Brand names, a synonym for trademarks and service marks, are important intellectual properties upon which the public learns to rely to identify a source and a standard of quality of the products or services it purchases. Trademarks and service marks are words, phrases, designs, sounds or symbols. They are used on or in association with goods and in association with services to be performed. The public learns, through purchasing experience, that the goods or services bearing a mark come from a single (but possibly anonymous) source and will meet an expectation of a standard of quality that the goods or services sold under the mark have met in the past. This predictability of a level of quality and reassurance of a known source provides the owner or user of the mark with the benefit of good will held by the public for the product or service that he offers. This goodwill is often the cornerstone of the owner's business.

Trademark rights arise in one of two ways: either by filing a mark with the United States Patent and Trademark Office based on a bona fide intent to make use of the mark on a product or in association with a service that will soon be offered to the public, or by actually using the mark in commerce on a product or in association with a service.

Under the federal law, an application for registration may be filed based on actual use of the mark or a bona fide intent to use the mark in commerce. The filing date of an application with the United States Patent and Trademark Office to register a trademark or service mark which the applicant intends to use on a product or in association with a service establishes a date of constructive use of the mark. The act of filing the application, therefore, through constructive use, can create a nationwide priority of rights in the mark against any other person who subsequently adopts the same or a confusingly similar mark. The intent to use the mark must be a bona fide intention or the application may be invalid and the applicant may be subject to certain penalties for filing a fraudulent claim of intent. The constructive use provided by the filing of the application claiming an intent to use the mark is contingent upon the mark ultimately issuing as a federal registration. The federal registration will be issued only after the applicant has made actual use of the mark on the goods or in association with the service that it claims to have intent to use when the filing takes place. Actual use of the mark must be made within six months of the time that the Trademark Office issues a notice of allowance of the mark after the application has been filed, although that period may be extended up to thirty months in appropriate circumstances. When use is made and the federal registration issues, the owner's rights in the mark are superior to all who have adopted the same or a similar mark for the same or a similar product or service subsequent to the filing date of the owner's application.

Obtaining a federal registration based on the bona fide intent to use the mark or based on the actual use of the mark provides significant advantages. Among these advantages are the following:

  1. Federal registration confers the benefit of nationwide constructive use and, thus, a right of priority, over all subsequent users or filers, as of the application filing date.
  2. Registration is constructive notice; it prevents acquisition of common law rights by innocent adoption and use of the same or a similar mark by another.
  3. A certificate of registration creates a legal presumption and is sometimes conclusive evidence of the registrant's right to exclusive use of the mark and the validity of the mark's registration.
  4. Registration permits the use of the " " symbol or other statutory designations of registration.
  5. Goods bearing a mark which infringes on a registered mark may be excluded from entry into the U.S. by recordation with the U.S. Customs Service.
  6. Registration furnishes the basis for foreign registration under a treaty known as the Paris Convention.

Those who make use of trademarks or service marks without filing for federal registration can obtain exclusive rights in those marks in the market in which the marks are used, if the use is prior to the filing date of any federal registrant or any other user in that market of a confusingly similar mark. This market may be small, i.e., a town or part of a town, or large, i.e., the entire United States. A wider area, referred to as the "zone of natural expansion," may also be granted to the prior user if it can be shown that there were plans to expand before a junior user entered the market.

An application for a federal registration of a trademark or service mark filed in the United States Patent and Trademark Office is examined by government attorneys to ensure that the mark is not likely, when used on or in connection with the goods or services of the applicant, to cause confusion, or to cause mistake, or to deceive the consuming public that the goods or services bearing the mark have the same source, origin or approval as those sold under a previously registered mark which has not been abandoned or canceled. The Examiner also makes a determination that the mark is not inherently incapable of performing the identification function of a mark because, for example, it is the generic word for the product or service with which it is used or because it is descriptive of the products or service with which it is used.

Federal trademark registrations are valid for ten years and can be renewed for like periods, provided the mark is constantly used. Failure to use a mark can cause the rights in the mark to be lost. Such abandonment of the mark causes the mark to lose its significance to the public as an identification of a single source and a standard of quality.

The use of the registration symbol with a mark indicates that it is federally registered. The symbol TM is often used with unregistered trademarks to give notice to the public that the user is staking out a claim in the symbol as a trademark, but such use is optional. The symbol SM may similarly be used to designate a unregistered service mark.

Because trademarks and service marks can be licensed, they are a primary basis for the franchising industry in the United States. The public comes to learn to expect a certain quality standard from every facility, a fast food restaurant chain for example, that bears the same name or service mark. As long as the mark's owner maintains the same quality standards for each of the facilities bearing its name, it can license the use of the name to many people.

Finally, there are special types of marks known as collective marks or membership marks which identify organizations and their members and certification marks which are used to identify the fact that a product or service meets a certain acceptable standard, e.g., GOOD HOUSEKEEPING SEAL.