Is state or federal law used to settle trademark disputes?

A number of legal principles used to protect owners against improper use of their trademarks derive from federal laws known collectively as the Lanham Act (Title 15 U.S.C. §§1051 to 1127).

In addition, all states have statutes that govern the use and protection of marks within the state's boundaries. In addition to laws that specifically protect trademark owners, states also have laws that protect one business against unfair competition by another business, including the use by one business of a name already used by another business in a context that's likely to confuse customers.

The basic rules for resolving disputes over who is entitled to use a trademark come from decisions by both federal and state courts (called "common law"). These rules usually favor the business that first used a trademark, if another company's use of the same trademark would be likely to cause customer confusion.

What kinds of things can be considered trademarks or service marks?

Most often, trademarks are words or phrases that are clever or unique enough to stick in a consumer's mind. Logos and graphics, such as the Nike swoosh, that become strongly associated with a product line or service are also typical.

But a trademark or service mark can also consist of letters, numbers, a sound, a smell, a color, a product shape, or any other non-functional but distinctive aspect of a product or service that tends to promote and distinguish it in the marketplace. Fictional characters from advertisements, movies, television, and radio programs can also serve as trademarks or service marks when used to promote a service or product.

Individual titles of books and movies are difficult to protect as trademarks unless the title has achieved distinction in sales or advertising or is used in a series -- for example, the Austin Powers movie series or the Harry Potter books.

Some examples of unusual trademarks are the sound of a Harley Davidson motorcycle, the pink color of housing insulation manufactured by Owens-Corning, and the shape of the Galliano liquor container.

Can a business's trade name be protected as a trademark?

The name that a business uses to identify itself is called a "trade name." This is the name the business uses on its invoices, letterhead, and signage. Technically, a trade name is not considered a trademark or entitled to protection under trademark laws unless it actually adorns a product or service.

If a business does use its name to identify a product or service produced by the business, the name will then be considered a trademark or service mark and be entitled to protection (if it is distinctive enough). For instance, Apple Computer Corporation uses the trade name Apple as a trademark on its line of computer products

A trade name that is not used on a product or service may be given some protection under state and local laws (through corporate, LLC, or fictitious business name registration) or be protected against a confusing use by a competing business under federal and state unfair competition laws.

For information on choosing a name for your business rather than product or service names, see the Naming Your Business section of Nolo's website.