At first, a trademark may be the least valuable of assets.  Famous marks such as Coca-Cola, Microsoft or IBM were nearly valueless at one time. However, for a mature company, the brand name may be its single-most valuable asset. Valued names such as GE, Disney or Intel add billions of dollars to the balance sheet.

Similarly, there was a time when the names Avon, Mary Kay or Tupperware had little or no value.  And yet decades later, the goodwill associated with those direct selling brands would allow their products, if the companies so chose, to be sold in any retail venue in the world.  As they say, “mighty oaks from small acorns…..”

Protection of trademarks is as vital to direct selling companies and distributors as trademark protection in the retail field. Customer or distributor recognition of unique names or logos may well be responsible for generating billions of dollars in additional sales.

For this reason, all leading direct selling companies have devoted substantial budgets to protecting their trademarks and “good names” in the United States and throughout the world. In addition, distributors will note that direct selling and network marketing companies go to great lengths in distributor agreements and policies to outline permissible and licensed distributor use of company trademarks.

It is a good idea for direct selling companies and distributors to have a basic understanding of how our trademark system works in the United States.

Here is how it all works

The use of trademarks originated in medieval England when craft guilds required their members to place their individual mark on products so that the craftmaker could be traced in the event the product was defective.  In time, shoddy craft-makers realized the benefit of associating their product with a mark of a quality craftsperson.  From that point forward, the English Common Law system attempted to develop a body of law which would protect a trademark associated with a merchant’s goods.  Today, in the United States, a merchant’s trademark is protected both by common law as well as by federal and state trademark registration statutes.

A trademark may be a word, phrase, logo, etc., which is strictly associated with a product or service.  It may be defined as a word, name, symbol, or device, or combination, used by a manufacturer or merchant to identify their goods and distinguish them from those goods sold by others.

To receive trademark protection, the mark must be distinctive and distinguishable from others. The most distinctive of marks are those which are purely arbitrary or fanciful. Such marks would include those which have no meaning or connotation other than that of identifying the source of a particular product. For instance, in the field of cameras, the mark “Kodak” is purely arbitrary and distinctive.  As a general matter, the name of a company will not receive protection. Generic and descriptive trademarks are generally not considered distinctive and protectible.  For instance, a company could not receive trademark protection for the trademark “BEER.”

Trademark protection is not achieved by adopting a trademark, but by its “use” in association with the product. Thus, the first user of the mark will probably receive primary protection. A mark, however, which is improperly used or adopted into the general language of the product, may be lost as far as protection.  For instance, such famous marks as aspirin, thermos and escalator have been lost because the public now views these names as descriptions of generic products, and the U.S. Supreme Court ruled that the mark “Monopoly” was lost because it had become the generic description of board games in general.

Once a trademark has been used and adopted, it receives common law trademark protection against subsequent use by another’s, which is confusingly similar to that of the trademark owner. Federal legislation which protects trademarks is known as the Lanham Act. Under federal legislation, a company registers its trademark with the Patent and Trademark Office with a written application, a drawing of the trademark, five specimens or facsimiles of the trademark as it is actually affixed on or in connection with the goods, and filing fee. (Actually, a company may file an “intent to use” mark, even before actual use, and the protection will relate back to the date of filing of the intent to use.) Assuming there is no objection, the company is issued a certificate of registration and it may use the symbol “®” in conjunction with the trademark. This registration is prima facie evidence of the registrant’s right to the exclusive use of the trademark. A registered mark that has been in continuous use for a period of five consecutive years generally becomes incontestable. After the fifth year, the trademark owner must apply for continued use of the mark. The registration period is for 20 years and the mark can be continuously renewed.

It’s for Real

Trademarks may not seem that relevant to the average Networker, but if given some thought, it is the lifeblood of their business.

These articles may provide additional information in regards to this topic: “Who Controls Marketing Materials?” and “Chasing The Competition.” Or watch the video: “How Important is Your Company Name? Learn about Trademarking Your Company Name.”

The MLM Startup Conference in Las Vegas takes place October 25^th & 26^th, 2012!

October 25^th & 26^th, 2012 – 9:00AM-4PM, and one-on-one time with the speakers from 4PM-7PM, both days

The MLM Startup Conference is an educational conference for executives of startup and existing MLM, Network Marketing, Party Plan, and Direct Selling Companies. This conference has been in existence for over twenty years and is hosted by the industry’s leading experts.

