Trademark Clearance Practice in the United States

29 March 2010 Publication
Authors: Diane G. Elder

Article

By Diane Grace Elder, Foley & Lardner LLP

This article is part of our Spring 2010 edition of Legal News: China Quarterly Newsletter, Eye on China.

Prior to the adoption and use of a trademark in any jurisdiction, it is vital that appropriate trademark clearance be conducted to determine whether a mark is available for use and registration. The primary purposes of legal clearance are to ensure that the proposed use of the mark does not violate the trademark rights of others or violate any consumer protection laws. In addition, trademark clearance is conducted to determine whether the proposed mark can be protected and developed into a strong and valuable trade identity right.

In the United States, trademark clearance initially begins with an evaluation of the proposed mark. The trademark attorney first reviews the mark to determine whether it can function as a mark (e.g., is not generic) and whether it is likely to violate consumer protection laws (e.g., is not deceptive). In addition, the trademark attorney evaluates the mark for any negative cultural connotations associated with the proposed term. For example, should a client want to adopt the term “MILK” for use in connection with milk, the trademark attorney would advise the client that the term is generic for the proposed goods and therefore cannot function as a trademark. In the event that a client were to propose adopting the mark “CURES CANCER” for vitamins, the trademark attorney would advise the client that the proposed mark is likely to violate consumer protection laws and be deemed deceptive. In both examples, no further legal clearance would be required, and the client should be advised to select a new mark. It is important that the client assist the trademark attorney at this initial evaluation stage by providing sufficient information about the proposed goods and services to enable the attorney to evaluate the mark properly. In some instances, the evaluation as to the character of a mark and its ability to function as a mark cannot be completed until a full search has been reviewed. This is because information regarding current use of the term by third-party businesses may be needed to enable the trademark attorney to complete the analysis.

In the event that the proposed mark passes the initial evaluation stage, the next step taken by the U.S. trademark practitioner is to conduct and review a preliminary search of the state and federal trademark registers. The purpose of the preliminary search, also referred to as a “knock-out” search, is to identify clear bars to the use and registration of the proposed mark (e.g., identical marks for the same or highly related goods or services). Knock-out searches do not provide complete clearance evaluation and do not include a review of all recommended databases that are a part of a full search. By identifying negative references that knock the proposed mark out of contention early on, the costs and fees incurred in connection with a full search can be avoided and the client is able to select a new mark free from the identified impediment. 

If the preliminary search does not identify any references that would likely bar the use or registration of the proposed mark, the last step in the trademark clearance process is the review of a full trademark search. A full search is ordered from a professional search company and typically range from 300 to 600 pages in length. A full search is much broader in scope than the preliminary search. It includes a more fulsome review of the state and federal trademark registers as well as the review of hundreds of databases that are related to the goods and services of interest (e.g., industry publications and databases, Internet domain name registries, general newspaper publications, and telephone directories). The identification of non-registered trademark usage is essential for trademark clearance in the United States, where, as a general rule, trademark rights arise through use of the mark in commerce. It is important to note that full trademark searches are not guaranteed to identify every potentially relevant usage. Nonetheless, full searches provide the most complete and affordable collection of relevant references and information readily available to the client. 

The trademark attorney reviews each reference in the full search and identifies those that are relevant to his determination of availability. Potential risks are identified by considering the following factors: similarity or dissimilarity of the marks; relatedness of the parties’ goods or services; similarity or dissimilarity of the channels of trade of the parties’ goods or services; the number and nature of similar marks in use for similar goods; relevant strength of the parties’ marks; sophistication of purchasers; and care with which the purchasing decision is made. Investigations are conducted of pertinent references to determine whether they are in use and how they are used. There is no exact formula for assessing the risks associated with the adoption of a trademark. The trademark attorney’s opinion is based on the totality of the facts revealed by the full search report and an application of sound judgment thereto. After reviewing the content of the full search together with the investigative results, the trademark attorney formulates an opinion regarding the availability of the mark for use and registration and provides his analysis to the client, typically in the form of an opinion letter. 

If the mark is available for use and registration, it is strongly recommended that an application for registration be filed as soon as the client determines it has a good faith intention to use the mark in the United States. If significant risks have been identified and the client determines that it will select an alternative mark, then the clearance process should be initiated again.

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