Category: Corporate and Business

A Guide to Proper Trademark Use

A GUIDE TO PROPER TRADEMARK USE

The proper use of trademarks is vital in order to establish and maintain your invaluable trademark rights. Proper use preserves a mark’s ability to identify the origin of products or services, and minimizes the likelihood that the mark will become generic or be abandoned.

The following guidelines for proper trademark use apply equally to advertisements, promotional material, displays, packaging, product labels, signs, web sites and other media containing, discussing, or describing, marks.

 GIVE NOTICE OF YOUR TRADEMARK RIGHTS

Providing public notice of trademark rights is important for registered and unregistered marks alike.

The appropriate symbol should be used in connection with all uses of the mark. Typically, proper notice should be adjacent to the mark, usually appearing above or below, and to the right of, the mark. When a mark is used throughout a document, the appropriate trademark symbol should be used at least in connection with the first use of a mark.

Trademark Notices in Registered Marks:

The appropriate form of notice to employ when the mark is registered with the United States Patent & Trademark Office (“PTO”) is as follows:

•           Use the symbol, “®”;

•           Use the legend, “Registered, U.S. Patent and Trademark Office”; or

•           Use the abbreviation, “Reg. U.S. Pat. & Tm. Off.”

Failure to use proper trademark notices each time a federally registered mark is used may hinder the prosecution of a trademark infringement action by allowing the wrongdoer to claim “innocent infringement” as a defense. If proper notice is not used and displayed prominently the infringer may claim ignorance of trademark rights, and damages available to the trademark owner may be reduced.

Trademark Notices in Unregistered Marks:

Providing notice of unregistered marks is highly recommended, but not required by law. Such notice enhances a mark’s source-identifying function and puts third parties on notice of your trademark rights. Again, placement of the notice should be adjacent the mark, usually appearing above or below, and to the right of, the mark in which rights are asserted. Notice of rights in an unregistered mark, consist of the following notations:

•           TM for an unregistered trademark; and

•           SM for an unregistered service mark.

TRADEMARKS ARE ADJECTIVES – NOT NOUNS OR VERBS

Trademarks and service marks are adjectives, and should be used only as such. Marks should never be used as nouns or verbs. Additionally, marks should not be pluralized, nor used in the possessive form, unless of course, it is part of the mark (e.g. McDonald’s). Use of a mark as a noun or verb, over time, can result in genericness, or a finding of unintentional abandonment – even when such improper use emanates from the public, rather than a trademark owner.

One way to ensure that a mark is used in proper form is to follow each use with the generic noun for the product identified. Using the word “brand” after a mark, and before the generic product name, further guards against improper use.

TRADEMARKS SHOULD BE USED CONSISTENTLY AND DISTINCTIVELY

In order to preserve invaluable trademark rights it is important to use the mark consistently in the same way.  Further, the mark should be set apart from surrounding text. The following are helpful tips to insure your marks are used properly:

•           Do not modify your mark.

•           Do not abbreviate the mark.

•           Consistently use the mark in the same font and style.

•           If color is a feature of the mark, use colors consistently.

•           Do not combine the mark with names or marks of others.

•           Do not use mark in combination with other words, symbols or logos.

•           When possible, set your mark apart from text.

•           When a mark is used in text, the marks should be used in ways that distinguish them from surrounding text.

The use of trademark notices, generic terms, and “brand” in connection with marks, helps differentiate marks from generic terms. However, marks also should be CAPITALIZED, underlined, italicized, placed in “quotation marks,” or depicted in boldface type, whenever they appear in printed or electronic media.

AFFIX YOUR MARK TO GOODS AND SERVICES

Not all product names, business slogans, and advertising phrases are trademarks and service marks. In order for trademark rights to be created and maintained, a mark must be affixed to a specific product, or used in connection with the provision of a particular service.

Trademarks are “affixed” by applying them directly to a product, to packaging for the product, or to tags or labels attached to the product or point of purchase displays. Use of a mark on a website or catalog adjacent to a picture of the goods along with a means to order the goods constitutes proper trademark use. Service marks are “affixed” by using them in signs, promotional materials, websites and/or other advertisements offering the services. As a general rule, a mark is not a mark until it has been affixed!

