Federal trademark protection is valuable stuff, and it's fairly easy to obtain... as long as you don't do one thing.
The problem is: entrepreneurs just LOVE to do that one thing.
If you own a federally registered trademark -- a logo or brand name, for instance -- and someone uses it or even something confusingly similar to either represent a competing brand or dilute the value of your mark, the law gives you a powerful arsenal to make them stop. That arsenal includes the right to sue in federal court, to get treble (fancy for 3x) damages, recouping infringers' profits, statutory (automatic) damages, access to foreign trademark filing, and more.
Registering your trademark with the Feds also gives you a nationwide claim on the mark, and puts potential competitors, infringers, and even potential partners on notice that you've staked that claim.
And registering a trademark usually isn't complicated or particularly expensive. At present (June 2022), we're completing most "standard character" (word) searches and registrations for under $2,000 all-in. It does take some time, though: the U.S. Patent and Trademark Office can take several months to approve a run-of-the-mill trademark registration application, and that period can get far longer if there are any significant legal issues involved. Not a huge deal: your registration rights apply retroactive to your initial filing date.
But... not every company name or brand can be protected. And here's where some of my clients and friends screw things up.
For a word, phrase, symbol, design, or combination of those ("marks") to qualify for federal trademark registration, it generally has to be unique. Remember: the whole purpose of allowing individuals or companies to control marks -- which isn't exactly free speech, is it? -- is to help identify the sources of goods and services. When you see a swoosh here in the U.S., our trademark protection system means that you can fairly assume that product was made by Nike.
The US Patent and Trademark Office generally registers marks that are "inherently distinctive". That includes marks that are "fanciful" (made up words, like Exxon), "arbitrary" (Apple for computers), or "suggestive" (Coppeortone for sunscreen). However, marks that are just "descriptive" (like "creamy" for yogurt) or totally generic (like... "yogurt" for yogurt) aren't usually eligible for registration. (There's one caveat here: descriptive marks can become eligible for registration with "acquired distinctiveness," meaning you've used the mark extensively for a long time -- usually more than five years -- and it has become clearly associated with your product or services.)
And there's the problem: business owners love generic marks. Y'all seem to think that by calling your company, say, "Accounting Services for Massage Therapists" that no one else will ever be able to advertise or perform accounting services for massage therapists.
Not so. It's generic, and not protectable under trademark law.
As you build your company, pour money into advertising and delivering great accounting service, and as your massage therapist clients start to love your services, your generic brand -- your mark -- remains virtually valueless. You won't be able to use trademark protections to prevent a competitor from advertising "bookkeeping for massage therapists," or anything confusingly similar to your brand. If someone calls your clients and interferes with your business by pretending to be your company, that's fraud, and there are protections for that. But all of your competitors will be able to at least describe their services as "accounting services for massage therapists," and there's not much you can do about that unless they cross that fraud line.
Now, if you had called your company "Trigger Point Accounting," you'd be able to register that at the federal level. A name like that is distinctive when applied to accounting services. Your massage therapist clients would know it's you when you use that phrase. And your advertising budget would be better spent: you'd build your brand, and federal law would allow you to protect it.
But with a generic name... your brand is ripe for confusion and abuse. This happens all the time. Right now I'm aware of one mom-and-pop business that's suffering through this: their company is called the equivalent of "Florida Construction Equipment," and they have operated under that name for several decades, building strong relationships with their customers and vendors. A new company named the equivalent of "South Florida Construction Equipment" has entered the market, and is absolutely confusing the older company's customers and eroding the older company's sales. The owners of the older business are losing money. They're scrambling.
And this isn't a new thing. Judges have been scratching their head at this tendency of entrepreneurs for almost a hundred years. In 1923, Judge Learned Hand (yep, that's his real name; Judge Hand is an American judicial legend) wrote,
I have always been at a loss to know why so many marks are adopted which have an aura, or more, of description about them. With the whole field of possible coinage before them, it is strange that merchants insist upon adopting marks that are so nearly descriptive. Probably they wish to interject into the name of their goods some intimation of excellence, and are willing to incur the risk.
Franklin Knitting Mills, Inc. v. Fashionit Sweater Mills, Inc., 297 F. 247 (S.D.N.Y., 1923). And in Aloe Creme Labs., Inc. v. Milsan, Inc., 423 F.2d 845, 848, 165 U.S.P.Q. 37 (9th Cir. 1970), the 9th Circuit noted that:
“Apparently entrepreneurs can not resist the temptation to tie the name of their product to some disabling quality of description, geography, or vanity.”
When it comes to trademarks, weirdness works in your favor. Keep them fanciful, arbitrary, or suggestive, and spend the small amount of time and bucks to register those marks. And then the value of your brand can rise with your business.