Healthcare Trademarks — Protecting Valuable Assets
June 4, 2002
By: E. Scott Johnson
Healthcare Review - Northeast Network
Product names, logos, and slogans can become valuable assets, attracting purchasers who have come to rely upon the quality of branded goods and services. The healthcare industry has established valuable goodwill in such well known names as Blue Cross, Carefirst, and Humana. Humana Inc. has federally registered more than 50 trademarks for healthcare-related products and services including Humanfirst, RxAlliance, and Humana Gold Plus.
Trademarks generally have little or no value initially, but can dramatically appreciate in value through successful use. Unlike copyrights and patents that eventually expire, trademark rights can last forever. Because trademarks are appreciating assets with a potentially perpetual life, it is important to choose them carefully and protect them through federal registration and controlled licensing.
What Is a Trademark?
A trademark is any word, symbol, design, or combination that distinguishes one seller’s goods from those of another. The words Coke and Excedrin are both trademarks, as is the hour glass-shaped Coca-Cola bottle. A slogan like Nike’s “Just Do It” can also be a trademark. When used to identify a service, the mark is called a service mark. McDonald’s is a service mark for restaurant services, as is the golden arches design. Because trademark law is based on the idea that trademarks serve as badges of quality, legal protection exists both to protect the public from deception and confusion, and to protect the mark owner’s goodwill in the marketplace.
Some business owners believe that because their state accepted their corporate charter or trade name filing, the name can be used for any product or service the business promotes. In reality, acceptance by a state agency has no bearing on whether that same name infringes on another’s federal trademark or service mark. Generally, state acceptance means only that no other entity within that state has incorporated or registered to do business under the same name.
Before distributing a product, advertising a service under a mark, or seeking to register a mark with the US Patent Trademark Office (PTO), a trademark search should be undertaken. This will determine whether prior rights to the mark exist. Comparable in some respects to a real estate title search, the trademark search reveals prior users that could prevent the mark’s registration or assert a claim of trademark infringement.
Trademark search reports provide raw data that must be interpreted and evaluated. For example, a potentially conflicting mark may not be identical (marks need not be identical to infringe) or may be used for different goods or services, or a pattern of inter partes oppositions (a type of litigation) may show up in the PTO file history — all of which need to be evaluated to determine whether a proposed use poses real risks.
Trademark rights can be established simply by being the first to use a mark in commerce, or, one may reserve rights in a mark prior to its use by filing a Federal intent-to-use trademark application. Regardless of whether the mark is registered, the law generally affords the senior user legal protection against infringement within its trading area. Trademark rights are infringed when a junior user applies a confusingly similar mark to the same or related goods or services.
Once it is determined that a trademark is available, the sooner actual use commences or an intent-to-use application is filed, the better. The use required to secure federal registration is a “bona fide use-of the mark, in interstate commerce, in the ordinary course of trade.”
It is a good idea to use the symbol TM in superscript immediately adjacent to all unregistered marks. This symbol provides notice of proprietary rights and is commonly used while waiting for the federal registration process. Once the federal registration is obtained, the trademark should be displayed with the ® symbol.
Benefits of Federal Registration
Even though certain “common law” rights accrue based on priority of use, federal registration provides important enhancements of those rights, including access to federal courts; the ability to recover profits, damages, and costs in an infringement action (including the possibility of treble damages and attorneys’ fees); nationwide constructive notice of ownership of the trademark, eliminating a good faith defense for anyone adopting the mark subsequent to the registrant’s date of registration; prima facie evidence of the validity of the registration and the facts asserted in the registration; and the possibility of incontestability status after five years.
Trademark applications are examined by PTO Examining Attorneys, who search the PTO’s records to determine whether any other registered or pending mark is too similar to the applicant’s mark. The examination process normally takes about one year. Marks that are not merely descriptive and otherwise pass muster under the Trademark Act are registered on the PTO’s Principal register. Descriptive marks can be registered on the Supplemental Register. While affording certain rights under the federal Trademark Act, including the right to use the ® symbol and to bring an infringement action in federal court, registration on the Supplemental Register does not provide the full scope of rights accorded to marks registered on the Principal Register.
Domain names may be federally registered as trademarks or service marks if they meet the statutory criteria and function to distinguish the products or services of one entity from another. Trademark rights are not established by the mere registration of a domain name-such rights are established through actual use or reserved through an intent-to-use filing in the PTO. Trademarks today include domain names, and domain names can become valuable healthcare trademark assets.
This article also appeared in:
CARING Magazine - April 2002
The CPA Journal - February 2003
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