Selecting Strong Trademarks - Aug 31/2016
Those with a marketing or advertising background are often the first to suggest a name that "says it all" to consumers. There is logic in this, immediately after passing a restaurant with the name "Hamilton Coffee Shop" a potential consumer knows more or less what goods and services the business is offering. The name attempts to immediately undertake the heavy lifting when it comes to marketing; however, a descriptive name of this nature also has distinct disadvantages that may in the long-term outweigh the initial marketing benefits.
Again using the hypothetical "Hamilton Coffee Shop" as an example, its descriptive name may initially be beneficial; however, this benefit will soon diminish if it fails to distinguish itself from its competition—which may operate as "West Hamilton Coffee Shop" or "North Hamilton Coffee Shop". Conversely, the value of an inherently strong name grows considerably over time as an indicator of reputation and goodwill.
Strong names tend to exhibit the following characteristics:
- they are short, usually two words or less;
- they are not descriptive of their goods or services; and
- they are unique, arbitrary and often fanciful in that no one else is using that name– they are often coined words or invented words (not found in the dictionary).
GOOGLE®, BLACKBERRY®, and XEROX® are all examples of inherently strong names as each exhibits all three of the characteristics above.
In the interest of thoroughness, weak names tend to exhibit at least one of the following characteristics, they are:
- suggestive of the goods or services offered;
- descriptive of the goods or services offered; or
A good example of an inherently weak mark is WORDPERFECT®. Microsoft capitalized on the weakness of this name when it launched its competing software WORD®. THE SHOE STORE, or FAST CAR WASH are other hypothetical examples of weak names. As discussed in Part II of this article, weak names make protection difficult and costly. In practice descriptive names tend to be the most frequent form of weak names encountered in this office for the reasons stated above—it "says it all".
Forgoing the short term marketing boost of a descriptive name requires a long term view. Choosing an inherently strong name provides numerous advantages including the ability to defend against infringers.
Owners of an inherently strong name enjoy the ability to:
- distinguish their goods and services from other competitive businesses in the marketplace,
- easily prevent others from using names that are remotely similar, and
- develop significant value and goodwill in the name—paving the way for a future sale of the name.
In essence, an inherently strong name is sufficiently distinctive that customers will recognize it, and used in conjunction with remotely similar goods or services immediately suggests infringement. As such, over time the mark is more likely to develop value and function as an asset because it identifies a business and becomes synonymous with that business’s quality of work.
By way of example, the inherently strong XEROX® trademark is valued by Forbes at $13.2 Billion. The owner of this mark, the Xerox Corporation, has every right to demand anyone who attempts to add or alter the name to cease their activities. It could easily shut down an imitator operating as "QUICK XEROX"; whereas, the operator of the weakly named "FAST CAR WASH" would likely not be able to shut down an imitator operating as "QUICK CAR WASH".
Ultimately, one must weigh the short term benefits of a descriptive weak name against the long term benefits of an inherently strong name.
The excerpt above was originally published as part of a larger article in the Hamilton Law Journal under the title: Selecting and Protecting Inherantly Stong Names by Mark Koch and Jim Lepore. Mark A. Koch Professional Corporation is a law firm practicing in the area of Patent, Trademark and other Intellectual Property matters and can be reached at (905) 549-5880.