Intellectual property, including trademarks and service marks, are often ignored as assets because they are not tangible like equipment and materials. However, overlooking the value of such assets can be costly for a contractor focused on developing an excellent reputation and a profitable business.
Trade Names and Trademarks
Trade names identify businesses. The amended Trademark Act of 1946 (the Lanham Act) defines the terms "trade name" and "commercial name" to mean the same thing. In short, a trade name and a commercial name both mean any name used to identify a business or vocation.
A trade name also can be used as a trademark and a service mark. For example, IBM uses IBM in its company name to identify its computer products and its computer leasing services.
Trademarks often are referred to as brand names because they are used to identify or to distinguish a particular company’s products. For example, Bobcat is a trademark as well as a brand name for construction equipment.
Frequently, the name of the company that makes a particular brand of construction equipment is not known; however, it is generally assumed that all construction equipment bearing a particular trademark originates from the same company. Thus, trademarks are words, names, symbols, devices or any combination of these things used to identify and to distinguish one company’s products from another company’s products.
Service Marks
Service marks have particular significance to the construction industry because they identify and distinguish one company’s services from another company’s services. For example, Turner Construction Company is a service mark for building construction services. Like trademarks, service marks can be words, names, symbols or devices.
Service marks are symbols of quality, so a service mark owner must work hard to maintain consistent quality standards. Doing so ensures consumers get what they expect.
In the construction market, contractors must provide consistent levels of quality construction services to maintain the value of their service marks. If a contractor fails to maintain quality control, then a building owner, or another consumer, may feel deceived, and the contractor’s service mark may lose its value in the marketplace.
Service marks also are symbols of goodwill because they help ensure a contractor will reap, to the exclusion of its competitors, the rewards that come with providing quality construction services. Therefore, a contractor’s intellectual property goal should be simple: to convey, through its service mark, to potential customers that the contractor’s services are desirable. Once desirability is attained, the service mark owner has something of value.
When a service mark attains value in the marketplace, another contractor might attempt to pilfer the commercial magnetism of the strong mark by using a confusingly similar service mark. In such a case, the owner of the strong mark can turn to the courts for legal assistance in stopping the other contractor from using a similar mark to identify competing services.
To ensure a service mark is afforded legal protection, the process of developing a service mark’s value should include registering the mark with the U.S. Patent and Trademark Office. Thereafter, the owner should frequently evaluate its intellectual property portfolio to ensure all necessary steps have been taken to preserve and protect the asset.
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Wednesday, February 8, 2012