Planned Community Names: Do You Own Them or Does The Community?

Article by David M. Kelly and Todd A. Anthony*

Originally published in The Real Estate Finance Journal, Spring 2004

Developing a planned community or resort isn't exactly a walk in the park. As a developer, you spend a great deal of time, energy, and money on locating and purchasing the right property, obtaining all the governmental approvals, lining up financing, and designing and planning the community.

But other important issues demand your attention: What's the name of your new community (which we'll call NewTown)? Can you protect NewTown as an enforceable trademark? Should you federally register NewTown as a trademark?

Selecting Community Name

One cardinal rule should guide your efforts when selecting a name for NewTown: All trademarks are not created equal. The more distinctive a mark, the stronger and more protectable it will be. Trademarks are generally classified into four categories of distinctiveness: fanciful, arbitrary, suggestive, and descriptive.

The most distinctive marks are fanciful markswords or terms invented or coined solely to serve as a trademark. Examples include EXXON and KODAK. They are extremely strong marks and are entitled to the widest scope of protection available.

Arbitrary marks are likewise extremely strong. They consist of words or terms in common linguistic use but do not describe or suggest any characteristics of the products or services they identify. Examples include CAMEL cigarettes and APPLE computers.

Suggestive marks require consumers to exercise some thought or imagination to determine the nature or characteristics of the product or service they identify, but do not immediately describe a characteristic or feature of the product or service. Examples include COPPERTONE sun tan lotion and LONDON FOG outerwear. Although suggestive marks are immediately protectable and registrable like fanciful and arbitrary marks, they are not as strong.

At the bottom of the distinctiveness spectrum, descriptive marks immediately describe some ingredient, feature, intended result, or other characteristic of the product or service they identify. Examples include VISION CENTER optical clinic and TRIM fingernail clippers. Geographical designations that are descriptive of the geographic location or origin of products or services also fall in this category (e.g., WALTHAM for watches made in Waltham, Massachusetts).

Unlike arbitrary, fanciful, and suggestive marks, descriptive marks are not immediately protectable or registrable as trademarks. Instead, they are not protectable until the trademark owner can show it has acquired distinctiveness in the mark. This acquired distinctiveness, also called "secondary meaning," occurs when a descriptive term takes on a second meaning, i.e., a trademark meaning in which the descriptive term identifies a single source of a product or service. Secondary meaning can be difficult and expensive to establish. It usually requires extensive advertising, significant commercial success, and at least several years of substantially exclusive use of the mark. More importantly, until secondary meaning is established, others are free to use the descriptive term, which could prevent the descriptive term from acquiring secondary meaning.

Searching Community Names

Before deciding on a name for NewTown, a developer should consider conducting a "trademark search" to determine whether a particular name is available for use, or whether it might violate another's existing rights. Before contacting an attorney, a develper can do some initial screening on his or her own. For example, a develper can look at local phone directories for similar business names, particularly real-estate related names. Develpers could also conduct Internet research for similar names. And developers should check to see if NewTown is available to register as a domain name in any relevant domains (e.g., .com, .net, .org., .biz, .info, .us).

If initial screening efforts do not reveal any obstacles to use of NewTown, developers should consider having an attorney conduct a more comprehensive search that encompasses the records of the United States Patent and Trademark Office or "PTO," state trademark registrations, trademarks and business names in use but not registered, and domain names. The extent of the search will depend on the scope of the development, whether NewTown will be marketed locally or on a broader scale, and whether NewTown may be later used in another geographic area. In any event, it's usually better...