December 1, 2002 | Intellectual Property Today

Corporate Trademark Portfolios: Ten Steps to Effective Management

A Checklist for In-House Trademark Counsel and Administrators

8 min

One of your key tasks as in-house trademark counsel or trademark administrator is to effectively manage the trademark portfolio of your corporation or association. There are ten steps you can take to enhance the value of your portfolio, and thereby increase the profitability of your company or the power of your association:

(1) Audit Your Trademark Portfolio

Periodically assess what trademarks/service marks you use or intend to use, but have not yet been the subject of searches or applications. Consider performing searches and filing applications for any previously overlooked marks.

Periodically determine whether any of your marks have evolved from the form in which they were searched, filed, or registered, including an evolution of a logo or an expansion of the goods/services connected with a mark. Consider whether to amend any affected applications/registrations, or perform new searches and file applications.

If you do business outside of the United States, or intend to do so in the future, determine whether you own foreign trademark applications or registrations. If you do not own any, consider that trademark rights exist on a country-by-country basis.

Determine whether any third parties use your marks but are not vertically related to you (i.e., as subsidiary to parent). Be sure that all such users sign license agreements that call for quality control and that you actually perform quality control. Keep copies of all license agreements in a centralized place and document your quality control efforts.

For any logos, determine whether the creator was an employee acting within the scope of his/her employment when the logo was created. If not, have him/her sign a copyright assignment. Otherwise, the creator may be able to stop you from using the logo.

(2) Observe the Trademark Activities of Your Competitors

Compare the number of U.S. trademark applications/registrations that your strongest competitor owns, along with the distinctiveness of the marks owned, with what you own at Use this as a factor in deciding whether your branding strategy is sufficiently aggressive.

Compare the number of U.S. opposition/cancellation proceedings in which each of your main competitors is the plaintiff with the number where you are the plaintiff at Use this as a factor in deciding whether your policing strategy is sufficiently aggressive.

(3) Perform the Right Searches

Appreciate that there are certain occasions when a knockout search may be preferable to a full search and vice versa:

If you are setting up a new subsidiary whose yet-unused name will match its principal mark, and who will do business throughout the country, it may be best to start with a knockout search and move to a full search with company name coverage.

If you discover a mark that you have used for some time without challenge, but which has never been searched or filed, it may be better to stop after a careful knockout search. A full search might reveal common-law marks that coexist, but of which you were not aware and have not caused confusion in the marketplace. The knowledge might force you to file a concurrent use application claiming rights limited to a specific part of the country.

Understand that multi-country screening/knockout searches are available, but that comprehensive foreign searches must be performed on a country-by-country basis.

Remember that words that are inoffensive in English can have negative connotations in foreign countries. Your mark could be interpreted as "My Donkey’s Uncle," for example, or even something obscene. Perform a connotation check in foreign countries where the mark will be used.

(4) File Applications without Delay

Appreciate that if another party files a U.S. intent-to-use application a day before you file a competing intent-to-use application, the other party will obtain senior inchoate rights.

Identify any first-to-file countries where you perform business but have not yet filed applications. Beware: you could lose rights to another party who files an application first in those special countries (e.g., Taiwan).

(5) Document Your Use

Keep a permanent record of your first use of each mark, on a country-by-country basis, including a copy of the invoice of your first sale under the mark. At the same time, retain copies of related advertisements or promotional materials bearing the mark, for services. For goods, keep copies of labels, tags, containers, packaging, displays, or the goods themselves bearing the mark.

Keep periodic records of your subsequent use of each mark, on a country-by-country basis, as explained above. Keep a permanent record of advertisements that you place in major publications and feature the mark, as well as unsolicited publicity mentioning the mark.

(6) Use Application Options to Your Advantage

Understand that use is not required to achieve registration in most countries outside of the United States and Canada.

Understand that you can avoid the use requirement in the United States by basing your application on a foreign registration.

Remember that you can obtain "priority treatment" under the Paris Convention. That means you can file applications in many countries within six months after filing a first application for the same mark and goods/services, and then have the later-filed applications treated as if they were filed on the same day as the original application.

