This is part 3 of our five part series on Starting a Record Label. In our previous posts, we introduced the idea of starting a record label – to begin thinking about what it means to run a record label from a business perspective (Part 1 of 5) and discussed the steps you need to take in forming a business entity (Part 2 of 5).
In this part of Starting a Record Label, we will discuss the importance of protecting your brand name through a federal trademark and the steps you need to take to ensure that your name will be approved for registration with the United States Patent & Trademark Office.
Interscope Records. Sony Music. Def Jam Recordings. These are just of few of the more recognizable record label names in the United States. When you think of a particular record label, you immediately conjure up the image of artists that are signed to that label. A record label name is more than just a name. It identifies a genre. Image. Quality. Success. At its heart, it is simply a source identifier… but, the law can work against you in using that name; or worse, make you change the name after investing hours of time and thousands of dollars in developing your record labels name.
Aspiring record label entrepreneur. Meet the realities of trademark law.
In part 2 of Starting a Record Label, we introduced the importance of researching potential business names before selecting one to serve as your record label brand. If you believe in your business, you MUST take the steps necessary to register your record label name as a federal trademark too.
Why? Here are two common reasons:
1. You form your business entity under XYZ name. You attempt to file a trademark but are denied by the USPTO because the same or similar name is already registered as a federal trademark. Even though you already created a business, you can’t use your name. What do you do?
2. You form your business entity under XYZ name. You fail to file an application with the USPTO simultaneously with filing your business name with the state. In the meantime, another record label in another state begins operating under the same or similar name as you selected. You then file for and obtain a federal trademark, only to learn that your national protection isn’t actually national. You will be prevented from using your name in the location(s) where the other record label has established rights. Try promoting your record label and distributing music throughout the United States while excluding the region where you are prohibited from entering. Good luck!
Bottom Line: Take the time and spend a relatively small amount of money now to file your record label name as a federal trademark. Though there is plenty of literature and how-to books available, we highly recommend you hire a trademark lawyer to get it right for you the first time. You may feel confident in filing the initial application, but how well will you do when the Trademark Examiner preliminarily denies your application on technical grounds?
Legal fees vary, but expect to pay $1000-$2500 for a lawyer, plus the trademark application filing fee ($325.00 per class). In return, you should expect the following:
1. Initial Consultation – Selecting A Name: As was discussed in part 2 of this article, you should select 3-5 potential names for your company. Your attorney will perform a preliminary search of those names to determine which one or two names appear most likely to be approved for trademark registration.
2. Perform a Comprehensive Name Search: Ask your trademark lawyer whether the search and analysis is included in the fee, as this crucial step in the trademark procees may or may not be. The purpose of the comprehensive search is to locate any and all uses of your proposed name or similar names throughout the United States. The search will include trademark registrations and those that are pending review, as well as state trademark filings, and the numerous uses that comprise common law uses. This search is crucial because, though you may obtain a federal registration of your name, other uses of the same or similar name may trump your use in certain regions of the country (as exemplified above). Your trademark lawyer will review these search results (often times, exceeding 500 pages) and provide you an anaylsis to assist in moving forward.
3. File Your Application – Actual Use OR Intent-To-Use: Once a name has been selected, you can proceed with an application. Determining which application to file will depend on whether you are currently using the mark in interstate commerce (a requirement for obtaining a federal registration) or intend to use the mark in interstate commerce sometime in the future. Depending on your current state of use, you will have to determine which application is most appropriate – and you will have to ensure that you can provide the USPTO with an adequate specimen for proving actual use. If you file an ITU application, you will have six (6) months from the date of approval to file satisfactory evidence of actual use.
4. File Your Application – Determine Class Filings: Depending on the types of goods/services you will be providing, you may need to file more than one trademark application. There are 45 classes to choose from, and if your uses fall under more than one class, you will need to file in each class to ensure that your name extends to those uses. This is an important component to the trademark application process.
5. File Your Application – Drafting A Class Description: One of the single most important aspects of filing your application is to draft a strong class description. A class description can make or break your application. The goal is to draft your class description as broad as possible without making it vague or describing your goods/services in a way that disqualifies it for trademark protection (falling below the threshold for distintiveness).
6. Properly Correspond with the Trademark Examiner: There is a strong likelihood that sometime during the application process you will be contacted by the Trademark Examiner. And if you review trademark applications in the record that have since been abondoned, you will notice that many of them were abondoned after the Trademark Examiner issued a non-final judgement against the application. Translation = Do it right the first time, or ensure that your trademark lawyer’s services include some communications with the USPTO. If you file your trademark on your own, but then need an attorney to answer an Office Action, it will likely cost you more than had you hired a trademark lawyer in the first instance.
The author of this article is mindful of the numerous suggestions for you to hire a trademark lawyer (as he is a trademark attorney too). But there are too many examples of DIY trademark filings that never succeed to not suggest the importance of a trademark lawyer.
Ultimately, if you want to start a record label, you must consider the long-term importance of selecting a brand name and obtaining a federal trademark registration on the first attempt.
In Part 4 of 5, we will introduce the basics of the music industry and the various contracts that you will need drafted in order to operate your business.
[...] Click Here for Part Three var addthis_pub = ”; var addthis_language = ‘en’;var addthis_options = ‘email, favorites, digg, delicious, myspace, google, facebook, reddit, live, more’; « Starting a Record Label – Part 1 of 5 | Congratulations to Stephen “tWitch” Boss – staring in Stomp The Yard 2! » [...]
[...] This is part 4 of our five part series on Starting a Record Label. In our previous posts, we introduced the idea of starting a record label – to begin thinking about what it means to run a record label from a business perspective (Part 1 of 5). We also discussed the steps you need to take in forming a business entity (Part 2 of 5) and the importance of protecting your brand name through federal trademark registration (Part 3 of 5) [...]