help establish your business brand, it can prevent other companies in overlapping regions from using your name [1], and it can save a substantial amount of cost (and headache) from a potential infringement action [2]. However, a trademark is not cheap; it costs a substantial amount of time and money—which are both critical resources that may be particularly scarce when starting up a business.

This article will provide general information about what types of trademarks may be suitable for small businesses, why a small business owner may want to register a trademark, and where a small business owner may be able to seek further legal guidance.

Trademarks that may be suitable for small business owners

There are five primary categories of trademarks: (1) general marks; (2) descriptive marks; (3) suggestive marks; (4) arbitrary marks; and (5) fanciful marks. The first two categories are generally considered “unprotectable” under the law, since they are too generic or common to be protected:

(1) General Marks mean exactly what they sound like—they are generic. For example, if a pear juice producer calls itself “Pear Juice” and intends to register “Pear Juice” as its trademark, the mark is most likely unregistrable because the term “pear juice” is generic and, thus, free for everyone to use.

(2) Descriptive Marks typically describe goods or services offered. Using the pear juice example again, let’s say the company now wants to register the mark “Fruity and Sweet Juice.” This mark is also likely to be unregistrable and unprotectable by law because both “fruity” and “sweet” simply describe the traits of the pear juice. However, an exception for descriptive marks to gain legal protection is sometimes acquired through the concept of “secondary meaning.” A secondary meaning is “an additional meaning acquired by a non-distinct trademark through its commercial use [3].” In plain words, a secondary meaning is attached to a trademark when customers can start to associate a mark with goods or services represented by this mark. An example is KFC’s registered slogan, “It’s finger-lickin’ good,” which is descriptive of the fried chicken they sell, but through this slogan’s use over the years, customers now associate this slogan with KFC. The association originated from KFC’s commercial use of this slogan in its chicken sales. In general, a presumption of “secondary meaning” will attach to trademarks once they are used for five years.

The next three categories are often “protectable” by registering them with the United States Patent and Trademark Office (USPTO) or common law:

(3) Suggestive Marks vary from descriptive trademarks in that they reference products rather than merely describing them. For example, a sun-tanning product named “Coppertone® suntan oil” is suggesting that using this product, your skin will turn to a glowy copper tone [4]. The mark prompts shoppers to make inferences through imagination and come to a message that is suggested by the mark.

(4) Arbitrary Marks are, quite frankly, arbitrary. Earlier, we discussed that calling a pear juice company “Pear Juice” falls under a generic mark, but if a company selling something completely different than pear juice, like electronic devices, for example, calls itself “Apple®,” the trademark falls under arbitrary trademarks and is immediately protectable.

(5) Fanciful Marks are made-up words and are the strongest of all trademarks. Some of the most famous fanciful trademarks include Pepsi®, Google®, and Xerox®. Does it sound like too sweet of a deal to just make up a random brand name and roll with it? Perhaps. Fanciful marks come with a plot twist, however—if a famous fanciful trademark is used by customers to refer to a general type of goods because this mark is overly representative of a type of goods, the mark falls directly into the generic category. This process, called “genericide,” is a nightmare to many overly famous trademark owners. To illustrate this concept, think about the drug “Aspirin” as an illustration. Aspirin was a brand name and trademark held by Bayer. However, due to incompetent trademark protection and the public’s frequent use of the word “Aspirin” in connection with a type of fever medicine, Bayer’s eventually lost the trademark “Aspirin” to genericide.

One precaution about fanciful and arbitrary marks that we advise small businesses and startups is to avoid mimicking or adopting elements of other famous trademarks when selecting a name or logo for the new business. If your business starts to use a name or logo that is too similar to an existing company’s trademark, there is a substantial risk that your business will be forced to stop using its name and/or face a very costly lawsuit.

Why small business owners might want to register their trademarks?

There are many benefits associated with registering your business trademarks:

Establishing a Reputation & Building a Brand – Having a trademark can help a business establish a solid reputation about its goods and services. Making clear exactly which goods or services your business produces is important because people tend to be brand-loyal. In addition, when other goods and services brand and advertise themselves, a newcomer providing competing products is often at a disadvantage because customers recognize the branded products and will often revert to choosing products with more familiar names.

