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Selecting and Protecting a Business Name
We are often asked about how to select and protect a business name. Following is a short summary of the process. We help with any number of the steps.
2. Check on the Internet to see if the domain name (e.g., www.McDonalds.com) you want is available. Decide whether you want to reserve the name (through your web designer or host or through a registrar such as Network Solutions, Inc. www.networksolutions.com).
3. If yours will be a corporation or an LLC, contact the Secretary of State’s office regarding name availability. (The Illinois Secretary of State’s office is online at www.sos.state.il.us/departments/business_services/corpnames.html.) Decide if you want to pay to reserve it while you’re clearing the trademark.
4. Conduct a trademark search. There are two levels:
a. Quick computer searches check just for federal (or possibly state) applications and registrations that are extremely close to the proposed mark. They are not as extensive as (and therefore not generally a substitute for) full searches.
b. Full trademark searches are provided by a trademark search company and are usually analyzed by your trademark attorney. They are much broader than quick searches in terms of the range of marks that will come up and in that they also include searches of common law databases such as phone books, industry directories, and press releases.
5. Once you’ve cleared the name, decide whether you wish to register it as a trademark at the state and/or federal level. If you will register it federally, decide whether to register it before you start using it, as an “Intent to Use” trademark.
Let’s assume that one of your clients is having a logo and an advertising campaign created for it by a marketing firm. Or, take the example of a law firm that uses a web design firm to create a website for the law firm. Who owns the copyright in the creative work being done?
Answer: Chances are, it’s the independent contractor, not the client or law firm.
Why is this? Under the United States copyright laws, the copyright in a work created by a non-employee is owned by the non-employee, rather than the customer.
Why is this important? Well, first, if you don’t own the copyright, you can’t register it. Second, if you don’t have a registered copyright, you can’t sue an infringer.
How can you get around this? Written assignments of copyright and (in some cases) work-for-hire agreements.
[This is an article Jeff wrote several years ago. A revised version was published in the Illinois State Bar Journal.]
In the past few years, Congress has dramatically changed the federal trademark and copyright laws. During the same period, our state legislature passed the Illinois Trade Secrets Act. For the most part, the new laws make it easier for you to protect your intellectual property interests. But what types of interests merit protection, and what kind of protection should you seek?
DEFINING YOUR INTERESTS
Many people are uncertain of the differences among the various intellectual property rights. Here are some general guidelines.
Trademark laws protect goodwill in the name of a product, service, or line of products; in a design logo used to distinguish a product; or in a slogan used with a product or service. These laws can also protect trade dress, which is the overall image presented to purchasers, including such elements as the label, packaging, ornamental features, or advertising of a product.
Copyright laws protect original written expressions and works of visual art. Books and movies are the most common subjects of protection, but such things as catalogs, computer software, and sculptures may be protected as well.
Patent laws protect inventions, new processes, and ornamental designs.
Finally, trade secret laws protect processes, inventions, and other information of value to a business, provided reasonable measures have been taken to ensure secrecy.
Because these rights often overlap, it is possible to have multiple protectable interests associated with a single product. Imagine, for example, that you have created a bicycle with a new linkage mechanism that you have patented. The logo on the bike, which is protected by a trademark, contains a picture of you that is the subject of a registered copyright. Finally, to paint and polish the bike you use a special method that creates a highly lustrous finish and is a closely guarded company secret.
. PROTECTING YOUR INTERESTS
The procedures for obtaining protection vary according to the interest involved.
Trademarks. Rights in a trademark stem from “first and continuous use”. To use a trademark, you must affix it to the goods being sold. When it is impractical to physically attach the mark to the goods, you may affix it to the material in which they are packaged for sale. For services, it is sufficient to use the mark in connection with the services -- for example, on business cards, stationery, or advertisements.
Mere use of a trademark gives the user certain common law rights, including the right to employ the designation “TM” (for a trademark) or “SM” (for a service mark).
Common law rights, however, provide incomplete protection. It is generally advisable to take additional steps to protect your mark by applying to register it with federal and/or state authorities. Registration in Illinois (as in many other states) is a simple process. A state registration, however, provides little protection outside of the issuing state. Federal registration is a more involved process -- taking approximately one year -- but affords much greater protection against conflicting users. Only federal mark holders may use the ® symbol.
As noted above, trademark rights are generally based on use. Now, however, federal law allows an applicant to file for registration of a mark before actually using the goods or services for which application is made. This new process, called “intent-to-use” registration, is particularly useful if you have a new product in the pipeline and want to bar competitors from using the name on similar items before your product can be brought to market. Before the registration will issue you will actually have to use the mark in commerce, but you can save a great deal of delay with this new procedure, and you will get credit for constructive use back to the date you applied for registration.
Copyrights. Copyright protection is also available at common law, without registration. And, as a result of recent amendments to the Copyright Act, it is no longer necessary to give would-be infringers notice of your copyright. But -- and this is a big but -- to avoid potential problems, you are well-advised to use copyright notice and to promptly submit your materials for registration.
Giving notice of your copyright is as simple as labeling the object, in a fairly conspicuous place, with the word “copyright” (or “copr.” or the symbol ©), the year of first publication, and the name of the copyright owner. Such notice will discourage potential copiers from claiming they didn't know the work was protected.
Securing registration for an original expression is also easy. Simply fill out a short form and send it to the Copyright Office along with $20 and copies of the writing or photographs of the work of art for which protection is sought. You will need copyright registration in order to sue someone who is copying your work. Moreover, you should register before the copying ever starts, because if you wait to register until after the infringement begins, you will lose the right to recover attorneys' fees in your suit and you will have to provide enhanced evidence of damages.
Patents. Without a federal patent, patent rights do not exist. Moreover, to obtain a patent, an inventor must apply within one year of starting commercial use of an invention.
While your application is pending before the Patent and Trademark Office, you may use the notice "patent pending". This notice, however, is without legal effect. Once the patent has been issued, you should use the notation "Patent" or "Pat.," along with the patent number.
You may also have trade secret rights associated with inventions that are patented, as well as those that were not patented or whose patent has expired.
Trade Secrets. In some ways trade secret protection is broader than patent protection, in other ways narrower. For example, customer lists are not patentable, but may be protectable as trade secrets. However, a patent protects you from reverse engineering, while trade secret laws do not.
Unlike the other forms of intellectual property, there is -no formal registration process for trade secrets. The fundamental prerequisite for trade secret protection is secrecy. The more restricted the information is, and the less readily ascertainable, the better.
Intellectual property laws and practices very widely in other countries. Given the importance of safeguarding your ideas and goodwill, it is advisable to confer with an attorney early in the process.
© 2001-8 Wilson & Associates. All rights reserved. This is not an offer to supply legal services. Laws may vary by jurisdiction. Suggestions found in this website or the Wilson & Associates newsletter may or may not be appropriate for everyone. Please obtain specific professional advice before implementing any of the suggestions in this website.