The industry’s top MLM experts will help you:

- Create an Effective Compensation Plan

- Understand the Direct Selling Industry

- Understand the Legal Issues that you will Face

- Write your Business Plan

- Outsource your Technology (back office, websites, personal emails) Needs

- Recruit Key Distributors

- Fund your Company

- Develop your Voice and Eblast Technology

- Find and Hire Leading Distributors

- Help you Understand Sales and Retention

- Generate Leads

- And much, much more!

Top Industry Leaders will be Available to Answer all Your Questions during the one-on-one visitations.

- Attorney Jeffrey Babener – Leading MLM Attorney, Direct Selling Educator, and Sponsor of MLMLegal.com

- Mike Sheffield – Co-Founder of the MLMIA and Compensation Plan Guru

- Clifton Jolley – President of Advent Communications

- Rod Cook – MLM Industry Watchdog

- And Many Many More.

To register for the event, please call 503-226-6600 or 800-831-2162.

A full speaker list is available HERE.

Find more information about the MLM Startup Conference HERE.

All attendees receive a free copy of the MLM Startup Manual.

Visit MLMLegal.com – The Best MLM Resource on the Web – for more information.

WASHINGTON, May 09, 2012 (BUSINESS WIRE) — As the association representing more than 200 leading firms that manufacture and distribute goods and services sold directly to consumers, the Direct Selling Association (DSA) would like to set the record straight in response to questions raised about the direct selling business.

Unfortunately, even though these questions have been asked and answered many times by the direct selling industry over the years, stock prices of Herbalife and other publicly traded direct selling companies fell as a result of inquiries by hedge fund manager David Einhorn.

First and foremost, the direct selling business model is solid and strong. After falling slightly in the wake of the Great Recession, total industry sales grew nearly one percent in 2010 and are expected to show even stronger gains when 2011 numbers are announced in early June. Most publicly traded companies reported strong earnings and income in 2011.

Nearly 16 million Americans engaged in direct selling in 2011, some as full-time entrepreneurs seeking to build a business and some as part-time representatives hoping to earn a little extra money. Others sign up as representatives simply to purchase products or services for their own use at a discount and never sell to anyone else. Regardless of their income expectations, almost all direct sellers use the products themselves. This is what is known as “internal consumption.”

As the Federal Trade Commission (FTC) stated in a January 2004 Staff Advisory Opinion, internal consumption is not considered to indicate impropriety. Instead, “the critical question for the FTC is whether the revenues that primarily support the commissions paid to all participants are generated from purchases of goods and services that are not simply incidental to the purchase of the right to participate in a money-making venture.”

In short, what the FTC watches for — and what the DSA Code of Ethics is designed to protect against — are compensation systems that are funded primarily or exclusively by payments made for the right to recruit other participants. Compensation must primarily be based on the sale of products and services to the ultimate consumer — whether or not that consumer is also a seller of the products.

Unfortunately, direct sellers have been targeted in the past by short sellers who have deliberately injected inaccurate information or rumors into the marketplace with the goal of driving down stock prices for financial gain. In the end, it is the millions of hardworking American direct sellers who suffer the results of these attacks while the perpetrators walk away with millions in profit.

DSA exists to protect and promote the direct selling industry by educating policymakers, the business community and the general public about the nature of the industry and how it works; and ensuring DSA member companies behave ethically in all aspects of their businesses through enforcement of the DSA Code of Ethics.

The direct selling business model has been thriving for more than 100 years. We encourage anyone who wants to learn more about this quintessential American industry to visit our websites at www.dsa.org or www.directselling411.com , or contact us by phone at (202) 452-8866.

SOURCE: Direct Selling Association

Visit www.mlmlegal.com or www.mlmattorney.com for more information on the direct selling industry.

First, ask yourself if you really believe in the product. Do you believe in the company? Do you believe in its basic mission statement? If you are not passionate about the products and the company, it will show as you try to sell the products and services to consumers or to recruit others into the business.

Are you devoting the time to the business that it deserves? Are you in close touch with your sponsor and taking advantage of the training offered by the company? If you aren’t coming up with the right answers, spend time with your sponsor or a leader in the sales force and see if they can help you figure out what you are doing wrong.

