Obtaining federal trademark protection can be of great value to a company and its brands. A federal trademark registration affords important benefits and there are risks associated with not obtaining registration. Accordingly, a company should make it a serious priority.
A Company’s Brand and Trademarks
A brand is what consumers associate with a company. It brings to their minds the distinctive qualities of its goods or services. It also identifies a company as the source of those goods or services. Brand names, logos, slogans and tag lines are all source identifiers that function as trademarks and/or service marks (collectively “trademarks”). Competitors may look to capitalize on the goodwill a company has established in connection with its brand and trademarks by using the same or a confusingly similar trademark. A company can help prevent this by protecting its trademarks.
Trademark rights arise in part, from using a trademark in commerce in connection with the sale or provision of goods or services. These rights are known as “common law” trademark rights. Common law trademark rights can provide limited protection in the specific geographic territory in which the trademark is used even without registration. A company can obtain broader protection for its trademark within an entire state by registering the mark in the state in which it is using the trademark. State trademark protection may be beneficial to a company that is selling goods or providing services solely within a particular state. State trademark protection, however, is typically not as valuable when a company is selling goods or providing services across state lines. Obtaining federal trademark protection with the U.S. Patent & Trademark Office (“USPTO”) affords broader protection and is generally the best option for a company selling products or providing services in interstate commerce.
Benefits of Federal Trademark Protection
There are many important benefits that a company gains from owning a federal trademark registration that are not available through state or common law trademarks rights.
A federal trademark registration:
• Gives others constructive nationwide notice of a company’s claim to its trademark. It excludes others from using the same or a confusingly similar trademark anywhere in the United States.
• Permits use of the “®” symbol with a company’s trademark, which signifies that it is federally registered.
• Constitutes clear evidence that a company’s trademark registration is valid and that it has exclusive rights to use its trademark in commerce.
• Allows a company the potential to obtain “treble” damages (three times its assessed damages), lost profits resulting from the infringing use of its trademark, and/or attorneys’ fees, should a company file an action in federal court for trademark infringement.
• Enables a company to obtain trademark “incontestable” status after five years of continuous use, which precludes others from attacking its trademark registration on certain grounds.
• Enables the USPTO to cite a company’s trademark registration against another party’s trademark application for the same or a confusingly similar trademark. This can lead to that party discontinuing its plans to use that mark.
• Strengthens a company’s legal position when asserting its rights against a party who is infringing its trademark. A party infringing a federally registered trademark would have less of a defense that its infringement was innocent.
• May increase the value of a company and its appeal to others contemplating a potential partnership, merger or acquisition.
• Allows a company to record its trademark registration with U.S. Customs to prevent the importation of infringing goods bearing the same or a confusingly similar trademark.
Don’t Wait to Obtain Federal Trademark Protection
Obtaining a federal trademark registration from the USPTO typically takes up to a year or more from the time of filing. Thus, early registration should be a priority to ensure that a company reaps all the benefits of registration as soon as possible.
By waiting, a company risks that another party may file for and/or obtain a federal trademark registration for the same or a confusingly similar mark before it does. Such an occurrence can make it more difficult and expensive for a company to register its trademark later on. This could prevent a company from registering its trademark altogether.
Moreover, it is easier for a company to take action against an infringer when it already has a federal trademark registration. This is much more effective than starting the registration process upon learning of the infringement. A company may sue an infringer for trademark infringement in federal court upon learning of the infringement. Moreover, a federal trademark registration strengthens a company’s position when making a demand that an infringer cease and desist from the infringing activity.
Additionally, a company can stake claim to a proposed trademark even before it is being used in commerce by filing an intent-to-use (“ITU”) based trademark application. This can be an extremely valuable tool since it often takes months or years to develop a brand and bring it to market. The filing of an ITU based trademark application affords a filing-based priority date over any party who starts using the same or a confusingly similar trademark after the ITU based trademark application filing date.
A company’s brand and its trademarks are often among its most important assets. Thus, a company should make obtaining federal trademark protection for its trademarks a top priority. Given the numerous benefits, it is often in a company’s best interest to obtain federal protection for its trademarks.