Banks have established valuable goodwill in such well known names as ALLFIRST[R], CRESTAR[R], and SIGNET[R]. Suntrust Banks, Inc. for example, has federally registered more than 40 trademarks for banking-related products and services, including SUNTRUST[R], SUNTRUST ATM BANKING[R], TOTAL BUSINESS BANKING[R], and VALUTREE[R]. Product names, logos, and slogans can become valuable assets, attracting purchasers who have come to rely on the quality of branded goods and services.
Trademarks generally have little or no value initially, but can dramatically appreciate in value through successful use. And, unlike copyrights and patents that eventually expire, trademark rights can last forever. Trademark rights can last indefinitely if the mark continues to perform a source-indicating function. (The term of a federal trademark registration is ten years, indefinitely renewable for ten-year periods.)
Because trademarks are an appreciating asset with a potentially perpetual life, it is important to choose them carefully and protect them through federal registration and controlled licensing.
What is a trademark?
A trademark is any word, symbol, design, or combination of words and design that distinguishes one seller's goods from another's. For example, the words COKE[R] and EXCEDRIN[R] are both trademarks, as are the Ralston Purina Checkerboard Square design and the hourglass-shaped Coca-Cola[R] bottle. A slogan like Nike's JUST DO IT[R] can also be a trademark.
When used to identify a service, the mark is called a service mark. McDONALD'S[R] is a service mark for restaurant services, as is the "golden arches" design. Some marks function as both trademarks and service marks. LEXUS [R] is both a trademark for automobiles and a service mark when used to advertise automobile repair services. Because trademark law is based on the idea that trademarks serve as badges of quality, legal protections exist both to protect the public from deception and confusion, and to protect the mark owner's goodwill in the mark.
Before distributing a product or advertising a service under a mark, or seeking to register a mark with the U.S. Patent Trademark Office, a trademark search should be undertaken. This will determine whether prior rights in the mark exist. Comparable in some respects to a real estate title search, the trademark search reveals prior users who could prevent registration of the mark or assert a claim of trademark infringement.
Some business owners mistakenly believe that because the Corporations Division of the Secretary of State in their state accepted a corporate charter or trade name filing, the name can be used for any product or service the business promotes. Nothing could be further from the truth. Acceptance by a state agency has no bearing on whether that same name might infringe on another's federal trademark or service mark. Generally, state acceptance means only that no other entity within that state has incorporated or registered to do business under the same name.
Bankers should first conduct a low-cost, online search of federal records, followed by a full trademark search. The cost of a search generally ranges between $400 and $800. Full trademark searches are comprehensive and will reveal whether another user or registrant of the same or a similar mark has established superior rights in the relevant field of goods or services.
Logo designs, on the other hand, require different searching strategies. It is impossible to search designs as thoroughly as words. Typically, the search firm confines its review to a search of similar designs in the U.S. Patent & Trademark Office records.
Trademark search reports provide raw data that must be interpreted and evaluated. For example, a potentially conflicting mark may not be identical or may be used for different goods or services, or a pattern of inter partes oppositions (a type of litigation) may show up in the patent and trademark office file history--all of which need to be evaluated to determine whether a proposed use poses real risks. …