Businesses should add an annual trademark review process to the corporate calendar to ensure maintenance of existing trademarks, to identify new trademarks for which the protections of state or federal registration should be sought, and to identify any terms used by the company not likely to be protected by trademark law or which may give rise to potential liability. Failure to do so could lead to loss of trademark rights, limits on the scope of protection, funds expended to build a non-brand, or potential liability for the business and those who directed its marketing efforts. An annual review provides a regular opportunity to avoid later challenges.

Trademarks are acquired use of a distinctive element in connection with specific goods or services. A trademark is any word, name, symbol, or device, or any combination thereof to identify and distinguish the source’s goods, from those manufactured or sold by others and to indicate the source, even if that source is not known to the potential purchaser. A mark may be (1) fanciful, (2) arbitrary, (3) suggestive, (4) descriptive, or (5) generic. Fanciful, arbitrary, and suggestive marks are inherently distinctive and therefore protectable without an additional showing of consumer identification. At the other end of the continuum are generic marks, which are never protectable because they represent the name of the good or service itself and therefore cannot identify or distinguish a particular source. Descriptive marks fall somewhere in between. These marks which are descriptive may be protected only upon a showing that the mark has become associated in the minds of consumers with the particular, albeit unknown, source. A mark is used on goods when it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and the goods are sold or transported, and is used on services when it is used or displayed in the sale or advertising of services and the services are rendered. Use in interstate commerce, necessary for federal protection, occurs when the goods are 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.

Registration, at the state or federal level, is ultimately predicated on use of the mark, as opposed to the intent to use which can be cited at the federal level to file an application. While not required, registration provides benefits. These include providing rebuttable evidence of trademark ownership, certain damage models, and the potential, depending on the jurisdiction, to seek recovery of attorneys’ fees incurred in the enforcement action. Beneficially, the federal registration generally provides nationwide constructive use nationwide against all junior users as of the application’s filing date – a critical detail as infringement turns on seniority of rights.

While registration at the federal level provides for additional rights and remedies, the full extent of those remedies is conditioned on actual knowledge or constructive notice of the registration. The desirable recovery of profits and damages for trademark infringement is unavailable unless the infringer had actual notice of the registration prior to the damages being sought or was on constructive notice, accomplished by displaying with the mark the words “Registered in U.S. Patent and Trademark Office” or “Reg. U.S. Pat. & Tm. Off.” or the letter R enclosed within a circle (®). Proper notice is therefore essential.

Keeping those rights turns on continued proper use, or brief excusable non-use, of the mark in connection with the associated goods or services. Cessation of use is surrender of the trademark rights. The State of Texas requires renewal of all trademark registrations before the expiration of the fifth year following registration or the most-recent renewal, including payment of a fee and evidence of continued use. The United States requires a maintenance filing in the fifth year after registration, with a six month surcharge window available thereafter, and renewal in the year preceding the 10th year of the registration, with a six month surcharge window available thereafter, and preceding each 10th year anniversary thereafter, likewise with a with a six month surcharge window available. Cessation of the notice requirement jeopardizes the potential to recover profits and damages for infringement of a federally-registered trademark.

Cessation of a mark in connection with the goods may give rise to a claim of abandonment, resulting loss of the associated rights and all good will. A mark shall be deemed to be “abandoned” if either its use has been discontinued with intent not to resume such use or when any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark. In the first of these two, intent not to resume may be inferred from circumstances and nonuse for three consecutive years shall be prima facie evidence of abandonment. The second of these is the associated with marks which have become the standard term – ASPIRIN and THERMOS.

Because these considerations generally arise only during the trademark application process and when maintenance is due, actions in the interim can sometimes frustrate maintenance. In the windows between maintenance filings, product or service lines may change, with some good or services no longer offered under the mark. In those same windows, new product or service lines may be added under the mark. Changes to the brand may also be deployed in those windows. Each of these changes can jeopardize or be outside of the existing registration. The cessation of use of a mark on a product line or service will require dropping the goods or services from the registration at maintenance. New product or service lines may not be directly protected by the existing registration, meriting a new application for the mark in connection with those added product or service lines. A change to the mark, particularly a mark with design elements, can frustrate any attempt to show continued use of the registered mark, preventing maintenance of the existing registration, loss of the benefit of the constructive use date associated with the filing of the application, and loss of the federal trademark registration.

An annual review by the business of the extent of use of all trademarks, registered and otherwise, can reduce the risks identified above. Corporate personnel can create a photographic record of each use by the business of each mark on each of the associated product lines, effective to show prior use in any dispute and for further review as needed. Each trademark registration can be relied upon to identify the mark and those goods or services identified therein, verifying the listed goods or services and flagging any differences. Identification of a lack of use of the registered mark on a listed good or service can prompt the inquiry of whether there has been a cessation of use, whether such use is intended and permanent, and whether the scope of maintenance should be adjusted. Likewise, comparison of actual use to the registration may identify goods on which the mark is used but not covered by a registration – identifying where further registrations may be needed. Alternatively, identification of marks not covered by a registration may flag use of trademarks which may potentially give rise to a claim of trademark infringement. Unfortunately, trademark infringement is a strict liability tort with real risk – no intent to create a likelihood of confusion is required for liability or to recover damages from the company and, in some cases, the personnel who directed the marketing efforts. Comparison of the mark as used against the mark as registered can identify if the mark is still being used and whether further registrations are needed to cover any materially-different versions of the registered mark. Finally, in a connection with a federal registration, a review of use can ensure the mark is accompanied by the required constructive notice effected by the registration symbol ® or other terms.

James E. “Jim” Hudson III is a shareholder in the firm’s Intellectual Property Law Group.  For more information contact Jim here.