Last month, I discussed the advantages of obtaining trade-mark registration before you start to franchise your restaurant. The term “advantage” may be understating the critical importance of trade-mark protection when you are licensing intellectual property to franchisees that are relying on the name and goodwill associated with that trade-mark in attracting customers. For most franchisees, it’s the name that got them interested in your restaurant in the first place.
But even before you start thinking about franchising, wouldn’t you want to know that your restaurant’s name can be protected? That, even if you have no expansion plans, someone won’t come knocking on your door telling you to change your business’ name because it’s too similar to their registered trade-mark? Or, perhaps just as important, that you have the right to knock on someone else’s door and compel them to change their name because you have the trade-mark protection for it?
As a result, it’s always better to find out sooner rather than later whether you are currently operating under a trade-mark that is even registerable. Although it is a difficult reality to accept, it is far easier (and cheaper) to change your trade-mark and retain your customers at the outset of your expansion plans than it will be once your business has grown. The comfort that a registered trade-mark offers a franchisee, rather than the insecurity of possibly having to change a name down the road, cannot be discounted.
Determining whether you offer goods and services under a trade-mark that is registerable is not always a straightforward exercise. There are many factors which the Trade-marks Office will take into consideration when reviewing a trade-mark application.
First among those is whether your trade-mark is confusingly similar with any other trade-marks on the database such that someone may think that the goods and services are offered by the same company. In fact, the test to answer that question is to ask whether the casual consumer somewhat in a hurry with imperfect recollection may, as a first impression, think that your trade-mark is the same source as another trade-mark. The circumstances which are considered in applying that test are the inherent distinctiveness of the trade-marks in question, the length of time each has been used, the nature of the businesses, the nature of the trade and the degree of resemblance between them in appearance, sound or ideas suggested by them.
Textbooks are filled with case law analyzing the meaning of those criteria.
Other restrictions on trade-mark registerability include that the mark cannot be clearly descriptive of the goods and services associated with the mark (that is, you can’t get a trade-mark for a restaurant specializing in pizza called “The Pizza Joint”), and that the mark cannot be primarily comprised of the name of a living person or someone who has died in the last 30 years.
Of course, there are exceptions to every rule, so make sure you consult with a legal advisor who specializes in trade-mark law before attempting to apply for a trade-mark. And remember to apply for a trade-mark as soon as possible… even yesterday if practical.
By Chad Finkelstein, franchise lawyer at Dale & Lessmann LLP
January 15, 2013