Last week, we discussed the benefits of trademark registration in “What’s in a Name? Lessons learned from current trademark battles.” Equally important, though, is the discussion about potential reasons not to register a trademark. Choosing to forgo registration is not an invitation to avoid due diligence nor engage in trademark violations. Rather, it should be an informed decision, for example, that common law protection is sufficient or that such marks are ineligible for federal trademark registration.
Applying for a trademark is a timely process and may not be the right choice for a mark that is being used only for a short period of time. According to the United States Patent and Trademark Office (USPTO), even the smoothest application process takes almost a year at a minimum from the date of filing before a certification of registration is issued. Furthermore, as Nolo writes in its publication “Frequently Asked Questions about Trademarks”: “Few applications sail through completely unscathed.” The USPTO can raise objections on both technical and substantive grounds, and interested parties have a 30-day window for objections that can potentially be extended for an additional 90 days – all of which requires prompt response from the applicant and will delay the overall process. Consequently, the application timeline is difficult to predict and may take up to several years, well beyond the actual life of the mark.
Costs to protect are disproportionate to the protection needed
The decision to register a trademark is a decision to contribute assets now as well as later to police and maintain that right. The basic paper filing for a trademark registration costs $375. During the application process, the USPTO publishes the mark to allow for interested parties to object. Responding to such objections means more costs for the nonprofit in time and money, for example, in seeking assistance from an attorney.
Furthermore, significant costs will likely continue after registration. A nonprofit may incur additional costs in determining whether an infringement has occurred, writing a cease and desist letter, engaging in negotiations with the alleged violator, or pursuing litigation. A smaller nonprofit may lack the resources to successfully enforce its trademark rights and as a result, lack the necessary leverage to benefit from the protections of federal trademark registration.
Finally, trademark registration is not indefinite. This costly process is cyclical as certificates of registration must be renewed every 10 years for continued protection.
There can be many reasons why the costs outweigh a nonprofit’s concern about trademark protection. For example, a nonprofit may feel its actual good or service creates the consumer loyalty rather than name or phrase. Another example may be a lack of printed materials associated with the good or service and therefore, the fear of re-printing costs (ads, etc.) is low. If the overall concern about protection is low, then spending $375 plus other fees to register and maintain a trademark may do more harm than good to the nonprofit by taking away monies that could go toward a more pressing issue.
Ineligible marks for federal trademark registration
Sometimes, the mark is simply not eligible for trademark registration. A common example is a generic term. Generic terms are not afforded trademark protection. The International Trademark Association defines “generic” to mean “common words or terms, often found in the dictionary, that identify products and services and are not specific to any particular source.” For example, “coffee” is ineligible for trademark registration while “Peet’s Coffee & Tea” is a registered trademark.
Another issue is whether the mark is used within the type of commerce that the United States Congress can regulate, such as interstate commerce. For example, the United States Trademark Manual of Examining Procedure (TMEP) states that “Purely intrastate use does not provide a basis for federal regulation”; only intrastate use that “directly affects a type of commerce that Congress may regulate” is within the ambit of federal regulation. See TMEP Section 901.03. Therefore, a potential applicant may discover that the mark does not even qualify for federal trademark registration.
In the end, both sides of coin reveal the types of concerns a nonprofit
should address regardless of which path it ultimately chooses.
The Pro Bono Partnership publication, “Frequently Asked Questions About Trademarks and Service Marks For Nonprofit Organizations,” is available here.
Nolo’s “Frequently Asked Questions about Trademarks” is available here.
The International Trademark Association’s article “Trademarks v. Generic Terms” is available here.