Ask a consultant: How important is a trademark to my business? – Minneapolis Star Tribune

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Q: Why are trademarks important to my business?

A: Too few businesses federally register their trademarks. There’s a disparity between the number of new business applications and new trademark applications filed each year; perhaps business owners do not know what a trademark is, how important it is to their business or how best to protect their trademarks.

The subject matter that qualifies as a trademark is very broad. A trademark is how customers recognize you in the marketplace and distinguish you from your competitors. Most people think of words, phrases, symbols, designs or a combination of these things as trademarks. However, colors, smells, sounds, shapes, product configurations and trade dress can also function as trademarks.

You create trademark rights as soon as you start using your trademark with your goods or services. However, those rights are limited and only apply to the geographic area in which you are providing your goods or services. To obtain nationwide rights, you need to register your trademark with the U.S. Patent and Trademark Office. A federal trademark registration expands your rights to the entire U.S. even though you may not sell or offer your goods or services in every corner of the country.

A federal trademark registration functions as a sword and a shield. As a sword, you can prevent another party from using a similar trademark on related goods or services that is likely to cause consumer confusion. Consumer confusion harms your business by diverting sales from you at the point of sale, or causing you to lose a sale because a competitor tarnishes your business’ reputation. Your trademark is where all the goodwill of your business is stored. It reflects the positive interactions consumers have with your business and your goods and services.

As a shield, the trademark registration prevents others from telling you to stop using your trademark and clears the path for you to expand your business throughout the country. A person or business that adopts a similar trademark for related goods or services in a remote geographic area without knowledge of your trademark is a good faith junior user. A good faith junior user can prevent you from selling or offering to sell your goods or services in its geographic area.

Make trademarks a priority in your business.

Bradley Walz is on faculty at the University of St. Thomas School of Law and a partner at Barnes & Thornburg LLP.