Trademark rights can be acquired in the United States by (1) using the trademark, or (2) filling a trademark registration application at the U.S. Patent and Trademark Office.
Sometimes, businesses choose not to register trademarks with the USPTO. Common law trademark rights exist for marks that are in use, but have not been federally registered. However, these rights are limited. Your client’s rights are limited to the area where the trademark is being used by your client. If someone else files a USPTO application and gets a federal trademark registration, your client’s rights could be even more limited. Your client’s rights in this situation will be limited to the geographical extent of its mark usage as of the filing date for the other party’s request.
These problems can be avoided by federally registering a trademark, and there are many other important advantages.
One of the fundamental principles regarding rights in trademarks is that the first person to use the trademark has greater rights than all others. It is vital to use a trademark or file an application in USPTO . A federal trademark registration has many benefits:
- This provides constructive notice of your client’s trademark rights to other Americans and places the mark in the USPTO records where many trademark searches are made. It also gives others actual notice of your trademark rights, which is useful when they choose a trademark.
- The USPTO can use the registration of your client to prevent others from registering confusingly similar marks once it has been obtained.
- Notifies the nation of ownership of your client’s mark from the date of registration.
- Your client is granted the right to use (r)symbol in connection with the goods or services that are listed in the registration
- Any third-party copy of your client’s product bearing your client’s mark with that mark could be considered a “counterfeit” under federal law. Importation of counterfeit products can be stopped if the registration is registered with U.S. Customs.
- Your client might acquire “incontestable” rights to a trademark after five years of continuous registration and continued use. Your client may be able to gain incontestable trademark rights that can add great value, not only while they own the business but also after the sale.
“Incontestable Rights” refers to the fact that your client’s rights to the mark are very unlikely to be challenged in court.
Incontestability provides trademark owners with the security of cease-and-desist letters. If your client owns a common-law trademark, with no federal registration, and another person has a federal registration for that same/similar mark for similar goods or services, your client might have to cease using that mark. This is even though your client may have built substantial goodwill through their use of the mark for many years. A cease-and-desist from an unknown previous user of a trademark registered in the federal trademark register will not be considered a significant event if that trademark owner is a trademark proprietor.
If a federally registered trademark is incontestable, it can be a huge benefit to the owner if he or she decides to sell the company associated with the mark. A trademark is a valuable asset in a sale. The buyer will want to be sure that the client owns the rights to it. These assurances are usually made in the form a warranty. The seller/owner of a federally registered trademark may be able negotiate the cancellation of the warranty if your client has such rights.
There is only one option between federal trademark registrations and common law trademark rights. That is registration.
The post A Common Law Marriage, a Common Law Trademark may Not Be the Right Way to Go… was originally published by Attorney at Law Magazine.