A trademark is an identifying sign — a word, name, symbol, logo, slogan or combination — that tells consumers a product or service comes from a particular source and distinguishes it from others. Trademarks are a type of intellectual property (IP) that give the owner exclusive rights to use the mark in connection with the goods or services covered by the registration or by common‑law use.
Key takeaways
– A trademark identifies and distinguishes the source of goods or services and is protected as intellectual property.
– In the U.S., trademarks can be protected by common‑law use (TM) or by federal registration with the U.S. Patent and Trademark Office (USPTO) (®).
– Trademarks must be used continuously and lawfully; failure to use a mark or enforcement neglect can lead to loss of rights (e.g., abandonment or genericide).
– Trademarks can be bought, sold, licensed, or valued using several common valuation approaches.
Trademark protections and owner rights
– Exclusive use: Prevent others from using confusingly similar marks on related goods/services.
– Right to sue for infringement: Seek injunctive relief, damages, and sometimes attorneys’ fees.
– Licensing and assignment: Owners can license third parties or transfer ownership.
– Customs protection: Registered marks can be recorded with customs authorities (e.g., U.S. Customs and Border Protection) to block counterfeits.
– Symbols and notice: Use TM (or SM for service marks) for unregistered marks; use ® only after federal registration.
Fast facts
– U.S. registrations are handled by the USPTO.
– Common‑law rights can arise simply by using the mark in commerce, but registration gives stronger, nationwide presumptions of ownership and rights.
– Strong marks (fanciful, arbitrary) are easier to protect than descriptive or generic ones.
– Famous examples: Kleenex and BAND‑AID are trademarks that have become shorthand for product categories but remain protected by their owners.
Trademark vs. patent vs. copyright (short comparison)
– Trademark: Protects brand identifiers (names, logos, slogans). Protection can last indefinitely if maintained and used.
– Patent: Protects inventions, processes, and certain designs for a limited period (typically 20 years utility patents in the U.S.) after full disclosure to the USPTO.
– Copyright: Protects original works of authorship (books, music, software, artwork) for a fixed term (author’s life plus decades depending on jurisdiction) without formal registration, though registration gives added enforcement benefits.
What are intellectual property rights?
IP rights cover “creations of the mind” (WTO). They vary by type (trademark, patent, copyright, trade secret) and by country. Trademarks are territorial — rights are determined by use and registration in each jurisdiction unless international systems (e.g., Madrid Protocol) are used.
What type of asset is a trademark?
A trademark is an intangible asset. It appears on a company’s balance sheet when acquired or developed in a way that meets accounting rules, and it can have significant value — especially well‑known or well‑managed marks.
How trademarks are valued
Common valuation approaches (International Trademark Association / industry practice):
– Income approach (relief‑from‑royalty or discounted cash flow): Estimate the incremental income attributable to the mark.
– Market approach: Compare to sale/licensing transactions involving comparable marks.
– Cost approach: Estimate cost to recreate or replace the trademark (less commonly used for strong brands).
Valuation requires careful assumptions about future sales, royalty rates, useful life, and discount rates.
How to register a trademark in the U.S. — practical steps
1. Choose a strong mark
• Prefer fanciful (made‑up) or arbitrary marks; avoid generic or merely descriptive marks.
2. Conduct clearance searches
• USPTO TESS search for live/pending federal registrations.
• Common‑law search: internet, domain names, social media, state trademark databases, business registries, and trade directories. Consider a professional search or attorney for comprehensive clearance.
3. Decide filing basis
• “Use in commerce” if already using the mark, or “Intent‑to‑use” if you plan to use it soon.
4. File with the USPTO (TEAS)
• File an application via the Trademark Electronic Application System (TEAS). Provide owner details, specimen (if filing on use basis), classification of goods/services, and pay fees.
5. Monitor the application
• A USPTO examining attorney reviews the application. You may need to respond to an Office Action (clarification, refusal, or requirement).
6. Publication and opposition
• If approved, the mark is published in the Official Gazette for a 30‑day opposition period.
7. Registration
• If no opposition and all requirements are met, the USPTO issues a registration. For intent‑to‑use filings, a Notice of Allowance is issued before registration and you must file a Statement of Use demonstrating use in commerce.
8. Use correct notice
• After registration, use ®. Before registration, use TM (or SM for services).
Maintenance and keeping registration alive — key practical steps
– Between the 5th and 6th year after registration: file a Section 8 Declaration of Use (or acceptable excusable nonuse). Failure leads to cancellation.
– At the 10th year and every 10 years thereafter: file combined Section 8 Declaration of Use and Section 9 Renewal (or combined forms).
– After 5 years of continuous use from registration, file for incontestability (Section 15) where appropriate to strengthen enforceability (subject to meeting statutory criteria).
– Keep records of use (sales, advertising, packaging) to support maintenance filings if needed.
