The Federal Trademark Act of 1946, known as the Lanham Act, governs the law of trademarks and their registration and provides causes of action that protect trademark rights from infringement. The purpose of the Lanham Act is to protect the owner of a mark by preventing others from using the owner’s mark without permission or in a way that will cause confusion as to the actual source of the mark.
According to the act, a trademark includes "any word, name, symbol, or device, or any combination thereof . . . used by some entity to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown" (15 U.S.C. § 1127, 2008). A trademark serves several important functions: It identifies a seller’s goods and distinguishes them from those sold by others; it signifies that goods come from one particular source; it indicates that products are of a certain quality; and it advertises, promotes, and assists in selling the particular goods.
Because of these functions, trademarks are known by many different names (see figure 9.1). The strongest marks that an organization can have are arbitrary or fanciful marks. These have no direct relationship to the product itself, such as NIKE for sports apparel; instead they are inherently distinctive because they indicate the source of the goods rather than describe the goods themselves. Suggestive marks may hint at the characteristics of the goods or services but require some imagination to understand the product they stand for. For instance, although some consumers would understand that Hot Pockets (a suggestive mark) refers to a warm food item, it takes a bit of imagination to understand that the name stands for a meal wrapped in a flaky crust.
Marks that are merely descriptive only identify a characteristic or quality of a good or service. For example, a golf ball that produces a loud screeching sound when hit is named the Screech Golf Ball, which is a descriptive mark. Descriptive marks can only be given trademark protection if they obtain secondary meaning. Secondary meaning refers to when a mark has received widespread use and public recognition so that it indicates the source of the good or service instead of the good or service itself. For example, team logos and color schemes, although not inherently distinctive, can obtain secondary meaning once they have been associated with a particular team in the marketplace.
Generic marks do not receive trademark protection because they refer to the name or class of the good or service and are so common that they do not clearly indicate the source of the good or service. Some companies that create distinctive names or logos eventually lose their trademark rights to some names or logos because they become so well known. The classic examples are Kleenex for facial tissue and JELL-O for gelatin. When both products were first introduced, their names were merely the company names for the particular brand of facial tissue and gelatin. Now both marks are so generic that people often refer to facial tissue as Kleenex and gelatin as JELL-O regardless of what particular brand they have purchased.
The Lanham Act also protects collective marks and service marks. A collective mark is a trademark used by the members of a cooperative, association, or other collective organization to indicate membership in that organization. Examples of collective marks in sports are widespread, from sports league initials such as NBA and NHL to college conference names such as Big Ten and SEC. A service mark is used in the sale or advertising of services to identify and distinguish the services of one entity from the services of others. Whereas a trademark identifies the source of a product, a service mark identifies the source and quality of an intangible service. For example, the mark NCAA, as it stands for events and services related to the National Collegiate Athletic Association, is a service mark.
To create ownership rights in any of these types of trademarks, the trademark owner must be the first to use the mark in trade (i.e., by selling a product or service that displays the trademark). The owner also must make continuous, uninterrupted use of the mark after this first use on its products or within its services. Once the trademark is used, consumers should be able to identify and distinguish the owner’s unique goods or services from those of others in the particular industry. A valid trademark owner may also federally register the mark. However, although federal registration extends rights to the trademark owner to use the mark throughout the United States and provides notice to other users of the mark’s validity, registration only extends trademark rights across the United States; it does not necessarily extend internationally. A trademark owner must then reregister the mark every 10 years in order to exclusively use the marks on his or her products and services.