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Current Issue - June 2004

Nonprofit Organizations and “Branding”
Tips for the Selection, Use, and Protection of Trademarks

Prepared for Community Legal Resources by Susan M. Kornfield of Bodman, Longley & Dahling LLP  

This article discusses the opportunity for nonprofit organizations to select, federally register, and develop a strong brand or “trademark.” A trademark is a word, logo, or slogan that identifies the goods or services provided by an organization and distinguishes them from the goods and services of others.

Examples of nonprofit organizations that have taken steps to federally register and protect their name or logo include:

• American Red Cross: Reg. No. 2,740,130 for “Blood banks, collection and preservation of human blood,” owned by The American National Red Cross.
• : Reg. No. 2,771,239, for “Blood banks, collection and preservation of human blood,” owned by The American National Red Cross.
• ACORN: Reg. No. 2,356,992, for “non-profit association of community organizations the membership of which is comprised of persons in the community who are in the low to moderate income range,” owned by the Association of Community Organizations for Reform.
• PROJECT HOPE: Reg. No. 757,511, for “Health and medical services provided without charge to people of other countries on and from a floating hospital, and through a clinic and medical teaching center,” owned by Project Hope-The-People-To-People Health Foundation, Inc.

Conducting Trademark Searches

It often comes as a surprise to organizations that the selection of an organization name is not just a matter for the secretary of state of their state of incorporation. Even if an organization’s name is “cleared” by the secretary of state, the fact is that the name cannot be used if it is likely to cause confusion with a name that is registered with the U.S. Patent and Trademark Office (PTO).

It is relatively easy to run what is called a “knockout” search of the records of the PTO and to search for marks that are identical with the name your organization is using (and would like to register) or is considering adopting as its new name. It is also relatively easy to run a search for marks that are similar, but not identical, to the mark your organization is considering. The PTO provides a search mechanism on its web site at www.uspto.gov.

We also recommend that organizations run searches of the proposed names on the World Wide Web to see who else is using the name (for similar or for unrelated goods and services) and that organizations check if the name appears available for a domain name, check the state trademark registration database, and check the county clerk’s database of d/b/a (doing business as) registrations.  

Benefits of Federal Trademark Registration

There are many benefits to federal trademark registration. The cost is relatively inexpensive in light of these benefits (filing fees with the PTO are currently $335 per mark per classification of goods/services, plus legal fees). The benefits of trademark registration include:

• Prima facie evidence of exclusive ownership of the mark, and of the organization’s exclusive right to use it in connection with the goods or services identified in the registration.
• Greater ability to exclude others from using confusingly similar marks.
• Constructive notice to the rest of the organizations and individuals in the United States of the claim of ownership.
• Stronger legal position in the event of a trademark dispute.
• Increased value of the asset in the event the organization wishes to license others to use the mark, or if the organization wishes to sell the trademark registration.
• Use of the registration as collateral for a loan.
• Better protection of a domain name.
• Ability to renew the federal registration of the mark in perpetuity, so long as the mark continues to be used.
• Increased ability to expand the mark to related goods and services, and to register the mark for those new goods and services.

Even without federal registration, an organization that is the “first to use” a mark in a geographic area may likely have “common law” trademark rights. The scope of those rights may be limited by geography, trade channels, and product lines, but may still constitute a valuable right that cannot be defeated by another party whose use and registration of a similar mark is subsequent to the use of that first party.

There are tremendous benefits to be derived from taking action to protect your “commercial magnets” – your psychological symbols. If done properly, you can create assets, enhance the value of your organization, strengthen marketing opportunities, increase recognition and goodwill within your target audience, and minimize the risk associated with the improper selection and use of trademarks.

Susan Kornfield is Chair of Intellectual Property Practice Group at Bodman, Longley & Dahling LLP. She can be reached by telephone at 734/930-2488 or email at
skornfield@bodmanlongley.com

For more extensive information regarding trademarks or for assistance with this or other legal issues, please visit www.clronline.org or contact Community Legal Resources at 313/964-4130.

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