To learn more about trademark use or discuss any issues relating to the protection of your intellectual property, please contact:

Cynthia B. Stevens at:

(312) 368-0100 / cstevens@lgattorneys.com

The Importance of Website “Terms and Conditions”

You may have noticed that many of the websites you visit have what are often called “Terms and Conditions” or “Terms of Use Agreements” (“Agreement”).  Links to such Agreements are often found at the bottom of the home page and/or the website, and the user must accept the terms and conditions in the Agreement in order to use the website. Prudent business owners include such Agreements on their business’s websites to make it clear on what basis information, products or services are being provided through the website and, to the extent possible, limit any liability that may arise out of use of the website.  If your business operates a website it is to your advantage to include an Agreement.  Such Agreements are especially important to companies that sell products, distribute content, and permit users to post messages or other content that raises the potential for third-party liability on their websites. The specific terms contained in the Agreement will vary depending on the nature of the website and the underlying commercial relationship between the user and the website owner.

Most Agreements should address some or all of the following: (1) a clear statement that use of the website constitutes acceptance of the terms set forth in the Agreement; (2) a detailed description of the services, products and/or  information provided through the website; (3) any payment terms and return policies for e-commerce websites; (4) the method for creating and canceling accounts, if applicable; (5) general disclaimers and website-specific disclaimers depending on the nature of the website; (6) ownership of the intellectual property rights in and to the website  content; (7) intellectual property rights in and to any submissions by the user;  (8) limitations of liability; (9) any age restrictions; (10) Digital Millennium Copyright Act safe harbor language; (11) restrictions on the user conduct; and (12) a dispute resolution section, including choice of law and arbitration provisions.

To discuss your website’s “Terms and Conditions” or “Terms of Use Agreements”, or other important disclaimers which may be appropriate for your business, please contact:

Cynthia B. Stevens at:

(312) 368-0100 / cstevens@lgattorneys.com

New Business Ventures: Register as a “New Business Venture” and Attract Investors Seeking to Take Advantage of the Illinois Tax Credit for Angel Investments

New business ventures can register with the Illinois Department of Commerce and Economic Opportunity (the “DCEO”) to qualify as “eligible” to participate in the Illinois Angel Investment Credit Program (the “Program”). If a new business venture is qualified by the DCEO to participate in the Program, then an angel investor who invests in the new business venture may claim an “Angel Investment Credit” against its Illinois income taxes in an amount equal to 25% of an “angel investment” made by the individual angel investor, as reflected on the Tax Credit Certificate issued by the Department of Commerce and Economic Opportunity (86 Ill. Adm. Code 100, eff. July 9, 2014), and subject to certain rules and restrictions. Therefore, the Angel Investment Credit is an incentive for investors to invest in your business.

Any business desiring to qualify as a new business venture must meet certain requirements, including but not limited to, being headquartered in Illinois, having at least 51% of the employees employed by the business employed in Illinois, having fewer than 100 employees at the initial time of registration, and the business has received not more than $10,000,000 in aggregate private equity investment in cash or $4,000,000 in investments that qualified for tax credits.

The Illinois Angel Investment Credit Program has allocated $10 million in tax credits annually, from 2011-2016, and the Angel Investment Credit is awarded on a first-come, first-serve basis. New business ventures and “angel investors” should act fast to either submit a registration application (for new business ventures) or claimant application (for investors). An investment is considered to be an “angel investment” if the investor invests in a “qualified new business venture” in exchange for an ownership interest, with such investment being at a risk of loss.

To discuss the “Angel Investment Program” generally, the benefits and procedures of registering your business as a new business venture, or how it can help reduce an investor’s Illinois income tax liability, please contact:

Morris R. Saunders at:

(312) 368-0100 / msaunders@lgattorneys.com

Attention Employers and Employment Agencies: Criminal Records and Criminal Histories of Prospective Employees Off-Limits at Application Stage!

The Job Opportunities for Qualified Applicants Act (the “Act”), a new Illinois statute, will become effective January 1, 2015. The Act restricts employers and employment agencies from inquiring about or requiring the disclosure of an employment applicant’s criminal record or criminal history at the application stage, i.e., until the employer or employment agency has determined the applicant is qualified for the position and notified the applicant that he or she has been selected for an interview or, if there is not an interview, until after a conditional offer of employment is made to the applicant.

