Why Do You Need To Trademark in Franchising: Franchisor Edition

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In Franchising, Trademarks play a vital role in brand identification and uniqueness. Nowadays, trademarks are everywhere. But why do you need to trademark in franchising? We will dive in right away.

“Trademark is a word, phrase, symbol, and/or design that identifies the source of the goods of one party from those of others,” states The United States Patent and Trademark Office (USPTO). With a trademark:

  • the brand owner is protected legally, 
  • The brand earns an organic identity, 

Only those brands that are registered with the USPTO, can use the symbol ® in addition to the trademark. Alternatively used symbol TM suggests that although the brand is not registered with USPTO, yet it is protected by the Lanham Act. A trademark restricts other entities from using your trademarked item for their profit. This makes a trademark an important piece of the franchising business. Not only it serves as protection for the franchisor surrounding the brand franchisees onto the system, but they also receive permission to use the trademark. 

The franchisor holds all responsibility for the mark and must provide evidence as to its registration. Item thirteen of the Franchise Disclosure Documents mentions its entirety to the franchisee’s trademark rights and how they are entitled to use them. Even for a small business, that is not considering franchising, trademarking should be considered, considering the numerous benefits:

  • Trademarking gives the business exclusive rights to use the Mark nationwide,
  • It prevents the registration of duplicated Marks, and
  • It enables the business owner to bring about a lawsuit to federal court for any individual who transgresses upon their Mark.

How to Legally Protect Trademarks?

Post obtaining a Trademark, the further important step towards securing the business of any infringement, the franchisor needs to register with the USPTO, file a Declaration of Use after five years of registration date, the franchisor must submit it for renewal.

Ownership and Legal rights for a trademark come about through two sources: through actual usage of the trademark, and the rights hence obtained known as a common-law trademark; and through registration with the USPTO and the rights obtained through this usage, known as a federally registered trademark. The latter has a much stronger value in the eyes of trade laws than the former.

Once you have your Mark, to maintain it, you must file a Declaration of Use with the USPTO after five years of your registration date, and every ten years, you must submit an application for renewal. For individuals with prior knowledge and experience surrounding trademarks, this process can be straightforward, in comparison to the difficulties the beginners might be subjected to difficulties. In that case, it is advised that businesses hire a professional to guide them through the entirety of the trademarking process.

Distinguishing the Types of Trademarks and Their Legal Strengths

  1. Descriptive Trademark
  2. Arbitrary or Generic Trademark 
  3. Suggestive Trademark 

A descriptive trademark, as the name suggests, describes the products that the business sells or the services that the business provides. For example, ‘Refreshing’ might be used for water or beverages.

Trademarks that are generic or arbitrary more likely to be unique and it has nothing to do with the products or the services. 

Trademarks that are suggestive fall between descriptive and arbitrary, and are afforded some legal protection.

To conclude, a business owner/ franchisor should know these things about trademarking to avoid getting churned into litigations: registration of a trademark with USPTO, during the early stage of the business, set up research variedly about the trademarks that can be a possible part of their business and lastly, monitoring and policing the trademark and if any infringement occurring in the market. It is also important to understand the legalities involved with the same.

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