Trademark Law

SPARC International, Inc.® owns all of the SPARC trademarks and under licensing agreements allows the proper use of these trademarks by its members.

This section contains a discussion of trademark law, and is designed to enable those who are interested to gain greater understanding of the concepts and principles which form the legal basis for SPARC International’s trademark program. Although this material has been prepared by SPARC International’s legal counsel, it is not intended to address specific questions about particular trademark matters which arise at member companies. You should consult directly with the responsible attorney at your company in dealing with such issues.

A. What is a Trademark?

Perhaps the best way to introduce trademark law is by defining the term “trademark” itself. In both a legal sense and according to the dictionary, a trademark can be defined as: a word (or words), a name (or names), acronym, slogan, graphical symbol, device, or even a melody or fragrance — or any combination of these elements — that has been adopted by a manufacturer or retailer for use in connection with its products to identify their origin and to differentiate them from the products of competitors.

B. Weak and Strong Trademarks

As a general rule, the authorization of new SPARC trademarks is the prerogative of SPARC International which will evaluate a potential mark by its suggestiveness, sound, uniqueness, and customer appeal. However, the exercise of selecting new trademarks can turn into a legal nightmare if the implications of trademark law are not also a part of this selection criteria. For example, an improperly selected trademark may be unenforceable against subsequent users and may, in fact, be enjoined (i.e., prohibited from further use). Unfortunately, legal entanglements often surface only after considerable financial and marketing effort has been invested in a selected trademark and only after the mark has begun to achieve wide customer recognition. One of the primary objectives of this discussion is to provide a reasonably comprehensive review of trademark law so that SPARC International members considering the adoption of new trademarks will select distinct and viable new marks.

It is a fundamental of trademark law that the first user of a particular trademark has “priority” over all others who might later seek to use that mark (or a confusingly similar mark) in conjunction with similar goods or services. Such a trademark — if it has never been used before by any other company — is said to be “unique”. Unique marks are “strong” marks in the sense that (by definition) they will not cause consumer confusion in the marketplace. Unfortunately, unique trademarks are becoming increasingly rare as the catalogue of marks in commercial use continues to grow.

Being the first to use a particular trademark is not an absolute guarantee of trademark strength. The actual meaning, form, and content of the trademark itself will also greatly affect its legal viability. This is to say that trademarks should be selected with an eye to their inherent distinctiveness. The courts have determined that the more “distinctive” a trademark is, the greater protection it will be given. The courts grant greater protection to distinct trademarks because distinct marks best serve the consuming public in making purchasing decisions and in avoiding marketplace confusion. Depending on relative distinctiveness, trademarks will receive different degrees of protection ranging from legally “unassailable” to legally “unavailable”.

The following is a hierarchy of the more commonly recognized categories of trademark distinctiveness arranged from the strongest marks to the weakest. Strong marks will receive a higher level of protection against potential infringement than will relatively weak marks. To the fullest extent possible (or commercially feasible), SPARC trademarks should be selected from within the strongest category available.

Fanciful Trademarks

Fanciful trademarks are marks that in and of themselves have no meaning — either as words (in English or any other language), phonetic equivalents or as abbreviations. Fanciful trademarks are often called “coined” marks because they are created (or minted) without reference to a dictionary, textbook, or any other source. Fanciful trademarks are the most distinctive and therefore the strongest possible marks and will be afforded the greatest legal protection. Examples of fanciful marks include: “Exxon”, “Kodak”, and “Xerox”.

Arbitrary Trademarks

Arbitrary trademarks are composed of words, phrases, or abbreviations that may be found in commonly available sources such as dictionaries or textbooks and which have easily understood meanings. However, these meanings have no relationship to the products or services with which they are associated. Arbitrary trademarks are also considered by the courts to be distinctive marks and they will also receive extensive legal protection. Examples of arbitrary marks include: “Apple”, “Sun”, and “Lotus”.

Suggestive Trademarks

Like arbitrary trademarks, suggestive trademarks are composed of words, phrases, abbreviations, etc. which have well defined meanings. However, unlike arbitrary trademarks, these meanings are considered to be at least indirectly descriptive (or ” suggestive”) of some feature of the product or service. But, some exercise of the imagination is still required to mentally connect the mark to the product or service. Although suggestive marks are also accepted and enforced by the courts, they are more frequently subject to legal challenge by third parties. Examples of suggestive marks include: “Intel”, “Wordstar”, “Dbase II” and “Wordperfect”.

