Your company plans to introduce an exciting new product and market it as the environmentally friendly alternative to the current market leader. Marketing wants to brand the product with an "Eco-Conscious Term" such as "green" or "eco," but the legal department objects vehemently.
To Marketing, those words send the message that the new product is good for the environment. What is legal's problem? Why can't the lawyers see the great value in this front-of-the-curve branding?
A short history lesson provides the answer. During the Internet boom at the turn of the millennium, companies flooded the marketplace and the United States Patent and Trademark Office (PTO) with brands using terms such as "e," "i," ".com," and "net," very often combined with generic terms such as "travel," "business," etc.
Literally thousands of applications for these marks passed through the PTO. In 1999, nearly 5% of all new trademark applications contained ".com." Filings for e-marks and i-marks—those that affix the prefix e- or i- to terms—increased from 1,000 in 1998 to 5,000 in 1999 and 1,000 in 1998 to 2,000 in 1999, respectively.
Showing an initial resistance to registering these marks, the PTO declared that the dot-com suffix would be interpreted the same as "Inc." and other corporate descriptions. Namely, the suffix would be deemed non-distinctive and disregarded as a protectable part of the trademark.
Almost immediately the terms, all of which conveyed that the product or service was internet-related, were considered "merely descriptive" and incapable of functioning as trademarks.
To be a trademark, the primary significance of the term must be as an indication of source, not as a descriptor of an attribute of the product or service to which it is applied. With the benefit of nearly ten years of hindsight, we now know that nearly all of the most famous Internet brands, brands such as GOOGLE, YAHOO and AMAZON share none of those terms.
Now history seemingly wants to repeat itself. Trademark applications related to Eco-Conscious Terms reached record highs in 2007. The word "green" was part of over 2,400 applications, doubling the figure of 1,100 from 2006. In fact, applications to register marks with the word "green" have been on the rise for the past three years, outpacing the overall increase in trademark applications as a whole.
The flood of applications to register "green" marks became so heavy that now duplicitous filings are common. For example, the phrase GO GREEN appeared in approximately 78 different applications filed in 2007 alone.
Applications to register other Eco-Conscious Terms also exploded in number. The words CLEAN and ECO closely trail the popularity of GREEN. Trademark applications using CLEAN rose to over 900, up from approximately 800 in 2006. Likewise, applications using ECO doubled in 2007, totaling nearly 900 applications.
The use of these Eco-Conscious Terms is now so prevalent that it is almost inevitable that the PTO will object in some manner to an application containing such a term on the grounds that it is merely descriptive and does not serve to identify the source of a product or service. And therein lies the root of the legal team's objection.
Trademark law affords different levels of protection depending on the strength of your mark. In this context, "strength" relates to the amount of legal protection likely to be accorded a mark. The inherent strength of a trademark depends on where it falls on the "Trademark Spectrum," a system of five categories: Fanciful, Arbitrary, Suggestive, Descriptive, and Generic.
Fanciful marks are made-up terms such as KODAK and EXXON, and arbitrary marks are existing words or images used in association with products for which they have no meaning, such as APPLE® for computers and CAMEL for cigarettes. Typically, fanciful and arbitrary marks are the strongest trademarks and receive the widest scope of legal protection.
The third category of marks, suggestive marks, includes terms that do not immediately convey information about the product or service. Instead, the customer must engage in a multistep reasoning process to discern the significance of the mark as applied to the goods or services.
Examples of well-known suggestive marks include COPPERTONE and LONDON FOG. The law treats trademarks that fall within any of these three categories as legally protected immediately upon adoption of the mark and its use in commerce. In other words, you have legal rights in such marks from Day One, without the need to take any additional action.
Those marks that fall into the fourth category, descriptive marks, are treated much differently. A mark is descriptive if it immediately conveys information about the goods or services with which the mark is used, without the need to engage in the type of reasoning process discussed in connection with suggestive marks.
