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Advantages of Federal Trademark Registration

July 30, 2010   Steve Davis   Trademarks   No Comments

Nearly all businesses have trademarks, even if they have never tried to register them.  Merely doing business under a name, or selling a product through the use of a name or logo, may give a business owner “common law rights” in the name or logo.  These rights may entitle the business owner to remedies under the law against infringement, even if the business owner takes no steps to register its marks.

While a federal trademark registration does not create rights in a mark, it can help to secure those rights and provide additional benefits to the trademark owner.  Smart business owners should consider carefully what their marks are and whether it makes sense to attempt to register them.

Whether a mark can be registered with the U.S. Patent and Trademark Office depends on three main factors.  First, the mark must be used in interstate commerce.  The interstate commerce requirement is most easily satisfied when a business sells a product or provides a service to a customer in a different state from where the business is located.  The requirement is also satisfied by sales to customers in the same state if the business uses interstate commerce in the course of making the sale, such as if customers use the business’s website to place an order.

Second, the mark must be sufficiently distinctive or strong to be federally registered.  Generic marks cannot be registered at all and descriptive marks can only be registered under certain circumstances.  We discussed the strength of marks in a previous blog post, here.

The third main factor is whether an application or a registration for a confusingly similar mark already exists.  Although the first to actually use a mark has priority over later users of a similar mark, the first to file an application to register a trademark has priority in the registration process.  This means that even if a company has priority in its use of a mark, called a “senior user”, if a later user of a confusingly similar mark, a “junior user”, is the first to file a trademark application, and the first company seeks to register its mark the junior user’s application will be given priority and will likely prevent the senior user from obtaining a registration.  The senior user will not be prevented from continuing to use its mark, but, if it may be limited to using that mark only in the market it had established at the time the junior user’s registration issued.

This situation illustrates one of the primary benefits of a federal trademark registration – it gives a business peace of mind that it will be able to continue to its mark without interference from later junior users.  In fact, the registration gives the business a potential nationwide right to use its mark in areas where it is not currently doing business.  For example, if a business in California obtains a federal trademark registration for its mark and a business in Arizona begins using a confusingly similar mark after the registration issues, if the California business expands into Arizona, it can require the Arizona business to stop using its mark.

A federal registration also allows a business to use the registration symbol, ®, in connection with its mark.  Use of the symbol can have marketing advantages, as consumers may see a registered mark as an indication of quality.  If it is ever necessary for a business to enforce or defend its trademark rights in court, a federal registration gives the business a number of advantages.  First, the registration creates a presumption that the mark is valid, that the registration owner is the true owner of the mark, and that the owner has the exclusive right to use the mark.  Second, the registration allows the owner to file a suit in federal court.  It is often preferable to bring an action in federal rather than state court.  Additionally, the owner of a registered mark can seek damages for trademark infringement beyond what can be obtained with only common law rights in a mark.

A federal trademark registration also can help to prevent foreign infringers from importing their products into the United States.  A business can notify the U.S. Customs and Border Protection agency (“CBP”) of its registered mark, and if products are imported into the United States that infringe the registered mark, CBP can seize those products.

Given the above advantages, businesses should seriously consider seeking a federal registration for their marks.  However, the registration process can be complex and businesses should consult with an experienced trademark attorney to determine if their trademark qualifies for federal registration and to guide them through the registration process.

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