Selecting a trademark for business – Best legal practices

AditiIntellectual Property, Trademarks0 Comments

How to select a trademark for business - Best legal practices

What’s in a name? That which we call rose by any other name would smell as sweet!” These words by Shakespeare fall flat today when it comes to the use of brand names for trade. Branding and promotional activities revolve around brand names. Therefore, they are as significant today for a business as its organizational structure or quality maintenance. Hence, you ought to give a major consideration for selection of a new trademark or brand name for your business.

After reading this article you should get answers to all the following questions and more:

  • What are the factors to consider while naming a business or company?
  • How to name a company and avoid legal troubles?
  • What are some tips and guidelines for choosing a good trademark for my business?
  • What are the characteristics of a good trademark?
  • What trademark mistakes to avoid while naming a business?

Intent of a brand name

A brand name is something that conveys an image about a business. So, it should be something that leads third parties to perceive the brand with the positivity or progressiveness of a business.

Not against public order or morality

If not positive or progressive, a brand name should at least not don any negative connotation. Like scandalous names, obscene marks or marks that go against the accepted notions of morality. They not only give negative connotation about the business, but also are considered downright non-registrable the world over. In India and most other foreign jurisdictions, scandalous and obscene marks are prohibited from registration by law.

For example, while RAPE CULTURE for clothing and apparels would be prohibited from registration, SAY NO TO RAPE for social services could be allowed. It is a good idea to conceive a brand name on the basis of a moral value with which a business identifies itself.

Trademark strength

By law, a strong mark is easy to enforce against third parties. Also, more the strength of a mark is, more the mark is registrable under the law. Therefore, it is important to understand which marks are strong while selecting a trade name or mark. Trademark strength is dependent on the nature of the word used as trademark.

Classification of Trademark based on a trademark’s strength.

Based on strength, there are five types of marks:

1. Inventive or coined Trademarks

Words that are made fancifully or derived by merging two or some words; examples are KODAK (newly invented) for cameras, or IBM (derived from International Business Machines) for technology products and services; these words are considered to be the strongest trademarks;

2. Arbitrary Trademarks

Words that are already existing but are arbitrarily used in relation to products or services without drawing any connection to the nature of such products or services; examples are APPLE for technology services and mobile phones, or YAHOO! for online search engines; these words are considered weaker than inventive marks, but stronger than other types of marks;

3. Suggestive Trademarks

Words that do not directly describe goods / services, but in a way gives an indirect suggestion to third parties about the same, which slowly lead to association with the goods / services by imagination; for example, LinkedIn for online professional network, or JAGUAR for cars; suggestive marks are weaker than inventive or arbitrary marks, but stronger than descriptive or generic ones;

4. Descriptive Trademarks

Words that make direct reference or connection with the nature, description or quality of goods or services; for example, BIG BAZAAR in relation to supermarkets, or SUPERIOR for light bulbs; such words are considered extremely weak marks and not considered inherently registrable; having said that, some descriptive marks could qualify for registration – to know when is a descriptive mark trademarkable, refer to the later part of this article.

5. Generic Trademarks

Words that are the common names of products or services; for example, FOUNTAIN PEN for pens, or SEARCHER for online search engines; such words are also considered extremely weak and not allowed to be registered.

Coined and arbitrary marks are considered inherently distinctive in nature. Therefore, strong trademark rights subsist with their owners. Even suggestive trademarks are considered inherently registrable. Please refer to a note by World Intellectual Property Organization (WIPO) for creating or selecting a trademark in this regard.

Due to inherent non-distinctiveness, descriptive and generic marks are prohibited from registration under trademark laws around the world. Principally, such words cannot belong to one party alone, and are open to all traders for commercial usage.

When is a descriptive mark trademarkable?

Descriptive marks are considered registrable, if they have been used for a long time and have acquired distinctiveness by way of such use. In other words, they are registrable, if they have acquired a secondary meaning in relation to the proprietor’s goods or services.

