SERVICE MARKS

Service marks are a special type of trademark designating a service instead of a product. In practice, the terms "service mark" and "trademark" are often used interchangeably; the terms "trademark" and simply "mark" may also be used to indicate both product and service marks. Examples of well-known service marks include American Express, Hilton Hotels, and American Airlines.

As with all other trademarks, service marks exist to differentiate a unique class of services offered by one organization from similar services offered by others. They provide all the same protections as conventional trademarks, but since services can be harder to define than physical products, registering a service mark can require slightly more rigorous evidence that the underlying activity is indeed a valid business operation. Service marks need not be registered, though, to carry legal force, in which case they are called common law service marks.

Service marks offer several advantages to their users. By providing a name or symbol that consumers can readily identify, they aid in word of-mouth advertising and help build customer loyalty. By constituting a distinctive mark customers associate with a company's services, service marks foster goodwill—the tendency for customers to repurchase services from that company. Service marks attract attention from consumers and help them distinguish among competitors and find the services sold under a particular mark.

THE NAME

The essential components of a typical service mark are a name, a visual representation of the name (logo) and, possibly, the look of the environment in which the service is performed. The name is simply whatever a company calls its service. It may be a common word or phrase, or it may be a unique or original name created by the company. Generally, the more unique a name, the stronger the protection it will enjoy. (Choosing a unique name can also be a wise decision from a marketing standpoint; see brands and brand names.) Companies should also avoid marks bearing similarity to others' marks; McDonald's restaurants, for instance, won an infringement suit against a chain of motels using the name McSleep.

THE VISUAL PRESENTATION

The design or logo concerns how the name appears in advertising or other company materials, and includes the color, type style, and any graphical representation of the name or graphic accompanying the name. The concept of unique design in service marks also extends to a broader class of visual elements known as trade dress, or the overall visual presentation of a product or service. For example, a restaurant's distinctive decor, in addition to its other unique traits, was upheld by the U.S. Supreme Court as protected trade dress for a service in the 1992 case Two Pesos Inc. v. Taco Cabana Inc. Though each may be protected separately from infringement by others, the name and design/presentation are often considered jointly when allegations of infringement arise.

REGISTRATION

Under the federal Trademark Act of 1946, service marks are afforded protection from illegal use by others—a form of unfair competition known as trademark infringement. While any company can gain some protection by merely using a mark in the course of selling or advertising its services, most authorities advise registering the mark at the federal level, preferably with the Patent and Trademark Office (PTO) of the U.S. Department of Commerce, to gain the fullest possible protection against piracy. Among the many benefits to the owners of federally registered service marks are the right to exclusive, nationwide use of their marks (within a limited scope of activities); the right to sue in federal court for trademark infringement; and a basis for applying to use the mark in foreign countries, as well as to prevent foreign competitors from using the mark in the United States. Moreover, federal registration can last indefinitely, so long as the registrant—the owner of the mark—meets certain requirements, such as continuing to use the mark and periodically renewing registration with the PTO.

States too offer trademark protection, generally simpler, quicker, and cheaper to obtain than federal registration. Not all states offer registration for service marks, however, and legal protection is limited to the particular state, rather than to the entire United States and its territories and possessions. Furthermore, federal registration usually takes precedence over state registration when legal disputes arise. On the other hand, state registration can be useful for businesses that don't meet the requirements for federal registration.

Obtaining federal registration for a service mark is a lengthy—often lasting a year or more—and complex process that begins with filing a written application with the PTO. To be eligible for filing such an application, a company must either have established prior use of the service mark (including foreign use for non-U.S. companies) or have a bona fide intention of using it on services rendered in federally regulated commerce, defined by the PTO as "all commerce that may lawfully be regulated by the U.S. Congress, for example, interstate commerce or commerce between the U.S. and another country." This stipulation is important and has resulted in numerous legal claims and lawsuits, such as a case in which Bookbinder's Restaurant in Philadelphia was found ineligible to register its name as a service mark because it was only a local business operating within state lines, whereas a pit-barbecue restaurant located on an interstate highway was found eligible.

