A trademark is “any word, name, symbol, or device, or any combination thereof” that is used by a party to indicate the source of its goods and to identify and distinguish those goods from the goods of others. 15 U.S.C. § 1127. Sellers may use words, such as “EXXON,” or merely use symbols, such as the Nike swoosh. The purpose of trademark law is to prevent consumer confusion, to protect consumers and to protect the goodwill of trademark owners, meaning, customers can count on certain quality from certain brands. For example, consumers develop quality expectations and goodwill toward Nike shoes marked with the Nike swoosh, i.e. consumers “know what they are getting.” The goodwill of the trademark owner is thereby improved for future sales; trademark law helps consumers identify quality and helps owners reap the benefits of quality, in short, branding. Trademark law is vital to building a brand that is associated with quality, making any such brand more valuable.
There are several important trademark categories that are based on the relationship between the mark and the product: (1) arbitrary and fanciful, (2) suggestive, (3) descriptive, or (4) generic. Business owners should consider the relevance of each category in selecting a mark. For example, generic marks are entitled to no protection under trademark law. In other words, the law will not deprive competing manufacturers from calling their product by its name. Thus, a manufacturer selling computers has no exclusive right to use the term “computer.” However, the rules change when there is no logical relationship between the product and the term. In other words, an apple farmer will not secure trademark protection for the term “apple,” yet a computer manufacturer can secure protection for the term “apple,” in that industry, because there is no inherent relationship between the product and the manner of use, making the mark arbitrary and fanciful.
What constitutes trademark infringement? The standard for infringement is the “likelihood of confusion.” Polaroid Corp. v. Polarad Elect. Corp., 287 F.2d 492 (2d Cir.), cert. denied, 368 U.S. 820 (1961); 15 U.S.C. §§ 1114, 1125. The question is whether use of a trademark in connection with the sale of goods would confuse consumers as to the source of those goods, i.e., improperly confusing the source, quality, and goodwill. Competitors are not allowed to steal your goodwill without being subject to infringement claims. In deciding whether consumers are likely to be confused, the Court looks at: