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A trademark may be eligible for registration, or registrable, if amongst other things it performs the essential trademark function, and has distinctive character. Registrability can be understood as a continuum, with "inherently distinctive" marks at one end, "generic" and "descriptive" marks with no distinctive character at the other end, and "suggestive" and "arbitrary" marks lying between these two points. This part of registration is known as Section 3 of the trademark act in the UK as opposed to Section 5 which is concerned with prior rights of others. A mark must satisfy both sections to become registered.

A fanciful / inherently distinctive trademark is prima facie registrable, and comprises an entirely invented or "fanciful" sign. For example, "Kodak" had no meaning before it was adopted and used as a trademark in relation to goods, whether photographic goods or otherwise. Invented marks are neologisms which will not previously have been found in any dictionary.

An arbitrary trademark is usually a common word which is used in a meaningless context (e.g. "Apple" for computers). Such marks consist of words or images which have some dictionary meaning before being adopted as trademarks, but which are used in connection with products or services unrelated to that dictionary meaning. For example, Salty would be an arbitrary mark if it used in connection with telephones, e.g. Salty Telephones, as the term "salt" has no particular connection with such products.

A suggestive trademark tends to indicate the nature, quality, or a characteristic of the products or services in relation to which it is used, but does not describe this characteristic, and requires imagination on the part of the consumer to identify the characteristic. Suggestive marks invoke the consumer’s perceptive imagination. An example of a suggestive mark is Blu-ray, a new technology of high-capacity data storage.

A descriptive mark is a term with a dictionary meaning which is used in connection with products or services directly related to that meaning. An example might be Salty used in connection with saltine crackers or anchovies. Such terms are not registrable unless it can be shown that distinctive character has been established in the term through extensive use in the marketplace (see further below). Lektronic was famously refused protection by the USPTO on ground of being descriptive for electronic goods.

A generic term is the common name for the products or services in connection with which it is used, such as "salt" when used in connection with sodium chloride. A generic term is not capable of serving the essential trademark function of distinguishing the products or services of a business from the products or services of other businesses, and therefore cannot be afforded any legal protection. This is because there has to be some term which may generally be used by anyone—including other manufacturers—to refer to a product without using some organization's proprietary trademark. Marks which become generic after losing distinctive character are known as genericized trademarks.

It can be seen from the examples above that the distinctive character of a term is closely related to the products or services in relation to which the term is used.

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