Trademarks are a vital part of developing a company’s brand and distinguishing its products. A company must exercise caution and due diligence when choosing a trademark. Choosing the wrong one can lead to unnecessary costs, lost sales, violation of the trademarks of other companies and lawsuits.

In general, a trademark is a distinctive word, symbol, or picture that a seller of goods or services affixes to distinguish its products from those of others. The owner of a trademark has the exclusive right to use it on the product it was intended to identify and often on related products. The term Service Mark refers to a mark that identifies a service rather than a good, although the term trademark is often used to refer to both service marks and trademarks.
A company’s rights to a trademark are based in the use of the mark, not the registration. The first party to use a mark within a geographic area generally has rights superior to a “junior user” that later uses that mark in the same area. The junior user may be prevented from using the mark or confusingly similar marks that identify identical or related goods or services, even if the junior user has registered the mark.

Prior to settling on a trademark, a company should conduct a trademark search to determine whether it is already in use or if an intent-to-use application has been filed. Searching for trademarks, though, is an imperfect science. Trademark rights are created by the use of a mark, and not by registration. Thus, unregistered marks may be valid marks—and they are much more difficult to discover. Conversely, registered marks are easily searchable through the U.S. Patent and Trademark Office (USPTO).

The level of a company’s trademark search is often dictated by time and monetary constraints. On one end of the spectrum, a search of the records of the USPTO is fairly quick and affordable. A search of the USPTO’s records will reveal whether the trademark is clearly unavailable. More comprehensive searches, and consequently more expensive and time consuming, cover state trademark registries, various trade and telephone directories, corporate name databases, and domain name registrations.

With due diligence, a company can significantly reduce its risk of violating the trademark rights of other companies, and avoid exposure to lawsuits and delayed product roll-outs.