For example, SHARP – for televisions, is a descriptive mark that has acquired a secondary meaning in relation to televisions. Similarly, the name INTERNATIONAL BUSINESS MACHINES (that is different from IBM – derived therefrom) is a descriptive phrase that has acquired secondary meaning as well as trans-border reputation for technology business.

A legal analysis of a decision passed by the Intellectual Property Appellate Board, India (“IPAB”) in ‘Overseas Pvt. Ltd. v KRBL Ltd. and another’ should be referred to in this regard. A descriptive trademark BEMISAL was allowed to remain registered in respect of ‘rice’.

Misspellings do little

The misspellings of generic and descriptive names are also not considered different than the actual words. A misspelling could be considered trademark-worthy only if it has other distinctive features, or is not obvious, or has been used substantially for a long time (enough to acquire distinctiveness). An example is QUIKR, a misspelling of QUICKER; the same could qualify for protection and registration if it is long and extensively used commercially or in its distinctive label form.

Suggestive trademarks

As per the trademark law, you should select an inventive or an arbitrary trademark. But as per marketing and branding professionals, you should adopt descriptive and generic words as brand names. This is because descriptive and generic words are easy to remember! Such brand names become popular with less marketing and promotional efforts. One has to keep in mind that descriptive and generic words are not inherently registrable. And the Trade Marks Offices strongly object to their registration on grounds of non-distinctiveness. So, all initial use, branding and promotional activities of such names go in vain when they don’t get registered.

To balance what the law requires and what is easy, a mid-way exists – adopt trademarks that are suggestive in nature! A suggestive trademark serves both purposes – while it is easy to remember, it does not refer to the product / service for which it is used. An elaborate analysis on suggestive trademarks from a legal encyclopedia should be referred to. A landmark European case’s analysis concerning suggestive mark BABY DRY in relation to diapers could also be referred to.

Thus, the most appropriate strategy for identifying a suitable brand name could be – to adopt a suggestive mark.

Conflicts with other brand names

Another important factor to consider is – whether the brand name chosen by you is in conflict with any other mark. A new trademark could cause conflict to an earlier trademark used in similar or different category of goods or services. Similar goods or services are listed in one class under the international Nice Classification of Goods and Services that Indian trademark law follows. For example, medicinal and pharmaceutical preparations fall in class 5; clothing and apparels form part of class 25. Similarly, banking and insurance services fall in class 36; and restaurant and hotel accommodation services fall in class 43.

Generally, only same or similar classes of goods or services are considered for evaluating a conflict. Sometimes, a brand name could be considered conflicting in related or allied classes also. Courts and Intellectual Property Tribunals have on numerous occasions considered goods or services falling in different classes as allied or related. This is because products or services could pass through same trade channels, offered over same counters and the class of consumers could be same. For example, restaurant services and food delivery services could be considered related categories. IPAB has considered Ghee and Dhal allied products in a recent case.

A new mark should not be identical or similar to an earlier mark from same or allied classes of goods or services. Whether a new brand name could be in conflict in an allied class is analyzed on a case-to-case basis.

Conflicts with well-known marks

If a proposed mark is identical or confusingly similar to a famous or a well-known brand name of a different category altogether, the same would be considered in conflict with the well-known mark. For example, SAMSUNG in relation to restaurant services would be conflicting to the brand name SAMSUNG of the internationally-acclaimed Samsung conglomerate. Similarly, TATA in furniture segment would be in conflict with the well-known brand name TATA of the Tata Group operating in various domains.

Various factors determine if an international mark would be considered well-known in India and a potential conflict to a new mark. An internationally reputed mark would be considered well-known in India if it is used or promoted in the country. Even if an international brand is advertised in foreign magazines having circulation in India or on foreign TV channels in India, the brand name would be considered well-known in India. Such an international mark will pose a serious conflict for same or similar brand names.

