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Trademark Basics: Part I- What is a Trademark?

A lot goes into building a business—from nurturing an idea and developing a business plan, to raising capital and agonizing over what to call your fledgling endeavor – each piece is a vital part of the overall structure. Your business name and branding are the face of your company, and crucial to its success. The last thing you want after spending all that time and effort is to receive a stern letter explaining the myriad of ways your business is infringing on someone’s trademark and threatening you with a lawsuit.

Before you are forced to take down your domain, and toss the fancy new stationary, it is a good idea to speak with an attorney and evaluate the likelihood that your carefully chosen brand will create trademark infringement problems down the road. For starters, it is important to understand what a trademark is and what it does. A trademark is any name, slogan, logo or design (or some combination thereof) that identifies the products or services produced or provided by a company. The purpose of a trademark is to allow consumers to easily distinguish your goods or services from someone else’s. As the owner of a trademark, you have a limited right to exclude others from using your mark in connection with similar goods and services.

In essence, trademarks protect the time, effort and money that you put into building customer loyalty and trust. Trademark infringement occurs when a person or company uses someone else’s trademark for their products and services in a way that is likely to confuse consumers regarding the source of the goods or services. The main purpose of a trademark is to prevent another business from using consumer confusion to get more business. When a company uses a deceptively similar mark to sell inferior goods and services, they are reaping the benefits of your reputation and commitment to quality. Even worse, consumers may begin to associate their inferior product with your brand.

Trademarks don’t just protect the owners of a mark from the illegitimate diversion of their business, they also protect consumers from being misled. We live in a time when consumers are surrounded by a seemingly infinite number of goods and services. Faced with such a daunting array of choices, trademarks help consumers make a judgement about goods by assuring them that items with a particular source-identifying mark are produced by the same company as goods that he or she liked in the past. By allowing consumers to easily organize information about products and services, trademarks improve the quality of information in the marketplace and reduce consumer costs. Trademark laws protect the integrity of a brand, and allow consumers to rely on these source indicators when making purchasing decisions. This benefits consumers by lowering the cost of searching for products in a crowded and confusing market, and helps prevent consumers from being misled into buying products they do not want.

Whether you are creating a new business, or if you are just worried that your business name may be infringing on someone else’s rights, it is a good idea to speak with a trademark attorney. Your brand is a valuable asset, and taking the time to ensure your trademark is protectable and enforceable can save you from future legal headaches.

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