Nonprofits regularly use logos, taglines, and other descriptions for their organizational activities. To what extent may nonprofits trademark such information, along with their corporate name? Just exactly what is a trademark, and why is it important – particularly for legal protection? This article explains trademarks generally, identifies different types of trademarks, explains the legal significance of such differences, and provides accompanying recommendations for optimal trademark protection.
Overview of Trademark Law
The term “trademark” under U.S. law includes any word, name, symbol, or design, or any combination thereof used in commerce to identify and distinguish goods from those manufactured or sold by others and to indicate the source of the goods. Famous trademark names include GOOGLE, MCDONALDS, and COCA-COLA. These and many other marks have federal protection under the Trademark Act of 1946 (a/k/a Lanham Act) against those attempting to use similar marks.
The Lanham Act established a national system of trademark registration, which is administered by the United States Patent and Trademark Office (USPTO). A nonprofit organization may register a trademark to identify goods, or a service mark to identify services (commonly referred to jointly as a “trademark”). Registration provides benefits such as having the trademark entered into the USPTO database, receiving a legal presumption of ownership, and the right to bring a lawsuit concerning the mark in federal court.
Selecting a Strong and Distinct Mark
If a nonprofit organization wants to register a name, logo, or tagline as a trademark with the USPTO, multiple aspects should be considered - particularly the mark itself. Marks that quickly and clearly identify the source of specific goods or services with the registering nonprofit possess inherent distinctiveness. This means that the mark is strong and will likely be approved by the USPTO, but developing a strong mark can be difficult and having some understanding on the topic is important.
Nonprofit organizations that want to develop a trademark often consider promotional aspects such as visual aesthetics, memorability, and clarity, which are very important for donor-based entities. The legal consideration of distinctiveness, however, should also be discussed in the development stage. The added factor does not necessarily work against promotional creativity and can actually enhance a nonprofit’s brand by helping the organization create a unique and distinct trademark.
Spectrum of Distinctiveness - An Overview
The term “distinctiveness” is defined as the “[a]bility of a designation to be a trademark that identifies and distinguishes a single source of goods or services.” This definition is somewhat vague. The concept has thus been clarified using the following terms of art: fanciful, arbitrary, suggestive, descriptive, and generic. These terms are each addressed further below, but an important preliminary way to understand “distinctiveness” is to view the terms as a continuum.
On the “most distinct” end are fanciful trademarks that easily identify and distinguish a nonprofit’s goods or services from other entities. On the other end are generic marks that easily confuse a nonprofit’s goods or services with other entities. Trademarks that are arbitrary, suggestive, and generic fill in the continuum’s middle. Nonprofits that have fanciful, arbitrary, or suggestive marks will likely obtain registration, but marks that are descriptive or generic will not. The most contentious portion of the continuum that nonprofits should avoid is descriptive marks.
Descriptive marks describe an ingredient, quality, characteristic, function, feature, purpose, or use of an organization’s specified goods or services. Also, they immediately convey knowledge of a quality, feature, function, or characteristic of the goods or services. The determination of whether a mark is descriptive must be made in the actual context in which the mark is used or intended to be used, in connection with the goods and services provided by the nonprofit and the possible significance that the mark would have on the average consumer.
With these limitations in mind, nonprofits should consider its goods and services when developing a trademark and how consumers will actually be impacted by the mark itself. A common error made by nonprofits is believing that using a mark that describes its goods or services is beneficial. For instance, a homeless shelter that tries to register the trademark HELPING HOUSE for housing assistance will likely be denied by the USPTO for being descriptive. The term HOUSE indicates the actual purpose for the nonprofit’s services, and it would convey knowledge of the service’s function.
A problematic sub-category of descriptive trademarks are geographically descriptive marks, which the Lanham Act specifically disallows for trademark protection. Phrases that fit with such sub-category contain the followin qualities: (1) their primary significance is the name of a place generally known to the public; (2) the services or goods involved originate from that place; and (3) the public would reasonably associate the services or goods involved as originating from such place. For example, the phrase NEW ORLEANS POINT for a New Orleans jazz store is geographically descriptive because (1) New Orleans is generally known to the public, (2) the goods or services actually originate from there, and (2) the public would reasonably associate the goods or services with New Orleans. To avoid having a trademark denied based on such geographic descriptiveness, nonprofits thus should use words that have little connection with the offered goods or services, such as fanciful marks.
Fanciful marks are terms that have been created for the sole purpose of functioning as a trademark. They constitute words that are either unknown in the language or are entirely out of common usage. As such, fanciful marks are usually the strongest types of trademarks and are inherently distinct, which means that the USPTO will likely approve their registration. Examples of famous fanciful marks include PEPSI, KODAK, and EXXON.
