Trademarks identify the source of goods and services, and distinguish them from those manufactured, sold or offered by others. Trademarks represent quality assurance and the goodwill of a business. As such, trademarks:
- indicate the source of the goods and services;
- distinguish your company’s product from a competitor’s product;
- assist consumers in making an informed purchase; and
- allow you to enjoy the benefit (or detriment) of your reputation, while preventing others from freeriding.
In the United States, trademark rights are based on using a mark in the sale of goods or the rendering of services. There are two primary sources of trademark rights in the United States: (a) Common law rights, based on use, which are established only in the particular geographic areas where the mark is used; and (b) Federal registration, which provides nationwide rights.
Common law rights attach as soon as you begin using your mark as an indicia of source for a good or service, and that good or service is actually sold or rendered to consumers. Much like a registered trademark, a common law trademark can utilize words or symbols, images, graphics, or a combination thereof, to signify the source of your product or service. It is advisable to use the notice symbol TM (superscripted, in the case of a trademark) or SM (superscripted, in the case of a service mark) which indicates that you claim trademark rights in that word or symbol. Common law trademarks allow certain enforceability within the geographic region where you are using the mark. If the defendant’s mark is held to be “likely to cause confusion,” a court may enjoin such use within your territory, but a similar mark may be used in geographically remote locations.
Because actual use is required to obtain common law rights, you must invest a great deal of time and money in a potential mark before obtaining any rights. During that period, a third party may acquire rights, exposing you to liability upon launching your goods or services. Under the federal registration scheme, an application for registration may be filed based on the bona fide intent to use the mark in interstate commerce (“ITU”). Filing the application provides a constructive, nationwide priority date, provided your registration eventually issues. Before a registration will issue, though, you must prove to the USPTO that you have begun using the mark. Unlike patents or copyrights, trademarks can have unlimited duration if they are continuously used, however, the registrations must be renewed periodically. Additionally, trademarks are “territorial,” that is, trademark rights must be obtained separately in each jurisdiction, many of which adopt a strict “first to file” rule on priority of rights.
Federal U.S. Registration affords several advantages, and is a much more robust form of protection as compared to common law rights. Benefits of Federal Registration include the following:
- Constructive notice to the public of the registrant’s claim of ownership of the mark;
- Legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration;
- Limitations on certain defenses and bases to challenge the mark’s validity, after 5 years;
- The ability to bring an action concerning the mark in Federal court;
- The ability to collect statutory damages in the case of “counterfeiting”;
- The use of the U.S. registration as a basis to obtain registration in foreign countries;
- The ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods; and
- The use of the ® symbol.
Deciding whether to register a trademark is an important business decision, and the benefits for registering a trademark with the United States Patent and Trademark Office (USPTO) are well worth it.