Examples of descriptive marks include SPORTS ILLUSTRATED and BEER NUTS. Descriptive trademarks do not receive legal protection unless and until the owner can prove that the primary function of the mark is to identify the source of the product or service on which it is used rather than to describe a function, feature, ingredient, attribute, etc. of that product or service.
This concept, commonly called "secondary meaning" or "acquired distinctiveness," may be proven with evidence of substantial sales and advertising or other evidence that the mark does, in fact, function as a trademark.
Under the Lanham Act, the federal trademark law, a mark is presumed to have acquired secondary meaning after five years of substantially exclusive and continuous use. Before a mark acquires secondary meaning, it may be adopted and used by others without concern that the first user will institute legal proceedings to stop such use.
The fifth and final category, the "Generic" category, covers words that are the common term for a particular item, attribute, etc. Generic terms are incapable of becoming trademarks, regardless of how much is spent on advertising and promotion.
Furthermore, if you fail to police your own mark and it evolves into the common descriptive term for products of your type (think "Elevator" or "Aspirin," which were both trademarks at one time) you will lose your legal rights in the mark.
Much like the Internet marks, the Eco-Conscious Terms quickly evolved into descriptive terms when used in association with products and services intended for use in connection with clean energy and other environmentally friendly products and services.
Thus, adopting an Eco-Conscious Term as all or part of a trademark is a surefire recipe for legal problems. The mark may be very difficult to register, especially if it comprises a combination of the Eco-Conscious Term with another word with descriptive significance when used with your product or service. If you are unable to register you trademark, it may limit its value as a branding tool.
Even if you succeed in registering the mark, the multitude of marks that incorporate identical Eco-Conscious Terms may limit your rights and prevent you from taking legal action against a competitor unless the other mark is very close to yours and used in connection with closely competing products or services.
The inability to control such third-party uses will dilute your brand and make it far more difficult to differentiate your products from others available to the same consumers.
Given that consumers are willing to pay more for green alternatives, what options are available to companies wishing to identify themselves as environmentally friendly?
It may be possible to circumvent this problem by combining the Eco-Conscious Term with another word that is more fanciful, arbitrary, or suggestive when applied to your product or service. Still, such a mark will not give you any legal rights in the Eco-Conscious Term itself, leaving it available for adoption and use by a competitor in the context of its own mark.
Adopting an Eco-Conscious Term may also have implications beyond registration difficulties and lack of uniqueness. "Green washing," a term that came into existence in the early 1990s, has adopted a variety of related meanings, but has, for example, has been defined as "disinformation disseminated by an organization so as to present an environmentally responsible public image."
With the proliferation of Eco-Conscious Terms in product branding, consumers now question the credibility of goods and services self-branded as "green."
For example, the consumer-advice website, ecolabelling.org, now reviews the credibility behind such labeling for individual products. Similarly, greenerchoices.org, offers a searchable database for consumers to "know which claims you can trust and which ones you can't."
Unlike Internet-related trademarks, adopting Eco-Conscious Terms could obligate a business to defend the use of the term and account to its consumers for the product claims inherent in such a designation.
Some foreign governments already police the use of such terms. For example, Australia monitors Eco-Conscious marks through the Government Department of Climate Change. Eligibility for marks depends upon passing a rigorous verification and certification process. Recently, the High Court of Australia appeared to reaffirm its commitment to quelling greenwashing in a case between BP and Woolworths.
In refusing to give leave to appeal a decision rejecting BP's trademark application for the color green in association with service stations, Justice Gummow stated, "[I]t [the color] might be inherently adapted to mislead, might it not? ... What is nature [sic] and healthy about the production or consumption of petroleum products?"
So the legal concerns are real—from the problems likely to arise when registering and protecting brands incorporating Eco-Conscious Terms, to the uncertain global regulatory environment.
While use of an Eco-Conscious Term may be right for your company, smart marketers will also consider these issues when deciding how to brand a new environmentally friendly product. After all, it ain't easy being green.