Trademarks can be confusing. The other day I asked myself . . .

“How would I describe trademarks to a five-year-old?”

Man, that would be tough. Challenge accepted.

First off, what is a trademark?

Well, there’s a pretty well-defined legal definition. But that gets complicated, so I’ll spare you.

Here’s the gist. A trademark is a brand for what a business sells (goods or services). This brand is unique—so when you come across it, you think of the source of that brand. A trademark can be a name (McDonald’s), a logo (golden arches), or a slogan (“I’m Lovin’ It”) . . . among other things.

Sometimes there can be overlapping trademarks from the same source. For example, the term “Coca-Cola” in itself is a trademark. But so is the Coca-Cola logo that has the term written in a particular script and format.

Why are trademarks important?

A brand distinguishes a particular product/service from a competing product/service. And that’s the point of a trademark. It’s a tool that businesses use to prevent confusion in the marketplace.

So, what can be a trademark?

Lots of stuff. Most trademarks consist of words and logos. But a trademark can also be a sound, color, or smell. This isn’t too common, but it shows you how diverse trademarks can be. If you come across some thing, and you associate that thing with a particular business’s goods or services, it can be a trademark. All it has to do is identify a certain business source and distinguish it from the competition.

How does something become a trademark?

You create a trademark when you use branding in commerce. Your rights to that trademark continue as long as you continue to use that branding in commerce. In order for it to be a trademark, it must distinguish what you’re selling from the competition.

How can I protect my trademark rights?

You have two ways to protect, or enforce, your trademark rights. (By trademark rights, I mean your rights to use that trademark and prevent others from using it.)

The first way is something called “common law.” Common law is a fancy way of saying that these laws developed through court decisions over time. Under common law, you get trademark protections by using that trademark in commerce. But these common law protections are limited. They only prevent others from using your trademark in your geographic area. And because it’s automatic and there’s no paperwork, it can be hard to prove that you have these rights.

The second way to protect your trademark rights is by registering them at the federal level. Registering your trademark adds a strong layer of protection around your trademark rights. Let’s say you apply for a federal registration, and it gets accepted. That creates a “presumption” that you own the trademark. A registered trademark also puts others on notice that YOU claim ownership. It makes people less likely to use that trademark.

Let’s talk technicalities. You must use your trademark in commerce within more than one state in order for the registration office to accept it. Due to the internet, most businesses use their branding in many states. So, this is a pretty low hurdle to cross.

So, a trademark becomes a trademark when you register it at the federal level?

No! A trademark becomes a trademark when you use that branding in commerce. But just because you have a trademark doesn’t mean you have the ability to protect it.

Think of it this way. When you use your brand in commerce, it becomes a trademark. It’s like you automatically get a stick (through common law) to fight others who want to use it. A stick isn’t a very great weapon. If you want to upgrade to a sword, you need to register the trademark. A federal registration allows you to sue businesses in court.

Okay. How could someone violate my trademark rights?

If you own a trademark, that means you have exclusive rights to that branding for that specific product or service. Again, the point of trademarks is to prevent confusion in the marketplace. Let’s say another business starts using certain branding that is like yours. If it  would be confusing to customers, then they’re violating your trademark rights.

This is important. This “new kid on the block’s” branding doesn’t have to be the exact same branding as yours in order to violate your trademark. But it does have to be confusingly similar. Would it cause your customers to be unsure of the source of the product or service? Does it create confusion in the marketplace? Then your trademark rights are being violated.

What’s the deal with those trademark symbols: ®, ™, and ℠?

The ® symbol indicates that the trademark is a registered trademark. The ™ symbol means it’s a trademark that is not registered. The ℠ symbol means it’s a service mark that is not a registered service mark. In other words, you can start using the little TM and SM after your branding if the mark isn’t registered yet. These symbols show the world that you’re claiming trademark rights to that branding. It gives you street cred.

Wait, what’s a service mark?

Technically, a trademark protects branding associated with goods. A service mark protects branding associated with services. Usually, people just say trademarks to cover both goods and services. Still, if your branding is for a service and you want to use a symbol, you should use the ℠.

Does my business need to protect its branding through registered trademarks?

Maybe.

Applying for, maintaining, and enforcing a registered trademark is expensive. And it is very difficult to do this by yourself without an attorney. Trademark registration applications are 50% more likely to be successful if you have an attorney help you. And the only person who can force someone to stop using your trademark is a judge. Even after you have a registered trademark, it will still cost you to enforce your rights.

It’s kind of like buying a very needy and high-maintenance puppy. Make sure you’re willing to take on the responsibility.

For many small businesses that are starting out, registering a trademark is not worth it. Honestly. Why? Well, because they are a lot of work. And you should have already confirmed that your business will be sustainable in the long run. When you’re starting out, you have a lot of priorities. Protecting your branding so that no one else can use it is important. But if your business isn’t making a profit, that won’t matter much.