One thing many new businesses should consider, far earlier than many do, is their intellectual property, how they use it, and how it is protected. First, what is intellectual property? Intellectual property or properties (“IP”) are original ideas, creations, or processes which belong to a person or a company. IP is the broad category encompassing everything from the Nike swoosh to the formula for Humira (a medication) to the entire written works of the Harry Potter series and all its spin-offs. Both state and federal governments provide various protections for the different kinds of IP, like trademarks, copyrights, and patents, and the courts provide protection in the form of common law rights.
Generally, trademarks protect logos or phrases used by businesses in commerce, copyrights protect works of art or literature, and patents protect scientific processes and products. For businesses, copyrighted or patented materials are generally going to be part of the products or services being sold. They can provide a foundation for the good will of the business in the form of an innovative product which the business sells exclusively. However, the type of properties businesses should take action sooner to protect are trademarks. Trademarks are what a person or business can put on a patented or copyrighted product to let people know exactly where that product came from. They are often afterthoughts, but they can provide significant benefits down the road which should at least be considered early on.
More than anything else, trademarks protect the work a business does to build a customer base. If a business has a physical location, there is usually a sign or logo at the front. If a business is online, that logo or business name is usually displayed prominently on the business’s website. If a business does any marketing, its mark is usually involved. If a business gets popular, naturally, people will start to recognize that business’s mark, so the goal of a mark is generally to associate the business’s good qualities with the logo, name, or phrase. Trademark protections come in when someone else decides to use a business’s mark to make money from the business’s customer base by tricking customers into thinking the imposter is the real deal. So, what are trademark protections and how do businesses get them?
From the time a mark is put into use, businesses have a baseline set of trademark rights. The mark is immediately protected as to the specific way it is used by the business, as long as no other nearby businesses are using the same mark. The protections are based in common law, which come from courts, and allow a business to stop other people or businesses from using its trademark within the nearby geographical area and for similar goods or services. With only common law protections, a business should be able to put a stop to any nearby competitors or copy-cats who use its trademark on similar goods or services. However, who a business can challenge for use of its common law mark will depend on a whole host of factors and could lead to extensive litigation. When common law is the only basis for litigation, things usually get messy. In Wisconsin, a business challenging another entity’s use of a common law trademark in court will first need to prove that its trademark deserves protection, prove when and how the trademark has been used by the business, prove why the entity being challenged should not be allowed to use the mark, and finally prove its damages. If a business has even state protection for its mark, protecting the mark becomes much simpler.
In Wisconsin, trademarks can be registered with the Wisconsin Department of Financial Institutions (“WDFI”) for a small fee and by filling out a short form. Naturally, whoever files the trademark application, either the business or an attorney, will need to perform a search to make sure the mark is not used elsewhere by another entity, both in the WDFI’s system and through general internet searches. Asking an attorney for help with the filing is recommended, but it should be a relatively simple process. Once registered, the owner’s right to use the trademark is protected throughout the state of Wisconsin. Protecting the mark comes down to when the mark was registered and the goods or services for which it is registered. If a competitor starts using a business’s mark in Wisconsin, after the business and for similar goods or services, and the business has registered its mark in Wisconsin, the business should be able to succeed in stopping the competitor in most circumstances. One of the few difficulties will be proving the damages suffered by the business, but that is practically universal in IP matters.
If a business registers its mark federally, its mark’s protections expand to every part of the United States. Federal registration is the best protection an entity can get for its trademark. Getting a federal mark takes longer, and there should almost certainly be an attorney involved, but the protections are much better. The federal laws regarding trademarks are more extensive than most states. The court cases interpreting those laws are generally clearer and cover more ground than state case law. If you are an online retailer, you should consider applying for a federal trademark very early in your business’s lifetime because your reach extends throughout the US much faster than a physical store. Any business which is considering even marketing outside of its home state would be better protected with a federal trademark. If a business needs to litigate against a copycat out of state, the litigation gets complicated quickly unless the business has a federal mark.
If you have questions about intellectual properties and trademarks, or any other legal matter, please feel free to reach out to the legal professionals at West & Dunn online or by telephone at (608) 490-9449.