To develop a fanciful mark, nonprofits should be creative and think outside of the box to ensure that the mark is approved by the USPTO. For instance, registering SUPERCALIFRAGILISTICEXPI-ALIDOCIOUS as a trademark for homeless shelter services would likely be fanciful because the mark is entirely out of common usage. However, the Mary Poppins’ films may have made the term more common, which is something nonprofits must consider – trademarks that become common can lose their distinctiveness, so marks should be monitored for infringements to avoid this.
While fanciful marks are the strongest, they are not the only types of marks eligible for trademark protection. Arbitrary marks are another category that are considered inherently distinct by the USPTO. These marks constitute words that are common, but when used to identify particular goods or services, the mark does not suggest or describe a significant ingredient, quality, or characteristic of the goods or services. For instance, the Mary Poppins example above could still be used for homeless shelter services by a nonprofit even if it is considered common because the mark is wholly unrelated to the services.
Another way of defining an arbitrary mark is “a known word used in an unexpected or uncommon way.” Familiar examples would be APPLE for computers and OLD CROW for whiskey. Nonprofits may consider arbitrary marks to be counterproductive because donors would not easily associate the mark with their organization. However, developing an arbitrary mark provides long-term trademark protection and will help the organization to be distinct from other nonprofits.
If a nonprofit wants a trademark that is somewhat associated with its goods or services while still being distinct enough for trademark protection, it should consider a suggestive mark. A mark is suggestive when, as applied to the goods or services at issue, it requires imagination, thought, or perception to reach a conclusion as to the nature of those goods or services. In essence, if a logical step must occur to connect the mark with the goods and service, then the trademark is likely suggestive.
An example of a suggestive mark would be COPPERTONE for suntan lotion, which hints at the nature or some aspect of the good but does not clearly describe it. Another would be the mark NOBURST for liquid antifreeze and rust inhibitor for hot-water-heating systems. The difficulties in developing a suggestive mark are twofold. First, the line between a suggestive mark and a descriptive mark is often narrow and difficult to identify. Thus, what a nonprofit may believe is suggestive, may be viewed by the USPTO’s examining attorneys as descriptive. Second, a good suggestive mark is often identified by more than one nonprofit organization creating a greater likelihood for consumer confusion and potential legal disputes, which are very costly. If a nonprofit has done significant due diligence to ensure that there are no other prior users, adopting a suggestive mark and securing trademark protection could be a great option.
Generic terms are those that the relevant consumer understands primarily as the common or class name for the goods or services provided by the nonprofit. It is "the ultimate in descriptiveness." In essence, a generic term cannot identify a unique source and as such cannot be a trademark. An example of a generic term would be MATTRESS.COM to identify online retail store services dealing with mattresses and other similar items. Using the example from earlier, registering HOMELESS SHELTER for a nonprofit homeless shelter would also likely be considered generic. As such, nonprofits should avoid generic marks when developing a trademark.
Lastly, nonprofits may attempt to register a mark that is not distinct but that they believe will become distinct through promotional activity. This process is possible but should only be done after weighing the legal, financial, and practical considerations, and in general, we recommend that any nonprofit wanting to register a trademark through this process or generally should seek the advice of competent legal counsel.
In conclusion, what constitutes a strong trademark for legal purposes? Distinct marks that are fanciful, arbitrary, or suggestive – all excellent! What constitutes a legally weak trademark? Marks that are descriptive or generic – not so good, at least for trademark protection. Nonprofits typically want trademarks that make their organizations distinguishable from other entities if trademark protection is desired. Creating a distinct mark helps to achieve this goal.
 15 U.S.C.S. § 1127.
 A legal distinction exists between the terms “Trademark” and “Service Mark,” but both terms can be grouped within the moniker “Trademark” as used in this article.
 USPTO, "Strong Trademarks." For our law firm’s related article on trademark protection for corporate names, please see "What's in a Nonprofit Name? Trademark Protection and More."
 TMEP 1209.01(b) (Oct. 2018 ed.).
 See id.
 15 U.S.C.S. § 1052(2)(e)(2)
 TMEP 1209.01(a) (Oct. 2018 ed.).
 Please note that this example is solely for educational purposes and does not constitute legal advice concerning whether this name would be useful as a trademark.
 TMEP 1209.01(c) (Oct. 2018 ed.).
 Id. (H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., 782 F.2d 987, 989, 228 USPQ 528, 530 (Fed. Cir. 1986)).
 TMEP 1209.01(c) (Oct. 2018 ed.).