Descriptive Trademark

Descriptive trademarks are composed of words, phrases, abbreviations, etc. that have specific meanings. However, unlike arbitrary or suggestive marks, these meanings describe some salient feature of the relevant product or service. Descriptive marks are considered to be weak and only become legally enforceable after years of use. Examples of such trademarks include “National Semiconductor” and “General Electric”.

Generic “Trademarks”

Strictly speaking, generic marks are not true trademarks at all. In fact, generic marks are terms that have eventually become a part of the common vernacular to describe the very products that they once sought to distinguish. Thus, generic “trademarks” are the proverbial “bone yard” for once viable and even quite strong trademarks that were lost through neglect, misuse and/or abuse. Good examples of generic marks are: “aspirin”, “cellophane”, “escalator”, “harmonica”, “linoleum”, “trampoline”, “yo-yo”, “zipper”, and more recently the “386”.

C. Properly Maintaining Trademarks

The best way to protect trademarks is to use them — and that means both to use them widely and to use them wisely. Probably the most common means by which trademarks can be lost are through lack of use (or “abandonment” in the parlance of trademark law) or through misuse. The loss of a trademark due to abandonment is easy to understand. The courts will not prevent the adoption of a mark by a subsequent user if the original user no longer utilizes the mark. However, the loss of a trademark through misuse is not quite so straightforward. Basically, a trademark will receive the widest possible protection from the courts if it is used in compliance with a few simple but hard-and-fast rules of proper usage. For ease of reference, these “rules of usage” have been distilled into the following:

      1. Rule 1: When a trademark is used in printed materials, always distinguish the mark in relation to other words in the body of the text. The objective of this rule is to emphasize the trademark so as to enhance its visibility. To this end, trademarks are frequently distinguished by being printed in capital letters within the text of a document.
      2. Always adhere strictly to the use of the correct form of a trademark. This rule should be followed whether the trademark is an acronym, a word, words or a graphic design. Accordingly, verbal trademarks should not be modified by abbreviations, translations or connection (by a hyphen or otherwise) to other words or trademarks. All logos should be reproduced in strict compliance with the established graphical form and in the correct colors.
      3. Always use the trademark as an uninvested (i.e. unaltered) adjective. In other words, a trademark should not be used as either a noun or a verb in a sentence. Nor should a trademark be made into a plural, a possessive, or otherwise modified. Thus, a trademark should be used only as an adjective which is followed by the “generic” noun best describing the product or service to which it refers. In summary, a distinct trademark of long standing and proper use is granted almost absolute legal protection. The key to proper trademark usage lies in “consistency”. If a trademark is used consistently and correctly — with the same spelling and in the same grammatical format — that mark’s strength will not be diluted and, in fact, will grow over time. By contrast, a descriptive or improperly used trademark is granted little if any protection. This result follows in large part from the value that a particular trademark has or can be expected to acquire in the consuming public’s decision-making processes when evaluating competing products. It should be remembered that the object of the law on this subject is to protect the consumer and not to protect the trademark itself.

D. Registration of Trademarks

In the United States, trademark rights are acquired from the moment marked products enter into the stream of commerce (i.e., are first sold). These “automatic” trademark rights are granted as “common law” rights (that is, they are not derived from statutory laws but are based on a long series of court decisions). Although these common law trademark rights do not require a formal act of trademark “registration” to become enforceable, the legal protection these marks will receive is much less certain and not nearly as broad as those secured via formal registration of the mark. As a practical matter, federal registration of a trademark provides the best means of protection available.

Federal protection of trademarks can only be achieved through the formal registration of a mark with the U.S. Patent and Trademark Office (the “PTO”). Although federal trademark registration provides the trademark owner with many valuable rights, securing these rights is sometimes a difficult, time-consuming and costly task. In large part, the difficulty in achieving federal trademark registration lies in the requirement that the PTO carefully scrutinize trademark applications to determine each mark’s uniqueness, distinctiveness and suitability for use in commerce. In fact, it has recently been estimated that over 80% of the applications filed for federal trademark registration are initially rejected by the PTO. However, the proper selection of distinctive trademarks can greatly enhance the chances of achieving a satisfactory and economical federal registration. As a rule, the greater the ingenuity and deliberation required to associate the trademark with the product or service, the easier the task of registering that mark will be.