Remember that you can file one application in the European Community and cover fifteen countries in Western Europe. Understand that the Community application does not cover Switzerland or Norway.

Start to learn about the International application process. The United States will join the Madrid Protocol and open the process in the next year or so. In the meantime, if your business has a physical location operating in a participating country, you may already be able to file such an application.

When you will present your mark in foreign countries in a form that contains a foreign language translation or foreign characters, consider filing foreign applications for the mark in both the foreign and English formatives.

(7) Police the Trademark Registries

Appreciate the deterrent effect that you can achieve by ensuring that your most important marks do not become dilute or part of a crowded field, and by acting aggressively against competing marks. Moreover, appreciate that policing the Registry can be more cost-effective than policing the marketplace and can often be used to reach settlement agreements that control both registration and use in the marketplace.

Assess what conflicting marks might already be registered yet remain vulnerable to challenge, but do not delay. Once a registration reaches its five-year anniversary, you cannot cancel it based on prior common-law rights.

Assess what conflicting marks might already be in the third-day opposition period, or just about to be published for opposition.

Subscribe to an outside service that watches your most valuable marks against all newly published trademark applications (in the United States, this is an Official Gazette watch). Don’t forget foreign countries that are important to you.

For your most valuable U.S. marks that third parties routinely encroach, consider subscribing to a service that watches your marks against all newly filed applications. This provides an opportunity to notify the Applicant that you are monitoring their application and intend to oppose it and, if necessary, demand that they cease and desist use at an early date.

Begin opposition and cancellation proceedings as warranted; serve discovery early, so as to avoid the other side gaining leverage by serving first; and, in cases where the other side does not default, see if there is any way to negotiate a quick and favorable settlement (e.g., by licensing the mark to them).

(8) Police the Marketplace

Understand that you are obligated to police third-party infringements of which you become aware, or you could lose your rights altogether. Take seriously all cases where consumers report actual confusion to you, or where your business colleagues inform you that confusion is inevitable. Keep careful records of any instances of actual confusion.

Understand that if you send cease and desist letters, the other side could file a federal lawsuit seeking a declaratory judgment against you and make you a defendant in court. Make doubly sure that you are the first user of the mark at issue, perhaps by commissioning a formal investigation of the other side’s first use, or they could respond with a cease and desist letter of their own. Know that if you send a letter and the other side fails to respond, and you allow too much time to pass, you may be prevented from challenging them later.

(9) Use Trademark Notices Correctly

Appreciate that using trademark notices (i.e., "TM," "SM," and "®") properly can put others on actual notice of your rights and make certain monetary damages available in the case of infringement. Understand that using these notices improperly—for example, by using the "®" before a mark is registered in that country—can subject you to a claim of unclean hands or, in a number of foreign countries, sizable fines and/or lengthy imprisonment.

Use the "®" immediately after registering a mark. The "®" should only be used after registration and only when a mark is used on or in connection with the goods/service for which the mark is registered. Do not use the "®" in other countries just because the mark is registered in one country. If you are committed to using the "®," you may reduce the risk of adverse consequences by using the statement "Registered in [insert country of registration]" conspicuously near the mark; however, this is not always a panacea.

In the United States and many other countries, use the "TM" or "SM" immediately after clearing a mark and beginning use. Understand that some countries recognize the "TM" but not the "SM" (e.g., Japan), so it may be safest to use the "TM" internationally.

(10) Give a Trademark Presentation to Your Marketing Colleagues

Establish open lines of communication and a plan for trademark decision-making with your marketing colleagues. Emphasize the need for them to clear proposed marks through your trademark administrator upon creation and suggest that they submit backup proposed marks to him/her along with their first choice.

Educate your marketing colleagues about the risks of infringement and how stronger marks may be easier—and less costly—to secure and protect.

A Final Thought

Try to view trademark expenses as a percentage of your overall annual expenses for advertising and promotion.* Vigilant trademark work is one of the most cost-effective ways to improve the profile of your company or association and thereby increase profit or power. Share this perspective with those responsible for setting your budget for trademarks.

*Use this view for planning purposes, not necessarily accounting purposes.
© 2002 Andrew D. Price