Author: Onsager Law Office

What is a trademark or a service mark?

A trademark distinguishes the goods of one business from those of others.  A trademark may consist of a word, phrase, symbol, or design, or some combination of these elements.  Trademarks typically take the form of brand names and logos that are used on goods.  A service mark is like a trademark, except that it distinguishes the services (instead of the goods) of one business from those of others.  It should be noted that domain names and business names, without more, are not necessarily trademarks.   You should not assume that you have trademark rights simply because you have registered a domain name or business name.

What is involved with and how long does the federal trademark application process take?

The federal trademark application process can take a year or more from start to finish.  An examining attorney from the United States Patent and Trademark Office will typically review a filed trademark application three months after the filing date.  The examining attorney will review the application to determine whether the trademark can be registered including a review of the application, the drawing of the trademark, and any submitted specimen showing how the trademark is utilized by the business in commerce.  If the examining attorney issues a letter identifying reasons to reject the application, the applicant (or the applicant’s attorney) has six months to submit a response.  If a response is not filed within the six month timeframe the application will be denied.  (Trademark application fees are nonrefundable and would be forfeited.)  If the examining attorney does not identify any issues associated with the application or if all identified issues have been resolved, the United States Patent and Trademark Office will approve the proposed federal trademark for publication in the Official Gazette.  The applicant is typically notified of the date of publication about three weeks in advance.  After publication of the proposed federal trademark in the Official Gazette, the public has a 30-day period to object to the registration of the proposed federal trademark.  If opposition to the proposed federal trademark is filed, a hearing will be held before the Trademark Trial and Appeal Board.  If an applicant has already submitted a specimen showing how the trademark is utilized in commerce (for example showing the trademark on product packaging) and no opposition was filed by the public to the proposed trademark or the Trademark Trial and Appeal Board side with the applicant, the United States Patent and Trademark Office will proceed to register the trademark.  If the applicant has already submitted a specimen of how the trademark is utilized in commerce, and if no opposition is filed to the application by the public, the United States Patent and Trademark Office will typically issue a registration certificate approximately 11 weeks after publication of the trademark in the Official Gazette.

Should I register my trademark with the United States Patent and Trademark Office?

While a business may gain some state-level rights in a trademark simply through its use of the trademark in its regular business, there are reasons why for some businesses it will be in their best interest to seek additional federal trademark protection, while for other businesses they may either not qualify for a federal trademark or it may not be worth the time and expense to seek federal trademark protection.  What follows are some factors that a business may consider when facing this question:

  1. A trademark is only eligible for federal trademark protection if it is being used (or there are plans to use it) in interstate commerce (i.e., if goods or services are being sold or transported between more than one state or U.S. territory), or if it is being used (or there are plans to use it) for goods or services sold or transported between the United States and a foreign country. If your business’ goods or services do not meet this criteria and your business does not have plans that would involve either interstate or foreign commerce, then the business’ trademark may not be eligible for federal trademark registration and it may not be worth the time and expense to seek federal trademark registration.  If your business is strictly active in one state, you may wish to consider seeking trademark registration in the state in which your business is active.  [Consultation with a local attorney may help you determine the value to your business of a state-based trademark registration.]
  2. Is there a likelihood of confusion between a business’ proposed trademark and a trademark already registered with the United States Patent and Trademark Office? The United States Patent and Trademark Office will not register a trademark if there exists this likelihood of confusion with an existing federal trademark.  [I would recommend consulting with an attorney if you believe your business may face this situation to better understand whether the United States Patent and Trademark Office would be likely to make this finding based on: (a) the current standard that has been developed for a finding of “likelihood of confusion”; and (b) the application of this standard to your specific situation.]
  3. Is the proposed trademark a strong or a weak trademark? The United States Patent and Trademark Office generally breaks trademarks into one of four categories: fanciful or arbitrary, suggestive, descriptive, or generic.  [This is again an issue where I would recommend consulting with an attorney.  It can be particularly valuable to consult legal counsel when initially developing a trademark.  A strong trademark will be easier to protect in court and will likely face fewer issues when seeking federal trademark registration.]
  4. A federal trademark registration creates a legal presumption (if your business ever needs to go to court to protect its trademark) of your business’ ownership of the trademark and its exclusive right to use the trademark nationwide related to the goods and/or services for which the trademark was granted.
  5. Registration of a trademark with the United States Patent and Trademark Office provides public notice of your ownership of the trademark through the Trademark Electronic Search System maintained by the Trademark Office.
  6. A business may record its federal trademark registration with the U.S. Customs and Border Protection in order to preclude the importation of foreign products that violate the trademark.
  7. A federal trademark registration can serve as the basis to register the trademark in foreign countries in which your company does business.
  8. A federal trademark registration permits your business to bring a court action in federal court regarding enforcement of your trademark rights.
  9. Finally, a federal trademark registration permits your business to thereafter use the federal trademark registration symbol ®.