Federal trademark registration is initiated when a formal application and the requisite filing fee are submitted to the PTO. Registration will be granted if the examiners in the PTO determine that the trademark applied for: (i) is not confusingly similar to an already registered trademark, (ii) is reasonably distinctive, and (iii) complies with certain specific statutory requirements as to content. The statutory content requirements prohibit the registration of trademarks that are misdescriptive, deceptive, scandalous or falsely suggest a connection to well known persons or institutions.

As a matter of statutory procedure, before formally registering a trademark, the PTO will publish the mark for “opposition”. If the trademark remains unopposed during this opposition period (30 days) by any persons or corporations who might object to its use, the mark will be “allowed” and entered in the so called “Principal Register” of the PTO. Federal registration of a trademark is subsequently attained when the PTO issues the trademark owner a “Certificate of Registration”. The “Certificate of Registration” will grant the trademark owner the exclusive right to use the mark with respect to certain categories or classes of goods and services designated by the owner. In the United States there are 42 classifications for goods and services, ranging from chemicals to computers. SPARC trademarks are commonly registered in classes 9, 16 and 42 which cover computers and software, manuals and services respectively.

A trademark that has been accepted by the PTO for publication in the Principal Register will provide the owner and its licensees with numerous legal advantages in preventing subsequent infringement of the mark. Among the more important advantages are:

      1. First, federal registration puts all potential infringers on notice that the trademark has been claimed. Thus, the courts will not look favorably on an argument that a subsequent user (i.e., infringer) innocently adopted the mark.
      2. Second, the mark is given a presumption of validity if later challenged in court. If the PTO has accepted a mark for registration, arguments by others that the mark is overly “descriptive”,
      3. Third, registration entitles the owner to sue in the federal court system to protect the mark. Without prior federal registration, a trademark owner can only resort to state courts to enforce or preserve a mark and, as a general rule, the remedies available for trademark infringement in state courts are limited.
      4. Fourth, registration entitles the owner to recover lost profits, damages (treble damages if the infringement is determined to have been willful), the costs of litigation, and even criminal penalties (where counterfeiting is proven).
      5. Lastly, registration enables the trademark owner to have the U.S. Customs stop the importation of goods bearing an infringing mark and to order such goods destroyed.

At the end of five years of unchallenged federal registration on the Principal Register, a registered trademark achieves legally “incontestable” status and is no longer subject to challenge by third parties. A registered trademark will remain protected for a term of ten years (provided that the owner offers the PTO the occasional required proof of continued use). After the expiration of the initial ten-year registration period, registration may be repeatedly renewed for subsequent ten-year periods (for as long as the owner continues to use the mark).

Prior to 1988, federal registration of trademarks could only be applied for after the mark had been used in interstate commerce. Unfortunately, if problems arose during the registration process, valuable time, energy and investment in an unregisterable mark might be wasted before the PTO made its final decision. Now, however, applications for federal registration can be filed with the PTO before the mark has actually been used. Under new ” intent to use” registration provisions, a trademark owner can seek registration (and subsequent publication for opposition) prior to investing heavily in the marketing effort associated with a trademark that may ultimately be either unregisterable or strenuously opposed by one or more competitors. The “intent to use” registration procedure will reserve a trademark for up to three years before proof of actual use will be required to complete registration. Members planning to develop new marks may want to consider utilizing these “intent to use” provisions.

Registration of a trademark is also possible on the PTO’s “Supplemental Register.” Although registration on the Supplemental Register is more easily obtained from the PTO because there is minimal review of the mark by the PTO examiners, the ensuing legal protections are much less expansive than those afforded to marks appearing in the Principal Register. Therefore, in general, SPARC International does not seek to register its trademarks by requesting a listing in the Supplemental Register.

