New England Biz Law Update
Massachusetts lawmakers overhauled the state’s trademark laws in August by adopting for the most part the Model State Trademark Bill (MSTB).
The changes, which took effect Oct. 29, promise to not only streamline the state trademark registration process and make it more consistent with federal and other state registration processes, but they will also reduce the number of registered marks that are no longer used in commerce. Massachusetts is the 30th state to adopt the MSTB in whole or in part.
The overhaul of the Massachusetts trademark registration process will affect local businesses that want to protect a local market identity associated with a particular name or logo, but are not willing to incur the greater expense associated with federal trademark registration.
Current fees for obtaining federal trademark registration can reach $375, depending on how the application is filed. State registration in Massachusetts is currently $50.
Federal registration is recommended for Massachusetts businesses that market outside of the commonwealth, or reasonably expect to expand outside of the commonwealth. For businesses that expect to market goods and services primarily in Massachusetts, the lower state registration fee offers an appealing alternative to federal registration.
Key differences between old and new law
Laws relating to state registration of marks were codified in Massachusetts General Laws Sect. 110b, which has now been repealed and replaced with Sect. 110h.
Some key differences between the repealed Sect. 110b and the new Sect. 110h include: a shortened renewable trademark term (from 10 to five years); cancellation of a mark that has lost its significance as a mark; treble damages for willful infringement; and cancellation of marks that have not been used for two or more years.
Also, new Sect. 110g of the statute makes it easier to obtain and file documents electronically, allowing for a further streamlining of the registration process.
Although the changes were extensive, the new statute retains aspects of the old law such as a provision indicating that registration of a mark with the commonwealth constitutes constructive notice of ownership of the mark.
Under the previous Massachusetts trademark law, the owner of a registered trademark was required to pay a renewal fee every 10 years. If the renewal fee was not paid, the registration was cancelled.
It did not matter, however, if the owner of the mark no longer used the mark in commerce – the registration was still in effect until the registration was canceled for failure to pay the renewal fee. Unfortunately for many small businesses, this was a common occurrence and it tied up many potentially useful trademarks (sometimes referred to as “deadwood”– marks that are still protected although no longer in use). The shortened term in Sect. 110h should reduce the number of unused marks, making it easier for new businesses to enter their markets.
In addition to the reduction of unused marks, the changes also eliminate protection for marks that have lost significance as marks.
Under the old law, there had been restrictions on marks used in commerce that are merely “descriptive,” and those restrictions are essentially the same as the provisions of the MSTB. In addition to not allowing protection for merely descriptive marks, the new law contains a provision that a mark may become abandoned if the mark loses its significance as a mark.
On the federal level, the owners of brands such as Kleenex® tissue, Xerox® photocopies, and even recently, the Google® search engine, have fought hard to protect the significance of their registered mark so as not to have them become generic terms (hence the juxtaposition of the mark, “Kleenex®” and the descriptor, “tissue”).
Any additional diligence required on the part of the Massachusetts trademark owners to maintain the significance of their marks is offset by a potential increase in turnover of marks provided by the shortened renewal period and abandonment provisions.
Some old provisions remain
Although Sect. 110b has been repealed in favor of the MSTB, a few provisions of the old statute have been retained. State trademark registration is still public constructive notice of ownership of the mark. This means that a business seeking to do business using a particular mark is deemed to have notice of other businesses using the same or similar marks.
This notice, especially with the new provision allowing for treble damages for infringement of a mark, increases the importance for a new business to thoroughly search all registrations to ensure the choice of the new business name and logo is not already in use.
Such a search can save much future anguish. For example, if found to be a potential infringer, one will be considered to have been put on notice of the registered trademark owner’s rights, and, if the potential infringement is found to have been willful, treble damages can be awarded to the owner of the mark. For new businesses, such a financial pitfall is easily avoided with a little research of both state and federal trademark registrations.
Turnover of names used in commerce in Massachusetts will increase due to the shortened renewable term, along with the cancellation provisions due to abandonment of two years or more and cancellation when the mark loses its significance as a mark.
The higher turnover of registered marks will facilitate the use of a desired name or logo to market a local business’ products and services. Although owners of registered Massachusetts trademarks must pay renewal fees every five years, the remedies available to owners over potential infringers have increased.
Ultimately, trademark protection is only effective as a deterrent, and the increased penalties, i.e., the potential for treble damages, will strengthen trademark registrations as deterrents. Owners of marks must remain vigilant for potential infringers, as well as for uses of their marks that tend to make the mark less distinctive.
For new or even existing businesses, many new marks should be available for use, although greater care and research should go into choosing names and logos used in connection with products and services.
Michael Yamauchi, Ph.D is an associate with Hamilton, Brook, Smith & Reynolds. He assists biotechnology clients with patent, trademark, and IP litigation matters.
