The Real Estate Business & Trademark Law – Part I

Co-Author:  Amy E. Allison, Esq

Question:   I am starting my own real estate company and will invest much of my time and money promoting my company. I have hired a graphic artist to design a logo. How can I avoid using someone else’s name? How can I protect against someone taking advantage of the goodwill I will build around my logo? I have registered my domain name “XYZ.com.” The Colorado Secretary of State has already approved my corporate name as “XYZ Realty, Inc.” Do these steps assure me trademark protection?

Response:   This article seeks to explain some of the most basic concepts of trademark law. Due to the breadth of the information covered, the article will be split into two parts. Part I will cover what trademarks are and how they are established. Next month we will discuss how to properly register a trademark on state and/or federal trademark registers.

Both real estate and trademarks are property. Some of the basic notions of trademark law are analogous to concepts in real estate law. Since most of the readers of this article are knowledgeable about real estate law, we will explain some notions of trademark law by analogizing to real estate law.

Someone may acquire “common law” rights to a trademark within a limited geographic area by actual use of the mark in connection with a particular good or service. Establishing common law trademark rights is somewhat analogous to acquiring title to real property through adverse possession. Unlike adverse possession, which requires the open, notorious, and hostile taking of a property for a continuous period of eighteen years, common law trademark rights may be established based merely upon a bona fide actual use of the mark in connection with a particular good or service.

Most entrepreneurs seek to establish a distinctive trademark to separate the entrepreneur from the crowd. If an entrepreneur is aware of her local market, it is unlikely that the entrepreneur who is acting in good faith will choose a mark which is deceptively similar to an existing trademark. Where brokers run into common law trademark problems is when the broker seeks to expand the business into other geographic areas. The broker may find a competitor in a different geographic region using the broker’s mark or a similar mark. The competitor might have established prior common law rights in that geographic area. The purpose of searching is to reduce the risk that someone else is using the mark in which you are about to invest time and money in order to build goodwill.

Preliminary trademark searching can be done through on-line data bases which search federal and state trademark registers (which are somewhat analogous to clerk and recorder’s offices) and domain names.

Though the Colorado Secretary of State allows you to incorporate as “XYZ Real Estate,” this affords you almost no trademark protection. For example, had someone else been operating as “XYZ Real Estate,” without incorporating, the Secretary of State’s records would not reflect the name of the company. Yet, the owner of “XYZ Real Estate” may have established common law trademark rights in the geographic area in which you seek to practice. Registering with the Secretary of State is a fact which helps a proprietor establish their own common law rights, but it is no substitute for the protection afforded by registering your trademark.

If your desired trademark passes preliminary screening, you may be ready for a more comprehensive search. These searches are conducted by companies who specialize in trademark searches. These companies are somewhat analogous to title companies. They are critical for a federal trademark registration, but are of less importance for an entrepreneur seeking to establish a Colorado real estate company.

Once you have completed your trademark search and have decided upon a distinctive trademark, you can begin the trademark registration process. Next month we will discuss the differences between state and federal trademarks and the registration process.

Amy E. Allison is no longer with the law firm of Frascona, Joiner, Goodman and Greenstein, P.C.

A version of this article appeared in the Colorado REALTOR® News, the monthly publication of the Colorado Association of REALTORS®.

Jon Goodman is a shareholder with Frascona, Joiner, Goodman and Greenstein, P.C., a Colorado law firm. His practice areas include Real Estate,Brokerage Law, Contracts, Land Use, Leasing, Real Estate Title, Association Law, Business Law, and Finance. Contact Jon Goodman.

Disclaimer — Content is general information only. Information is not provided as advice for a specific matter, nor does its publication create an attorney-client relationship. Laws vary from one state to another. For legal advice on a specific matter, consult an attorney.

JONATHAN A. GOODMAN