Potential Trademark Issues Associated when Creating a Name for Your Business
In the development of a business plan, critical features include choosing a name for a business entity, developing a marketing plan, promoting the name and business and eventually establishing a domain name and web presence. While it is tempting to name the business in the early stages to establish an identity for the new venture, this is a risk-filled endeavor as few businesses have properly secured trademark rights and registrations for the new name.
Frequently, the first attempt of naming the new business venture is the establishment of a domain name; for example www.mynewbusinessname.com. Many new businesses rush, enthusiastically, to secure this domain name at the very early planning stages and before the venture has launched to ensure that the domain name will be available for future use. While this may seem a prudent step, the very first task in naming this new venture should be to secure the Federal trademark clearance and registration of the business name and trademark. Far too often, new ventures invest significant resources in securing a domain name prior to clearing and securing the Federal trademark registration. Many issues often arise if these critical steps are not taken to clear and register the Federal trademark.
Establishing First Use of the Trademark in Commerce
The new entity may be staking its claim and starting to accrue common law rights in its name by use of the name in commerce even if a United States trademark application is not filed. Common law rights have limitations and cannot replace the benefits gained by filing a United States trademark application. Further, a new entity may be staking its claim and starting to garner rights to the name over competitors with its first date of actual use of the trademark in conjunction with the goods or services in interstate commerce but again, this actual use cannot replace the benefits gained by filing a United States trademark application.
Our Business Has a Domain Name and Website: Are We the First Users of the Trademark?
While actual use of a trademark can take many forms as defined by the Trademark Manual of Examining Procedure (“TMEP”), new entities often mistakenly believe that securing a domain name qualifies as actual use of the trademark in interstate commerce. Unfortunately, merely securing a domain name may not allow the new entity to start accruing rights in the name. Further, securing of the domain name is no guarantee that its use by the new entity does not constitute infringement of a competitor’s Federally registered trademark.
The new entity’s date of first use in interstate commerce to begin establishing rights in the name requires proper use as defined by the TMEP. An often ineffective attempt to stake a claim to a name occurs when a new entity purchases a domain name at the outset of its business venture and leaves the website with a “Coming Soon” page while it lays the foundation for the business. Unfortunately, this generic “Coming Soon” page seldom constitutes actual use as defined by the TMEP and the entity may not be staking the claim or establishing a date of first use for the new name.
The TMEP establishes a three prong test to determine if a web page that displays goods can be relied upon to establish actual use of a proposed trademark in interstate commerce. First, the web page must contain a picture or textual description of the goods. Secondly, the web page must show the trademark used in association with the goods. Thirdly and significantly, the web page must provide a means for ordering the goods.
The Trademark Manual of Examining Procedure has examples and established criteria to determine if a particular web page meets each of these three prongs. If each of these three prongs are not established, the web page does not constitute actual use in interstate commerce and the owner has not started accruing rights in the name merely through securing the domain name. While the above referenced test is applied to goods, the standards for what constitutes actual use for service marks are equally stringent.