The Importance of Service Marks and Trademarks and their Differences

Trademarks are an important aspect of intellectual property. A trademark can be any word, symbol, logo, name, device, color combination or a variation in shape that is used in connection with a specific product or service. A trademark differentiates and distinguishes the goods and services offered by one person from that of another. Marks can include a combination of colors, devices, letters, symbols, names, shape of goods, brand, heading, packaging or any combination of the same. Consumers tend to associate goods and services with the marks attached to them. Usage of a particular mark over time increases the confidence of the consumers on the product or service it is associated with. Trademarks help the consumers in identifying the source of any product or service.

When a mark is used in relation to a service it is known as a service mark. A service mark can be a phrase or logo or any other mark that identifies and distinguishes the services provided by one service provider from that of another.

Difference between the service mark and trademark:

Trademarks and service marks are closely related. Both trademarks and service marks differentiate the products or services provided by one person from that of others. They add distinctiveness to the product or service in respect of which the mark is used. Both are governed under the same substantial and procedural laws and are often used interchangeably. A trademark sets a company apart from the others. A service mark provides the same function for a service-oriented business. However, trademarks and service differ in one crucial aspect. A trademark is used by a business which is involved with goods or products. For instance, Coco Channel can be used as a good example of a trademark used by the famous designer, Coco Channel, for her products. The Nike logo is also another example of a trademark used by the company to differentiate its merchandise from that of its competitors.

Service marks, on the other hand, are used by service providers who provide a wide array of services like education, real estate, communication, banking, transportation, storage, entertainment, etc. For instance, the name of United Airlines, its tagline and its logo are service marks. Names of educational institutes such as Indian Institute of Technology, Harward, Oxford University, etc can be treated as service marks as they provide educational facilities to its students. Similarly, names and logos of hospitals such as Fortis or Apollo are examples of service marks.

Many companies are engaged in businesses that provide both goods and services. Thus, they use both trademarks as well as service marks. Amazon, for example, provides online shopping services and also sells branded products like Kindle. Hence, its name can be considered as a trademark and a service mark. Similarly, Starbucks provides services for diner and also sells branded coffee, coffee mugs and other products. Kingfisher is also a good example of a company that employs both trademarks and service marks. Sephora, a cosmetic brand, is a retailer which provides the service of online and offline shopping to its customers and also sells its own make up and other cosmetic products.

Trademarks and service marks are forms of intellectual property. The law provides protection to only those trademarks and service marks which have been registered in accordance with the law. An unregistered trademark or service mark is vulnerable to appropriation by other companies.

In India, The Trade and Merchandise Act, 1958 only allowed for the registration of trademarks that were used in relation to goods. This Act did not provide protection to service marks and hence no remedy was available in case of duplication or imitation of the service mark.

Service providers such as airline companies, hospitals, etc. recognized the need to protect their logos and taglines in order to prevent their misuse. One such instance of misuse of a service mark by the public was uncovered when the giveaway bags of Thai Airways were found to be used by hawkers on the road. Since the existing legal framework did not provide any protection to service marks, a passive route was found to protect service marks against appropriation. Service marks were registered under trademark Class 16. Goods such as paper, cardboard, goods made out of these materials, stationery, photographs, adhesives for stationery and household purposes, paint brushes, artists’ materials, etc fell with the purview of Class 16. Thus, in the absence of any active protection of service marks, an indirect method was used to prevent unwarranted use of service marks.

The Trademark Act, 1999 brought about a notable change in this regard. It consolidated the law relating to trademarks in order to provide better protection of trademarks in relation to goods and services. According to this Act, a trademark means “a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging and combination of colors.” Hence, service marks are included in the definition of trademarks by virtue of this Act.

Under this Act, goods and services have been classified into 45 classes. All Trademarks have to be registered with respect to one or more of 34 classes of goods and 10 classes of services. Broadly, these classes of services include advertising, real estate, education, entertainment, business management, insurance and financial services, legal services, construction, transport, storage and warehousing services, material treatment, scientific and technological services, temporary accommodations, medical services, veterinary services, hygienic and beauty care and personal and social services. Previously, services were classified in Classes 35-42. The categories of services were subsequently widened to include Classes 42-45.

In recent years, there has been a steady decline in the manufacturing sector. Manufacturing employment has seen major shifts in the past several decades. In most developing countries, including India, labor has shifted from agriculture to services, largely bypassing the manufacturing sector. This steady decline can be attributed to the erratic nature of labor. The manufacturing sector is labor intensive. Hence, the unreliability of labor has played an important role in its decline. However, this downfall of the manufacturing sector has contributed to the growth of the service sector with an increasing number of corporations and businesses venturing into the service industry. the service sector has experienced robust growth on an international level. With the growth of the service sector, service marks have also become extremely important in the current economic environment.