Do Nonprofits Need to Worry About Trademark?

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Branding is an essential component of any nonprofit’s broader efforts to raise money and serve its mission. An organization’s trademarks can become core assets with real value. But they can also be a liability if care isn’t taken to ensure that branding doesn’t violate the trademark rights of others.

What is a trademark?

A trademark can be more than just an organization’s logo or name. In fact, a nonprofit can create numerous trademarks as it grows and evolves. In simplified terms, a trademark is a word, phrase, drawing, or combination of these things that is used in commerce to identify the source of goods or services. These terms should be understood in the broadest sense: “commerce” encompasses a nonprofit’s fundraising and service work, for example.

An essential requirement for something to be protected as a trademark is that it be used in commerce. This has important implications. An organization’s name, for example as it appears in incorporating documents, is not a trademark until it gets put on materials that are presented to the organization’s “consumers” (again, the served community or potential donors) as a representation of the organization itself.

Once something qualifies as a trademark its owner acquires a limited, exclusive right to its use. The scope of this right depends on a complicated set of factors, such as the range of activities associated with the mark, how high profile the mark is, and the geographic reach of the mark’s use. A charity that only works and fundraises within one city might be able to exclude other charities from using its name only within its region. But an organization like the Salvation Army has broad rights to protect its name and logo from use not only by other charities, but probably by most other businesses as well.

Several legal regimes govern trademarks in the United States. The federal Lanham Act is the broadest and most important. The U.S. Patent and Trademark Office administers federal registration of marks. States also operate their own trademark registries. State registration, such as California’s, can be appropriate for organizations that will be exclusively within a single state. A trademark can also be protected by common law. “Common law marks” don’t benefit from the perks that come with formal registration, but can still be defended in court against infringing uses.

Why should a nonprofit care about trademark?

There are several ways in which trademark law issues can affect a nonprofit’s business. They can be divided into two categories:

  • Avoiding infringement. Infringing on another organization’s trademarks can force an organization to change its branding and potentially exposes it to litigation. This should be a point of emphasis whenever an organization creates a new public-facing name, whether for the organization itself, a fundraising campaign, or a product. A screening process that’s too casual, like relying solely on a Google search, can miss important conflicts. How far to take a search—anything from amateur searches of government databases to hiring a professional search agency—will depend on the nature of the planned use and the organization’s appetite for risk.
  • Enforcing rights. If another organization’s logo or name steers too closely to a trademark it may become necessary to ask them to stop using it. Sometimes a firmly worded letter can be enough, but if the infringer’s use continues the organization may need to consider going to court. Problems can arise if the infringing use is damaging the organization’s brand. For example, a religious charity needs to protect its logo from being used in a way that disparages its religious values.

Talk to a California nonprofit attorney

Trademarks are an easily overlooked part of the business of running a nonprofit. Talking to an attorney about how they may affect your organization is often a good idea. The Church Law Center of California serves religious and secular nonprofits. Call us at (949) 689-0437 or reach out to us through our contact page.

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