E. The Proper Marking of Trademarks

As explained earlier, a trademark owner gains certain “common law” rights to a mark commencing immediately upon first use of the mark. To enhance the enforceability of these common law trademark rights, and to put potential infringers on notice that the trademark has been claimed, an unregistered trademark should always be followed with the superscript “TM”. However, the use of this superscript is not required each and every time the mark is used throughout a printed publication. It is only a requirement that the superscript be used when the mark first appears within the body of the written text. Additionally, a clear annotation or footnote located in a convenient spot (following the text in a printed publication or in a lower corner of advertising literature) should specifically attribute ownership of the mark.

A federally registered trademark (and only a federally registered trademark) should be followed by the statutory trademark notice symbol “®”. As with unregistered trademarks, the superscript need be used only with the trademark when first encountered in the body of the written text. Additionally, as with the common law superscript “TM”, a footnote should indicate that the trademark has been registered by the owner. Using the symbol “®” as a superscript with a trademark that is not listed on the Principal Register is a federal offense.

Because the proper marking of a trademark is so important to trademark law, another rule of trademark usage is in order:

Whenever a trademark is first encountered in the text of a document or wherever a mark used in isolation on product packaging or advertising literature, it should be followed by the appropriate superscript (the “TM” for unregistered marks or the “®” for registered marks). Additionally, a footnote, conveniently located somewhere on the document or in the text, should attribute the trademark to its owner. For example, if the registered trademark “XYZ” were used in the text of a printed article, it would be written “XYZ®” when first used and be followed by a footnote to the effect that “XYZ is a registered trademark of XYZ Company, Inc.”

F. International Trademark Registration

Additionally, many foreign countries require the identification of trademarks with symbols other than the “®” or “TM” superscript used in the United States. For example, in many Latin American countries the superscript indicating trademark registration is “MR” for “Marca Registrada” and use of the “®” is of no significance. Thus, for labels, packaging, advertising literature, etc. prepared for use in specific foreign countries, you may wish to consult your counsel.

G. Selecting New Trademarks

Care in selecting a new trademark should focus on two overlapping areas of general concern (one area is the marketing appeal of the mark and the other area is the legal viability of the mark). From a sales and marketing perspective, a trademark should be selected based on a number of business and grammatical criteria including:

    1. being easy to read and pronounce
    2. being easy to remember
    3. not being confusingly similar to the marks of others
    4. having positive implications for the product
    5. being consistent with previously adopted SPARC trademarks

Special consideration should be given to choosing trademarks that fit within SPARC International’s already selected trademark styles and patterns. As explained previously in this booklet, a trademark should be selected only if it is both “unique” and “distinctive”. The most desirable trademarks are coined marks or marks that rank high on the so called ” distinctiveness scale” set forth in the previous section.

H. Protecting Trademark Rights

Since trademarks are by law indicators of the origin of the goods they designate, it is essential that SPARC International maintain control over the use of its trademarks. Thus, SPARC International will grant member companies permission to use its trademarks only under license.

SPARC International licenses members to use its trademarks provided certain legal requirements are observed. For instance, in all SPARC trademark licenses the member has: (i) acknowledged the validity of the SPARC trademarks, (ii) agreed not to use deceptively similar marks of its own, and (iii) agreed to use the SPARC marks only in accordance with the guidelines set forth in this booklet. Perhaps most importantly, in each of these licenses, SPARC International has retained a solid element of control over the quality of the products with which the marks will be used. Because SPARC trademarks are a “stamp of quality,” the use of SPARC trademarks on promotional materials must be approved in advance by SPARC International.

It should be mentioned that not all uses of the SPARC trademark by others will require prior authorization. For example, one-time use of one or more SPARC trademarks in third party advertising, literature, professional articles, news releases, etc. will not normally be opposed by SPARC. However, when a SPARC trademark is used by others, the use of the mark must nonetheless follow the rules of trademark usage set forth in this booklet. It is especially important (as a legal matter) that the use of SPARC trademarks by others be noted with both the appropriate trademark symbol and the corresponding footnote attributing the trademark ownership to SPARC International.

All member organization employees should remain vigilant to the misuse of SPARC trademarks by others. Additionally, members should also remain alert to the use by others of trademarks that are, or appear to be, confusingly similar to any SPARC trademarks. Any member who becomes aware of an unauthorized or incorrect use of a SPARC trademark should immediately notify SPARC International so that appropriate corrective action may be taken.