What’s in a name? How to Protect Your Company’s Trademarks Before Setting Up Shop (Intent to Use)

As a startup, you should consider the critical issue of whether to protect the trademarks that will be used in your business. A trademark is any distinctive word, name, symbol or other indicator that distinguishes your products or services. Given the variety of similar types of products and services available to the consumer to satisfy a particular need, customers often make their selections based on the brands they recognize and have learned to trust. Thus, trademarks are among the most valuable assets of many businesses, as the ability to stand out in a crowded marketplace can provide a significant leg up over competitors.

To properly acquire and protect trademark rights as you build your business requires some thoughtful planning and, specifically, registration in the countries in which the services will be offered or the products will be sold. Once registered, protection of these valuable trademark assets is assured (though enforcement is another matter). While many countries operate under a “first to file” system for obtaining trademark rights (meaning the first to obtain a registered trademark is deemed the exclusive owner of the mark regardless of who used it first) and do not require immediate use of the mark in that country in order to obtain a registered trademark, this is not the case in the U.S. Under U.S. trademark law, federal rights arise through the use of the mark on products or product packaging or in advertising for services, and the first person or company to use a mark in connection with a particular product or service has “priority” in that mark over subsequent adopters, regardless of who was first to obtain a registration with the U.S. Patent and Trademark Office (USPTO) (with some exceptions).

However, current U.S. law provides for the filing of a trademark application to protect (or reserve) trademarks that are not yet in use, but which the filer plans to associate with a specific product or service in the near future. This “Intent to Use” filing system enables companies to establish priority in a trademark over later adopters before expending large sums of money for advertising, printing, labeling, product development, etc. Instead, an Intent to Use applicant need only show a “bona fide intent to use” the mark with the products or services listed in the application at some point in the future. This bona fide intent to use can be shown through a written business plan, board of director’s minutes showing actions moving toward use of the mark, expenses incurred in preparation of product or packaging bearing the name and indicia of time or money spent in development of the business.

On average, an Intent to Use application is approved within 12 to 18 months after filing with the USPTO. The applicant then has six month to either (1) file evidence that it has begun using the mark with the identified products or services or (2) request a six month extension. Up to five extensions may be obtained, for a total of three years. In practice, this provides at least a four year window to obtain financing, develop a new product, roll out a new service, etc., before the reservation of rights in a particular mark expires with the USPTO. Once the mark is in use and the registration issues, the applicant is deemed to have been using the mark since the filing date of the application, thereby establishing priority in the mark over anyone who may have adopted a similar or identical mark between the filing date of the application and the issuance of the registration.

Early in the business start-up phase, attention and care should be given not only to the choice of the name that will identify the new business or product, but also to the protection of that name. As a business grows and expands its range of offerings and reach in the marketplace, the value of its trademark rights becomes a valuable asset for the company. Regardless of the ultimate goal of your business model, protection of your intellectual property should be a priority early in the game to ensure a return on your investment down the road.

Credit to my former partner Patchen Haggerty for this post.