Many new business owners are so focused on honing their services, obtaining financing, and expanding their clientele that they forsake the importance of recording keeping. Rarely do new business owners understand how improper recording keeping can negatively impact their intellectual property rights. Specifically, proper records can greatly impact your ability to register your trademark or service mark on the USPTO’s Principal Register.

This situation may arise where your mark is descriptive of the services you offer. For example, say you offer high end potato chips and you market your product with the brand name “Fancy Potato Chips.” While a more unique and fanciful name is always best from a trademark registrability standpoint, many business owners enjoy the ability to convey aspects of their goods or services directly within their brand name. It immediately shows their consumers the quality and nature of their product. However, in most cases, the USPTO does not allow these types of marks to be on the Principal Register. There is a secondary classification called the “Supplemental Register” that allows for the use of the ® symbol, but the Supplemental Register affords very limited protective measures as compared to the Principal Register.

If a brand has been in use for more than five years, the business owner has an opportunity to make a “2(f) Acquired Distinctiveness” claim based on evidence. But many times, this evidence is unavailable due to improper record keeping. So what kind of records should new businesses keep in order to prevail on a 2(f) Acquired Distinctiveness claim?

Advertising Expenditures

One of the most important factors in showing a mark is distinctive, meaning that consumers recognize the brand with the business’ products, is advertising costs. Many people will take out a few ads in a local paper or magazine, buy some TV or radio airtime, purchase a billboard spot, or even distribute door-to-door advertisements. All of the above can provide a rich record that the brand name is distinctive. However, you must keep these records. Keep receipts and invoices displaying how much you spent on advertising. Additionally, it is important to keep copies of the advertising themselves – save ads as PDFs, take pictures of the billboards, and keep recordings of your TV and radio spots. If you utilize online ads, cache their appearance on various sites and take screenshots of the ads.

It is best not to just throw this evidence into one unruly file cabinet. Sort by Fiscal Year, keep accurate records of what types of advertising you placed, the price your paid, and who hosted the advertisements. Not only may these records provide you evidence to justify business tax deductions, it will preserve a record of your investments in your intellectual property.

Consumer Reviews

Most businesses are listed on various review sites like Yelp, Google, Angie’s List, the Better Business Bureau, etc. You should keep screenshots of reviews of your services and products. Even negative reviews can be used to show that your brand name is distinctive. Clearly, we all prefer our reviews to be positive, however, you cannot underestimate the value a negative review can have not only for strengthening the business but its usefulness as evidence of brand distinction. So keep the records of the dates and locations of all your reviews — good and bad.

Web Domains and Social Media

While web domains and social media platforms can be considered under your advertising ventures, it is beneficial to keep separate records. These records should be a list of the domain names the business owns, when the domains were purchased, the traffic rate, and who hosts the websites. Additionally, if you outsource your social media/web page presence, keep records of these expenditures and the persons/entities that run your social media. These records can be used to further your argument that your brand is distinct in the minds of average consumers.

Orders and Invoices

Although this segment should go without saying, it is crucial to reiterate. Keep accurate records of your sales! These records should be broken down by year or even quarterly. Sales records can be used to say to the USPTO that you have X many clients that purchase your products at X price for X amount of years. The longer you can demonstrate you have been consistently selling your products, the greater the chance you will be successful in a 2(f) claim.

All of the foregoing evidence can be used to show the USPTO your brand is distinctive — But you MUST have the records to prove the evidence exists. While this task may seem daunting and tedious to a business owner just starting out, you will certainly be grateful you took the time to keep proper records. Not only are these types of records key to your ability to obtain financing, file taxes, and operate a successful business in general, they can be the deciding factor regarding your intellectual property scope of protection.

Anthony Buchta Jr., is an Associate Trademark Attorney at LegalForce RAPC Worldwide. He holds a Juris Doctorate degree with a Certificate in Law, Science and Technology from the Sandra Day O’Connor College of Law at Arizona State University. He attended Northern Arizona University for his undergraduate studies, earning a B.S. in History with minors in Political Science and Criminal Justice & Criminology. Anthony is an avid Sun Devil Football fan who enjoys playing the guitar and saxophone. He is admitted to practice law in Minnesota.

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