Of course, you need to decide if this business is really right for you.  If you don’t feel excited about the business, it will never work. But if it is right for you, then go get some help, read some books, and surf the web for good insights. Try these sites: www.mlmlegal.com or www.mlmattorney.com. Two books authored by Attorney Jeffrey Babener, who is a twenty-year plus leader in the industry, Network Marketing: What You Should Know and The Network Marketer’s Guide to Success, may help you revisit the basics.

Someone once asked Conrad Hilton how he built a huge hotel empire. He responded, “I only know one thing, the shower curtain stays inside the bathtub.” In other words, to build something big, you need to start from ground zero and build up one brick at a time. So be patient, keep learning and good luck.

Distributors may also find the following articles beneficial: “Ten Common Distributor Mistakes – And How To Overcome Them,” “MLM Presentations: 27 Secrets to Success!” and “MLM Leads – MLM Recruiting Machine.”

We offer a wide variety of distributor education videos as well.

And, visit mlmlegal.com’s sitemap to easily find a plethora of articles that are catered to educating distributors.

But, yes, there is still risk. The risk involves both your time and money. MLM distributors are entrepreneurs. The word entrepreneur derives from a French word, which means “risk taker.” Individuals who are averse to risk-taking should not opt for the MLM model. However, as one baseball expression is notes: you can’t steal second base if you don’t take your foot off first base. This applies to life and to business.

For more information on distributor training and education, view the educational distributor videos, read about currently-operating MLM companies, and read articles at mlmlegal.com, such as “Ten Common Distributor Mistakes – And How To Overcome Them.”

Wall Street made the owner of Excel Communication a mega millionaire when Excel’s Book of Business was purchased and the company made was public.

Wall Street investors invested in Herbalife, which has had extraordinary growth around the world, with Herbalife now traded on the New York Stock Exchange, a favorite of investors.

Variations of corporate America discovering MLM are evident everywhere, from investments in Shaklee to publicly-traded Usana, to the poster child of the direct selling industry and one of the largest cosmetics companies in the world, Avon Products.

For more information, read the articles “PYRAMID: Yes or No?,” “Identifying Illegal Pyramid Schemes” and “Is This a Pyramid or a Legitimate MLM?”

The video, Is the MLM Industry “for real” in the Business World?, may prove helpful as well.

Distributors are often perplexed as to what they can say about the dietary supplements they sell. The answer can be found in federal legislation, adopted in 1994, called DSHEA, the Dietary Supplement Health Education Act.

The legislation was the result of several years of tension between marketers of dietary supplements and the FDA, in which the FDA designated a variety of products as “unapproved drugs” because health claims were being made. To clarify what could be said, DSHEA was adopted and provided that health claims could be made on dietary supplements in terms of how they supported structure and function claims of the body.

Claims such as “supports healthy immune systems” or “supports heart health” could be made if marketers possessed competent, scientific evidence of the products’ effectiveness.

However, marketers could not make medical or therapeutic claims, or suggest that dietary supplements were meant to treat diseases or adverse health conditions. And that is the current state of affairs.

For more information on product claims, read the article “FDA Health Claims: The Final Rules” or “Dietary Supplements: An Advertising Guide for the Industry.”

Also watch the video What is the Relationship between MLM and the FTC? to learn more about the FTC and the network marketing industry.

Well, the answer is yes and no. The bottom line is that one should be skeptical as to analysis and information that is a few “hours” old or is “breaking news.” Although they do offer valuable information sometimes, it is necessary to see who the “pundit” is allied with and if there is any hidden agenda.

Often times, the “breaking news” is changed in a matter of days to a different story. In this case, readers should carefully read and research the websites (and their owners) and take the information they provide with a grain of salt. Some websites actually cite the actual source material and not just to gossip. Look for credible information at websites like www.mlmlegal.com, www.mlmattorney.com, www.dsa.org, www.mlm.com, and www.mlmwatchdog.com.

In the end, be sure to look for substantiation and documentation of the subjects that are discussed. Research the website owners’ online, using search engines such as Google. Access their credibility. And, always be wary of the pure MLM gossip websites.

Here is an example of a seasoned, well-known MLM attorney who provides ongoing extensive information on the direct selling industry. Read the article “Been There – Done That.”

You may also find the video Is the MLM Industry “for real” in the Business World? helpful. MLMLegal provides an extensive compilation of educational videos on the direct selling industry.