Minimizing Risk of an Infringement Lawsuit – Performing a thorough trademark search before selecting a trademark can help a business minimize the risk of a trademark infringement lawsuit. Large corporations are often attentive to emerging companies infringing on their famous trademarks, and many mega brands employ a “watch service” to look after newly registered trademarks so they can oppose trademarks and “demolish” any small guy who they think is trying to take a “free-ride” on their famous marks.

For example, in 2018, Monster Energy Company (“Monster”) filed a lawsuit against a smaller energy drink company, BeastUp LLC (“BeastUp”) alleging that BeastUp infringed on Monster’s trademark [2]. Monster sought to stop BeastUp from using the claw mark and anything associated with the word “beast” on the BeastUp’s packaging. The court ultimately ruled in favor of Monster, despite some evidence that BeastUp’s packaging did not really look like that of Monster’s.  The court concluded that there were certain similarities such that the two brands’ packaging may create a likelihood for energy drink shoppers to misidentify the origin of BeastUp and falsely attribute BeastUp’s products to Monster Energy. This lawsuit was very costly to BeastUp, and it could have potentially been avoided had BeastUp taken a more conversative trademark approach.

Where to go from here?

Hopefully, this article helped to explain some of the key differences between the most common types of trademarks that a small business may be considering. And, hopefully this article also underscored the legal risk associated with a potential trademark infringement claim.

But where can you go for more information? There are a lot of online resources to help small business owners better understand trademark law. One source, the United States Patent and Trademark Office (USPTO) website, has particularly helpful information about trademark law and the registration process for small business owners. And there are many other sources, often making it challenging to navigate what is truly helpful. While an attorney is not always necessary, an experienced trademark attorney may be able to help.

If you are a small business owner in Riverside or San Bernardino County, and you are seeking trademark guidance, Inland Counties Legal Services (ICLS), a nonprofit legal-aid organization serving Riverside and San Bernardino Counties, may be able to help. For eligible small business owners, we offer free legal clinics where you can meet, 1:1, with a volunteer attorney to discuss legal issues relevant to your business, including trademark law (and many other areas of law). To apply (and please note there are eligibility requirements, including maximum income and revenue thresholds), please visit (English) or (Español), or call our Intake Team at (888) 245-4257.

For more information about ICLS’s services, visit the ICLS Small Business Legal Clinic website: https://www.inlandlegal.org/get-help/smallbizclinic/. If you have any questions, please reach out to Matt Kugizaki at (951) 320-7516 or mkugizaki@icls.org.

Disclaimer: This material is a legal advertisement and has been prepared for informational purposes only. Simply registering for, or attending, a small business legal clinic or informational webinar does not automatically create an attorney-client relationship with the ICLS or any participating attorneys.

ICLS is a non-profit 501(c)(3) corporation serving Riverside and San Bernardino Counties and receives federal, state, and local county funding. Funders include the Legal Services Corporation, State Bar of California Interest on Lawyers’ Trust Accounts (IOLTA), State Bar of California Equal Access Funds, San Bernardino County Department of Aging and Adult Services and Riverside County Office on Aging. A full list of current funders is available upon request. See https://www.inlandlegal.org/.

References

[1] Sam Mollaei, Do I need to trademark my business name as a small business owner? Built In LA, Feb. 1, 2016, https://www.builtinla.com/blog/do-i-need-trademark-my-business-name-small-business-owner (last visited Oct 4, 2022)

[2] Monster Energy Co. v. BeastUp LLC, 395 F. Supp. 3d 1334 (E.D. Cal. 2019) (Monster Energy Co. brought a claim against BeastUp LLC to stop BeastUp from using claw marks, its “BEASTUP” mark, and any variation of the word “beast” on its energy drinks)

[3] Cornell Law School Legal Information Institute, Wex. (Aug. 2021)

[4] https://www.uspto.gov/trademarks/basics/strong-trademarks

Written by: Xiaohan Sun, ICLS Law Student Volunteer