The Trade Marks Registry in India has compiled a list of well-known marks based on the decisions passed by various courts in India. The same is not an exhaustive list. However, you could still refer to the same and avoid using marks that are same / similar to the marks included in it in order to avoid conflicts in future.

In a landmark decision of the Supreme Court, Whirlpool Corporation established that the US Embassy in India purchased Whirlpool products and that the products were advertised in international magazines having circulation in India.  So, the name and mark WHIRLPOOL was held to be well-known in India. To assess whether an international mark is well-known in India and would pose a conflict for a new mark, it is prudent to seek a trademark lawyer’s opinion. In each case of conflict, the proprietor of the well-known brand name has to establish that their name is well-known in India.

So, it is important for a new trader to conduct market surveys and enquiries about his proposed brand name. This will ensure that his proposed name is not in conflict to any other prior trademark. Market surveys could be conducted in online search systems such as Google, trademark databases, company databases, domain name databases, etc. For more information, you can refer to our guide on conducting a thorough conflicting mark search in India. For understanding whether a new mark is in conflict with another prior mark found, specific opinion should be sought from a trademark attorney to analyze the conflict between two rival marks. Once it is clear that the new mark is not conflicting to any prior brand name or mark, the same could be considered for adoption.

Other considerations

Common names and surnames as trademarks

At times, personal and family names are the first and foremost trade source identifiers. So, some traders choose such names as their brand names. However, common personal names and surnames, like descriptive marks, are generally open to all for use, provided they are not trademarked by others already. Unless they acquire an association by substantial use with a particular type of product or service, for example USHA in relation to household and kitchen appliances, or DR. REDDY’S in relation to pharmaceutical products, or The Trump Organization in relation to various businesses of Donald Trump, the rights of trademark proprietors over them are not concrete and absolute.

Additionally, a prior well-known user gets priority over others users. In a landmark case, Bajaj Electricals Limited, the proprietor of well-known brand BAJAJ, which is its family name, obtained injunction against the use of family name BAJAJ by a third party for kitchen products.

International operations

Another aspect to consider is the extent of international expansion under a new brand name. If a proposed brand name is planned to be expanded and used in any foreign jurisdiction, it is imperative to check if the same is in conflict with any earlier mark from that jurisdiction initially only. Market surveys and enquiries that are conducted to ascertain potential conflicts should cover all the jurisdictions of interest. You must keep in mind the territorial nature of brand rights. Local trademark attorneys of each jurisdiction would be in a position to check for and provide detailed opinion on potential conflicts in their respective jurisdictions.

Concluding remarks

It is clear that a proper diligence should be done and steps taken to find out a good and workable brand name suitable to a business. Selection is not merely based on personal preference; considerations should definitely be given to legal intricacies. Trademark attorneys could be of great aid in selecting and getting a clearance on proposed trademarks.

An ideal strategy would be as follows:

  • Think about your business values and try making a new word around the same for use as your trademark.
  • Do not select a negative trademark.
  • If you cannot come up with a new word and / or a domain name, you could use online tools to invent words. A great compilation of 18 tools is available on Mashable.
  • Still don’t like a new word, try coming up with a suggestive word or word combination – do keep in mind that there is a very thin line between a suggestive and a descriptive mark.
  • Once you have the trademark of your choice, conduct searches and look for potential conflicts – avoid using marks which are similar to well-known names and marks.
  • Look for potential conflicts in relevant foreign jurisdictions also, if you plan to go international in future.
  • Seek assistance from a trademark attorney if you are unable to assess the merits of your trademark.
  • Finalize on the trademark if no conflicts are predicted.
  • To secure statutory rights, file for trademark registration in relevant classes or goods or services.

You may find it unimportant, if not redundant, to do such elaborate and aggressive exercises at the initial stage. However, you have to analyze the importance of selection and clearance exercises versus the weight of legal issues that you may face in the long run during the registration process and also in dealing with potential conflicts.

We look forward to what you think? Do you agree with the analysis? Have another point of view or a point to add? Just drop in your comment and share your knowledge.

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