Should I do a federal trademark search?

Yes.  Before going through the time and expense of applying for a federal trademark registration, and before prematurely settling your business on a particular trademark, I highly recommend a meaningful trademark search of current and pending trademarks with the United States Patent and Trademark Office, use of comparable trademarks on the Internet, and a search of state trademark and business registrations in order to determine: (a) whether another business is already utilizing the proposed trademark; (b) whether another trademark exists that, while not identical, would preclude the registration of the proposed trademark as the proposed trademark would create a “likelihood of confusion” with the existing trademark; and (c) the strength of the proposed trademark (from a legal enforceability standpoint) after researching the utilization of other trademarks and business names for the good or service for which the trademark would be utilized.  If such issues are unearthed during a trademark search, your business may be able to modify the proposed trademark to strengthen the trademark, address these issues, and increase the likelihood that your resulting federal trademark application will be approved.  Given the scope of commerce in America today, it is impossible to guarantee that all possible trademark issues may be identified in a thorough trademark search.  However, a thorough trademark search can identify many issues that would otherwise be missed and contribute to a better educated decision as to whether and how to proceed with a trademark registration before the United States Patent and Trademark Office.

Will a court uphold a noncompete agreement in Wisconsin?

A Wisconsin court will only enforce a noncompete agreement or provision if it:

(1) is reasonably necessary for the protection of legitimate interests of the employer as recognized by the courts;

(2) has a reasonable time restriction;

(3) has a reasonable geographic or activities restriction;

(4) does not preclude the employee from earning a living; and

(5) is not contrary to public policy, including unnecessarily impeding the mobility of workers or depriving a community of a needed service.

If a Wisconsin court finds that a noncompete provision imposes an unreasonable restraint on trade, the entire provision will be found to be illegal, void and unenforceable even as to parts of the provision that standing alone would be reasonable if the court finds the provision indivisible.

What happens if a Wisconsin noncompete agreement with an employee is impermissibly broad?

When considering a noncompete agreement it is important to remember that such agreements are carefully scrutinized by Wisconsin courts.  Wisconsin law favors the unrestricted movement of workers and views critically contractual restraints on trade.

Wisconsin courts have nonetheless recognized that employers have legitimate interests that may be protected by a noncompete agreement provided that the noncompete agreement is narrowly drafted to protect those interests.  A protectable interest of employers includes company goodwill where customers may associate the company’s hard-earned goodwill more with the employee than with the employer.  Another protectable interest of employers is when employees have access to confidential information that may be critical to the ongoing success of the company, including the identity and non-public information of clients and potential clients interested in the company’s goods or services, sales strategies, and pricing.

However, Wisconsin law provides for a severe sanction for noncompete provisions that are not narrowly crafted to protect an employer’s legitimate interests.  If a Wisconsin court finds that a noncompete provision imposes an unreasonable restraint on trade, the entire provision will be found to be illegal, void and unenforceable even as to parts of the provision that standing alone would be reasonable if the court finds that the provision is indivisble.

As a result, it is important to proceed with care when drafting noncompete agreements in Wisconsin.

[Legal advice not only involves an understanding of the law, but the application of the law to a particular set of circumstances or facts.  Blog posts are imperfect tools to address the subtlety and exceptions of the law that may apply in particular situations.  As a result, the information in this blog post does not represent legal advice.  If you are in a situation where you need or desire legal advice, we would be happy to help.  Call Paul at 608-358-9413 to set-up your no-charge initial consultation.]

Do I need an operating agreement for my business entity?

It can be tempting to avoid the work of developing an operating agreement with your other contemplated business partners and “just get started.”  However, a lot of future conflicts can be avoided and the foundation for a long and successful partnership can be laid if business partners have the foresight to work through issues upfront.  How much should each partner contribute in the way of capital and services?  What will be the initial capital needs of the company?  What are the specific services that a partner will be required to contribute on a one-time and on an ongoing basis?  What are the remedies for the other partners if a partner defaults on providing the capital or services he or she promised?  What are the rights or obligations of partners to buyout the interests of a departing partner?  How will the purchase price of a departing partner’s interest be determined?  What rights does a departing partner have to sell his or her business interest to a non-partner or to pass his or her interest on to his or her heirs?  Will a business partner be subject to a noncompete agreement if he or she leaves?  What rights does a departing business partner have to the company’s intellectual property after he or she leaves?  Can all business partners bind the company or will day-to-day management of the company be delegated to one partner or a subset of partners?  What level of profits will each partner receive in return for his or her contribution of capital and services?  What happens if the company runs short of money?  Can partners require each other to make additional capital contributions to the company to give the company a chance to succeed if the company runs short of cash?  What rights do the partners have to a return of capital if a partner departs the company or the company dissolves?  What are the various default provisions that govern the operation of the type of business entity that has been selected (for example corporation, limited liability company or limited liability partnership)?  Will these default provisions work well for your business venture or do they need to be modified?  The operating agreement is the mechanism by which you and your business partners can change the application of these default rules to your business and address the other issues identified above.

