Create your own meaning to create an IP asset

September 10, 2008

It is easier to fill a bucket that is not leaking. That truism applies to client and customer retention, but also to branding decisions. Choose wisely when naming a new business or product. Not every brand can hold the value of the investment that a business puts into it. Some are too non-distinct. Names that simply state what the product is are generic and cannot become strong trademarks. Likewise, names that are common in a particular industry are not capable of making one company distinct from all the others.

Communicating the source of something is what trademarks do, and is why they are protected under the law. It is tempting when naming a new product or service to go for a brand that will immediately communicate what is for sale. However, the less it communicates when it is first chosen, the more it can be worth in the long run. The mark’s owner will have to do the work to create meaning in the marketplace. It is that investment in meaning that the trademark law protects, and a strong brand is one that is both well-known and distinctive.

Weak and obvious brands have limited trademark value, even after a great deal of time and investment. For example, a pet store in Virginia Beach called “Virginia Beach Pet Store,” no matter how much time and advertising investment goes into it, will not develop strong rights to the name. The generic nature of the name limits its owners right to, for example, prevent another store in Virginia Beach from using the same name.

On the other hand, if the pet store is called “Barney’s Bucket,” the exclusive rights to that name can become quite strong over time. In the case of Virginia Beach Pet Store, the problem is that the name is the thing itself. Barney’s Bucket, on the other hand, would only have whatever meaning its owner has created. If Barney’s Bucket comes to mean “pets and pet supplies,” then the mark’s owner has created such secondary meaning. The name itself starts out meaningless relative to pets and pet supplies, carrying only the meaning in that market that the owner has created.

Trademarks can be classified into several categories, depending on the distinctiveness of the marks themselves. Words that are entirely invented or have no dictionary meaning, like “Google,” or “Exxon,” are fanciful marks and are regarded as distinctive from day one. A mark like “Barney’s Bucket” would be an arbitrary mark (like “Apple”), where dictionary words are used in a context unrelated to their meaning. These marks are also quite distinctive.

Less distinctive marks are those that suggest the nature of the product or service (such as “TruGreen” for lawn care), and those that describe the product or service (like “Chap-Stick” for lip balm). Generic marks that are simply identify the product or service cannot become distinctive, cannot be registered with the patent and trademark office. So when choosing a new name for a company or a product, names that do not immediately identify the product are the ones that will be worth keeping.

A brand name’s distinctiveness is also determined by how common or how uncommon it is within its particular market. Business owners who do their branding on the descriptive or generic end of the spectrum, or who use common words in their industry, can be unpleasantly surprised by the lack of rights that arise out of years of use and publicity of the name.

In one example, a health care insurance company used the mark “CareFirst” for their business for 15 years, and had even developed a track record of persuading other users of similar names to back down and change their names. However, when the time came to put their rights to the test, a judge found that the two elements of the brand name, “Care” and “First” were so common in the health care industry that the name was a poor indicator of source or affiliation of any particular company’s services. As a result, the company was unable to prevent a medical practice from using a name they contended was confusing to customers — “FirstCare.”

You can imagine the meetings at which a new health care company decided to adopt the name “CareFirst.” It was probably an obvious match. Years later that obviousness turned out to be the problem. It was too obvious.

Going for a distinctive brand when launching a new product or service is a matter of committing to a short-term lack of communication in exchange for distinctiveness over the long term. A business will provide less information for potential customers by choosing something that does not describe what they are selling. The more the name itself (as opposed to its use over time) communicates the nature of the goods or services provided, the less distinctive it can become.

Chris Gatewood is a lawyer in Richmond, with the firm of Hirschler Fleischer, PC. His practice focuses in the areas of intellectual property and entertainment law, and he can be reached at cgatewood@hf-law.com.

Written by Chris Gatewood  |  Filed Under Intellectual Property 

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