Companies meeting these criteria submit a written application form (obtainable from the PTO in print or online), along with a filing fee and a drawing of the service mark; those businesses basing their application on prior use must also submit samples—brochures, advertisements, business cards—of the mark's use in commerce. The PTO then reviews the application, gives it a serial number, and assigns an examining attorney to determine whether the mark can be registered; if it can, the PTO publishes a notice of the mark in the weekly Official Gazette, giving other parties a chance to oppose the registration. Barring any opposition, successful applicants are issued a certificate of registration.

The PTO maintains two registers, principal and supplemental, the former conferring more rights than the latter. The PTO also specifies eight categories of services for which applicants can apply for registration of a service mark.

The PTO's examining attorneys can refuse registration for various reasons—among them that a mark is merely ornamental or descriptive, that it's disparaging or deceptive, or that it too closely resembles a mark already registered. Thus, a key part of the examining attorney's job is to search the PTO's library of existing and pending service marks to ascertain whether an applicant's mark conflicts with marks already in use.

Companies in the process of choosing a service mark are advised to conduct a preliminary search to verify that the mark hasn't already obtained national, state, or other rights. To aid in such efforts, the PTO maintains a trademark search library in Arlington, Virginia. Alternatively, companies can conduct a search through a patent and trademark depository library, available in most states, or hire an attorney or search firm to conduct the search.

Once registration is granted, a firm is entitled to use the registered trademark symbol (@) or, as alternatives, the phrases "Registered in U.S. Patent and Trademark Office" or "Reg. U.S. Pat. & Tm. Off."

DEFENDING A SERVICE MARK

Even once they're registered, service marks and other trademarks are in large measure only protected to the extent that they are used continuously and that the owner defends them against encroachment. The first step to defending a service mark occurs before registration through use of the ("M) symbol on company marketing. This act, which may done regardless of whether the service mark proprietor ever intends to register the mark, alerts other businesses and individuals that a claim is being made to the name, logo, and so forth. Aside from obvious cases of infringement, when a competitor uses a deceptively similar name or logo to tap into another company's business, service mark holders must also police against "genericization" or dilution of their name. This occurs when people routinely use the name to refer to an entire class of products or services, and not necessarily the particular ones being offered by the owner of the name. Well-known historical examples of trademarked products that became generic labels include fiberglass and styrofoam. While to some extent this is eventually out of the company's control, it can potentially be reduced by careful marketing that emphasizes the proprietary nature of the service and by sending warnings to media outlets if the name is being used generically in the mass media.

INTERNET SERVICE MARKS

One of the more important recent developments concerning service marks is the handling of Internet domain names. Domain name registration for technical purposes (i.e., creating a site name that can be looked up online) has nothing to do with trademark registration in itself, but the choice of names and who chooses them does matter. While no hard rules are yet in place, in general it is possible for companies to register Internet addresses as trademarks with the PTO, in addition to their regular business marks. Nonetheless, a number of trademark conflicts can arise with these names because of the separate registration systems.

First, a company that otherwise has no legitimate claim on a well known name may purchase that name through the technical domain registration process, which occurs solely on a first-come, first-serve basis. Usually the company only wants to resell the name to the company that holds the trademark, e.g., if a person bought the rights to the domain " mcdonalds.com " before the fast-food restaurant chain did, they might try selling it to the company for a profit. This would not necessarily be illegal, although McDonald's Corp. might well be able to prove it had an active trademark and force the upstart owner to give up the name without even going through a full federal court proceeding. While there was a rash of these sorts of conflicts as commercial use of the Internet exploded in the mid-1990s, more recently such abuses have been effectively reduced, in part because of the Trademark Dilution Act of 1996, which strengthened trademark holders' rights in such cases.

Still, trademark protection in that case might be ambiguous if the domain registrant had some coincidental relation to a more famous name, e.g., a nonfood business called McDonald's Plumbing, regardless of their intentions for it. Also, if it were a subtle but obvious variation on a name, it might not be so easily protected from the upstart company without going to court. However, if the upstart decided to start selling hamburgers, it would be a clear-cut example of infringement, as would be names that closely imitate the Internet-based businesses whose domain name is nearly identical to their company name, such as Amazon.com , Inc.

Because of such considerations, trademark attorneys have recommended that businesses register a trademark on a name before obtaining a matching Internet domain name to minimize the risk of claims against the name.