Enforcement and protection — practical steps for brand owners
1. Monitor the marketplace
• Use automated trademark watch services, Google Alerts, and regular web/social searches. Consider professional watch services that monitor new federal applications and domain registrations.
2. Act quickly on infringements
• Send a cease‑and‑desist letter or DMCA takedown when appropriate. Document infringements.
3. Consider alternative dispute resolution
• Negotiate licenses, mediations, or settlement agreements to resolve conflicts cost‑effectively.
4. Litigation when necessary
• File suit for infringement, seek injunctive relief, damages, and accountings. For foreign infringements, pursue local remedies or customs seizures.
5. Use customs recordation
• In the U.S., record registrations with CBP to help block imports of counterfeit goods.
Buying, selling, and licensing trademarks — practical steps
– Assignments (sales): Use written agreements and record assignments with the USPTO and local authorities to preserve rights against third parties.
– Licensing: Draft clear license agreements specifying scope, quality control provisions (to prevent abandonment), territory, duration, royalties, and enforcement responsibilities. Quality control clauses are essential to preserve trademark ownership.
– Due diligence: For acquisitions, evaluate strength, clearance, enforcement history, geographic coverage, goodwill, and any encumbrances.
International protection
– No single global trademark — rights are territorial.
– Use the Madrid Protocol (WIPO) to file an international application based on a home registration or application and designate member countries of interest. Alternatively, file national or regional applications directly in each target market.
Common pitfalls and how to avoid them
– Choosing weak or descriptive marks: Select distinctive names and test for similarity with existing marks.
– Failure to use the mark or to monitor: Maintain continuous use and monitor for infringers.
– Poor licensing: Licenses without adequate quality control can result in loss of rights.
– Allowing genericide: Avoid allowing a brand name to become the generic term for a product (e.g., “escalator,” “thermos” were once trademarks that became generic). Enforce proper use and educate the public on the brand as a mark.
Valuation — practical steps for appraisers and owners
1. Define the scope and legal rights covered by the mark (registrations, territories, exclusivity).
2. Select an appropriate valuation method (income, market, or cost). For operating brands, income or relief‑from‑royalty approaches are common.
3. Gather financial data: historic sales, profit margins, marketing spend, license deals, and comparable transactions.
4. Estimate future cash flows or appropriate royalty rates and apply discounting; document all assumptions.
5. Consider risks: competitive landscape, lifespan of product, potential obsolescence, and legal challenges.
When trademark rights can be lost
– Abandonment for non‑use.
– Genericide (the mark becomes the generic name for goods/services).
– Failure to renew or to file required maintenance documents.
– Assignment without conveying goodwill or failing to record assignments.
Case examples (illustrative)
– Kleenex: Kimberly‑Clark’s Kleenex trademark (launched 1924) is a strong brand that many consumers use generically for tissues — the owner protects the mark actively to avoid genericide.
– BAND‑AID: Johnson & Johnson’s BAND‑AID trademark (brand introduced 1920) has become a widely recognized brand name for adhesive bandages but remains a protected trademark.
– LEGO: Licensing agreements let LEGO use other companies’ characters and let others use LEGO brand under license; careful licensing preserves brand value and legal rights.
The bottom line
Trademarks are a core part of a company’s intangible assets and brand strategy. They provide exclusive rights to source identifiers that can last indefinitely if properly created, used, maintained, and defended. Businesses should select strong marks, conduct thorough clearance searches, register where appropriate, actively monitor and enforce their marks, and periodically value and manage trademarks as commercial assets.
Selected sources and further reading
– U.S. Patent and Trademark Office (USPTO): What Is a Trademark?
– USPTO: Why Register Your Trademark?
– USPTO: Keeping Your Registration Alive / Maintenance
– Investopedia: What Is a Trademark?
– International Trademark Association (INTA): Assignments, Licensing, and Valuation of Trademarks — /
– World Trade Organization (WTO): What Are Intellectual Property Rights?
– U.S. Copyright Office: Frequently Asked Questions — /
– Kimberly‑Clark: Kleenex Brand Story
– Johnson & Johnson: The First BAND-AID Brand Adhesive Bandage —
Practical checklist (one‑page)
– Choose a distinctive mark.
– Do a thorough clearance search (federal, state, common law, domain names).
– File a USPTO application (or national filings abroad) with correct classes and specimens.
– Use TM/SM while awaiting registration; use ® only once registered.
– Monitor the marketplace and USPTO filings.
– Respond promptly to office actions or oppositions.
– File required maintenance documents (Section 8 at 5–6 years; renew at 10 years and every 10 years).
– Enforce rights aggressively and document use and enforcement efforts.
– Consider valuation when licensing, selling, or reporting intangibles.
Editor’s note: The following topics are reserved for upcoming updates and will be expanded with detailed examples and datasets.