The Act defines an employer as any person or private entity that has 15 or more employees in the current or preceding year and employment agencies as any person or entity regularly undertaking, with or without compensation, to procure employees for an employer or to procure for employees opportunities to work for an employer.

The prohibition on inquiring into an applicant’s criminal record or criminal history at the application stage does not apply for positions where: (i) employers are required to exclude applicants with certain criminal convictions from employment due to federal or state law; (ii) a standard fidelity bond or an equivalent bond is required and an applicant’s conviction of one or more specified criminal offenses would disqualify the applicant from obtaining a bond; or (iii) employers employ individuals licensed under the Emergency Medical Services Systems Act.

Employers and employment agencies are allowed to notify applicants in writing of the specific offenses that will disqualify an applicant from employment in a particular position due to federal or state law, or the employer’s policy. Therefore, if an employer has a company policy which would disqualify an applicant from being hired based on specific offenses, the employer may notify applicants in writing of that fact.

Civil penalties that apply to employers or employment agencies that violate the Act range from a warning for the first violation to a civil penalty of up to $1,500 for every 30 days that passes without the employer’s or employment agency’s compliance with the Act.

In addition to the new rules under the Act, the ban against employers and employment agencies inquiring into or using an arrest record or expunged criminal history as a basis to refuse to hire remains in effect.

To review your business’ employment application and procedures or to review your business’ policies regarding specific offenses which may disqualify an applicant, or develop a notice letter to potential employees, please contact:

Morris R. Saunders at:

(312) 368-0100 / msaunders@lgattorneys.com

or

Mitchell S. Chaban at:

(312) 368-0100 / mchaban@lgattorneys.com

Alert to Property Owners: What the Firearm Concealed Carry Act Means to You.

The Firearm Concealed Carry Act became effective on July 9, 2013, and applications for concealed carry licenses became available to Illinois residents in early 2014.

What does this mean for property owners? Generally, an owner of private property may prohibit the carrying of concealed firearms on the property under his or her control, but must do so in compliance with the Firearm Concealed Carry Act.

However, the Firearm Concealed Carry Act allows holders of concealed carry licenses to keep a firearm, subject to certain requirements, in their vehicle, even if their vehicle is located in a parking area of a prohibited location.

To determine whether you are in compliance with the Firearm Concealed Carry Act’s procedures and requirements, or to review your employee handbooks and policies generally, please contact:

Mitchell S. Chaban at:

(312) 368-0100 / mchaban@lgattorneys.com

Important Notice to Privately Held Corporations: Compliance with Corporate Formalities Helps Stave Off Personal Liability

Many believe that by incorporating their business, they are shielding themselves from personal liability.

However, to avoid personal liability for the business’s actions, the business must have a separate identity apart from its shareholders, officers, directors, and employees. Strictly following corporate formalities, such as maintaining annual consents, maintaining corporate records, and meeting additional requirements can help maintain protection from liability.

The Illinois Appellate Court, in Buckley v. Abuzir, 2014 IL App (1st) 130469 (2014), recently held that while traditionally shareholders, officers, directors, employees, may be held liable if the business’s corporate formalities and additional procedures are not followed, now, even certain third parties, may face liability if such third parties exercise certain amounts of control over the business.

At a minimum, a corporation must have adequate capitalization, issue stock, observe corporate formalities, maintain corporate records, not commingle funds, not divert corporate funds from the business, and maintain arm’s-length relationships among related entities.

To protect shareholders, officers, directors, employees and now certain third parties from personal liability, business owners should review their books and records. If you have any questions regarding corporate law or business law matters, please contact:

Morris R. Saunders at:

(312) 368-0100 / msaunders@lgattorneys.com

testimonials

"We've worked with Levin Ginsburg since the 1980s...we have grown with them and have a very high level of comfort and confidence with this firm." Jay Nichols, President,
Badger Murphy
"Astute, responsive and practical. Those are three reasons why we work with Levin Ginsburg." Bryan L. Oyster, V.P. and General Manager,
Bentley Forbes