Marks include trademarks, service marks, certification marks, collective membership marks, collective trademarks and service marks, and trade dress. A trademark is a word, phrase, symbol or design, or a combination of the foregoing that identifies and distinguishes the source of the goods of one party from those of another. A service mark takes the same form as a trademark except that the service mark identifies and distinguishes the source of a service instead of a product. Certification marks are used by a party to signify that goods or services of others have certain characteristics, a well-known example is Underwriter's Laboratories. A collective membership mark is used to identify that the person bearing the mark is a member of an organization such as a union. A collective trademark or service mark is used by an organization to identify goods or services of the organization's members from those of non-members.
Marks play a vital role in the marketplace by allowing consumers to identify the source of the goods or services. Consumers assume that products or services from the same source will be consistent, thereby repeating satisfactory purchases and avoiding unsatisfactory ones. Trademark law serves to ensure that consumers can rely on marks while exercising their preferences in the marketplace by prohibiting competitors from using marks in a way that confuses consumers about the source of a product or service. Benefits accrue to both the consumer and the business that supplies the product or service. Consumers benefit because they are able to identify the products and services that they want; businesses benefit because they are able to generate "business goodwill." Business goodwill refers to the business' reputation, image and expectation of repeat business. Business goodwill is intangible but can be extremely valuable to a business.
Rights arise in a mark through use, and the scope of the rights will depend on whether registration was obtained for the mark. A mark can be used in a geographic area and provide common law rights to the user even if not registered. Marks can be registered at both the state and federal level. Registry provides the ability to secure use of the mark within the geographic jurisdiction of the registrar subject to preexisting common law users. Courts have categorized marks according to their level of distinctiveness. Arbitrary and fanciful marks are inherently distinctive and can be registered. Descriptive marks can be registered after secondary meaning has been established. Generic marks cannot be registered.