How to form a Wisconsin business or nonprofit entity

How can I form a business corporation, a limited liability company, or a nonstock, not-for-profit corporation in Wisconsin?  How can I form a limited partnership or a limited liability partnership under Wisconsin law?  Can I just form my business entity and forget it?

There has been an ongoing expansion in the law over time as to the types of business and nonprofit entities that may be formed.  In order to provide flexibility as to how these organizations are formed and operate, the statutes are filled with default rules that often may be modified to address your situation and your particular needs.  However, the law governing these different entity types varies, and depending on your situation and your goals one may be a better fit than another.  The goals in entity formation include: (a) identifying the entity type that is the right fit for your situation and goals: (b) modifying the default rules to address your formation and organizational needs; (c) addressing the rights and responsibilities of the various entity stakeholders, including owners and key employees; (d) developing organizational procedures and processes to address and resolve disputes between owners and leaders in the entity; (e) defining rights and processes to provide for the orderly sale and transfer of ownership interests (this is particularly important with small businesses as the most important market for small business ownership interests are often the co-owners of the business); and (f) addressing tax issues that may be affected by your entity selection.

Articles of Incorporation or Organization may be filed for a business corporation, a limited liability company, or a nonstock, not-for-profit corporation with the Wisconsin Department of Financial Institutions.  Likewise, a certificate of domestic limited partnership or the registration of a limited liability partnership may be filed with the Wisconsin Department of Financial Institutions.   What staff at the Wisconsin Department of Financial Institutions cannot do is to provide you legal advice to assist you in working through the issues identified above.

When do I need an estate plan?

You may need an estate plan if you:

  1. want to distribute your money subject to probate (subject to your will) in a way that varies from what the county circuit court would do under Wisconsin statute;
  2. plan to place restrictions on how and under what circumstances your heirs can utilize your money when you die (parents often place restrictions on how and under what circumstances their child(ren) will receive their inheritance);
  3. wish to coordinate the distribution of various types of assets to beneficiaries (such as the net value of a home, bank accounts, investment accounts, retirement accounts and life insurance policies) so that there are no unintended outcomes in terms of how much is received by each beneficiary and ensuring that any conditional gifts are, in fact, given as conditional gifts (for example, limiting the age at which money will be received outright or limiting the circumstances under which money can be utilized for a particular beneficiary);
  4. desire to have a voice in who will serve as the guardian of your minor child(ren);
  5. wish to address estate and income tax issues to maximize the funds that can be provided to your beneficiaries;
  6. need to plan for the sale or transfer of a small business or small business interest on retirement or death;
  7. wish to provide for the management of your money during any period of incapacity;
  8. desire to specify who would make healthcare decisions on your behalf and the circumstances under which you would want healthcare provided or withdrawn during any period of personal incapacity;
  9. wish to provide for a partial distribution of your money and property to charities or individuals other than family;
  10. wish to select a default beneficiary who would inherit your money and property if your immediate and extended family members predeceased you (under Wisconsin statute the final default beneficiary is the state of Wisconsin school fund);
  11. desire to provide for the specific distribution of certain sentimental or cherished belongings to family members, other individuals or charities who would otherwise not receive them under the default statutory provisions administered by the county circuit court;
  12. wish to specify who will serve as trustee for any trust created for the benefit of your child(ren) or grandchild(ren) (a trust can permit you to place restrictions on how and under what circumstances a child(ren) will have access to funds placed in trust);
  13. desire to designate who will oversee the payment of final expenses and the distribution of your money (if this is not done under your will, trust or marital property agreement, the county circuit court will do so on your behalf in a probate action after your death); and
  14. wish to avoid the costs and administration of having a court probate your estate (money and property) after your death.

[This list is not intended to be exhaustive, but rather is intended to serve as a starting point for you to consider whether you may or may not be in need of a new or updated estate plan.]