The Five Categories of Trademarks: Legal and Marketing Considerations

Marketing and legal issues must be considered in tandem when a business owner endeavors to name a business, product or service. Following certain guidelines will maximize the potential of your chosen name to create a brilliant and lasting brand for your business.

What Are The Five Trademark Categories?

Courts divide trademarks into five different categories, ranked by degree of inherent distinctiveness. Arbitrary, fanciful and suggestive trademarks are the easiest to protect, descriptive marks offer protection under certain circumstances and generic marks never offer protection. When contemplating a trademark for your business, you should always strive to choose (and register) trademarks that can comfortably fit into one of the three strong trademark categories.

Where Does My Mark Fit: A Fuzzy Issue?

A significant percentage of trademark disputes feature the central issue of which category a trademark belongs to. In particular, disputes often erupt over whether a trademarked term should be characterized as suggestive (as opposed to descriptive) or descriptive (as opposed to generic). Characterization shifts can dramatically alter the bundle of rights associated with the trademark, and which category your trademark fits into is not always easily determinable merely by applying good old-fashioned logic. However, a skilled attorney can make well-educated guesses based on prior court and trademark office decisions.

Legal Strength Versus Marketing Ease: Sometimes An Inverse Correlation

Understanding the hierarchy of trademark strength (which in turn determines the degree of protection which a trademark is entitled to) empowers a business owner to choose a trademark that will be much easier to protect. It also will help you avoid the unnecessary and often staggering legal costs that accompany trademark infringement issues. Below, we discuss trademarks in descending order of legal strength. Marketing challenges and advantages associates with these categories are also discussed.

Fanciful Trademark: A fanciful trademark is made-up, invented for the sole purpose of functioning as a trademark. This is also called a neologism when it describes a single word. Kodak and Exxon are famous examples of fanciful trademarks. George Eastman, creator of the Kodak trademark, had some simple yet profound advice on what makes a good trademark: he quipped that it should be short, vigorous, easily spelled and meaningless.

Fanciful trademarks illustrate one undeniable trademark principle: the less inherent meaning a trademark has, the more meaning you can create by association with your business, product or service. Just as important, once you have invested time and money promoting a fanciful trademark, it is easy to expose and prevent (and perhaps punish) competitors from trying to profit from your goodwill. Fanciful trademarks are thus ideal trademarks from a legal standpoint.

Arbitrary Trademark: An arbitrary trademark has a common meaning, but the meaning is unrelated to the goods or services offered for sale under the mark.

Apple (computers) is a good example of this type of trademark. We all know that the common meaning of apple is as a fruit, which is pretty far removed from the digital world (insert your own lame "byte" joke here). In the case of less edible and more digital Apple, this choice of trademark (rumored to have been an impulsive decision based on a temper tantrum by the legendarily cantankerous Steve Jobs) actually has been quite costly. Apple had been established as a trademark by virtue of being the name of the Beatles' record company (Apple Corps). As a result, Apple Computer has lost a couple of very costly court battles related to its foray into anything musical. Currently, it is involved in a third battle over iTunes (this battle has been in the news quite a bit lately as of this writing).

Notwithstanding Apple's misfortunes, arbitrary and fanciful trademarks are clearly the preferred categories for a prospective trademark — if we ignore marketing considerations. They are easier to adopt than suggestive or descriptive trademarks, and easier to protect once adopted. Why? Well…they are inherently distinctive.

Should I Always Choose An Arbitrary Or Fanciful Trademark?

First, my personal viewpoint: an investment in an arbitrary or fanciful trademark is often worthwhile, particularly for a new business with ambition, and especially if the business model is unique or somewhat unfamiliar to the public. VeriTrademark will devote more detailed ruminations to this topic in a future article, but for now let's just note some practical reasons why marketing professionals and business owners might prefer to stick with a suggestive or descriptive trademark. One reason is that a good arbitrary or fanciful name can drain a lot of creative currency (and perhaps a lot of the other kind as well). Moreover, since consumers do not initially associate these trademarks with the product or service, a business may have to invest significant marketing and advertising resources to create awareness. Now, without further ado, let's discuss the best alternative – suggestive trademarks…

Suggestive Trademark: A suggestive trademark is so named because it suggests a quality or characteristic of goods and services; such a trademark might also be called allusive. However, a suggestive trademark requires a subtle leap in thought (or as courts often put it, "imagination, thought and perception") for the consumer to reach a conclusion as to the exact nature of the goods. Citibank (financial services), Greyhound (bus lines), Jaguar (automobile), and Playboy (magazine) are examples of well known suggestive trademarks. Many marketing professionals prefer suggestive to arbitrary or fanciful trademarks because the latter plants a seed in the mind of consumers as to the nature of the goods and thus requires fewer marketing and advertising expenditures to build brand awareness.

Suggestive trademarks come with one major risk: what one person (you, the business owner) thinks is suggestive, another person (or court…or trademark office examining attorney) may deem descriptive, and descriptive marks have a substantially reduced bundle of rights associated with them than trademarks in the "higher" categories.

Descriptive Trademark: A descriptive trademark merely describes some portion of the goods or services to be sold under the mark. Courts often use the guidelines that a trademark is descriptive if it "conveys an immediate idea of the ingredients, qualities or characteristics of the goods". Descriptive trademarks may only achieve substantial federal protection if they acquire "secondary meaning" –which takes at least five years and a significant advertising budget. Thus, owners of trademarks that walk the line between descriptive and suggestive obviously want to convince the USPTO that their trademark is actually suggestive.

Generic Trademark: A generic trademark can not be protected as a trademark because it describes a category of product or service. This is a matter of public policy; the federal government has determined that free use of such categorical trademarks benefits consumers.

Sometimes, previously strong and valid trademarks lapse into generic status due to a lax protection strategy of the owner. Unfortunately, the trademark landscape is littered with once famous brands that were afflicted with "genericide". Aspirin, cellophane, zipper, monopoly (the game) and escalator are classic examples. Many other brands (like Xerox) have mounted a vigorous advertising campaign to prevent this from happening.

How Can An Attorney Help Me Create A Strong Name?

The guidance of a good trademark attorney can be an invaluable asset to your new business, just as the trademarks themselves may someday be the most valuable asset that your business owns. Beware using the services of patent attorneys (right-brained former scientists and engineers) masquerading as trademark attorneys. Beware "naming consultants" or services like LegalZoom which skirt the line of legal permissibility by providing often shoddy pseudo-legal advice. For that matter, beware any attorney who is unwilling or unable to think in terms of marketing considerations. Look instead for those few service providers who can effectively and economically help you choose excellent names from both a marketing and legal standpoint.