To Register or Not to Register: The Benefits and Limitations of a Trademark Registration

Laura Marmulstein

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The moment you begin using your trademark in U.S. commerce (for example, with the sale or exchange of your goods and/or services), you establish what is called “common law” trademark protection. While you have certain rights in your trademark upon use, there are various limitations to common law rights and we almost always recommend seeking registration of your trademark. Trademark registration affords you with greater rights not available under common law, though there are certain limitations on those rights, as discussed below.

Common law trademark rights are limited in geographic scope. For example, if you are the first to open a restaurant in Colorado called MINT, you establish common law trademark rights in the mark MINT in Colorado. You will be a “senior user” or “prior user” to any other business that tries to use the term MINT with restaurant services, or any related services (for example, a bar or food truck), only in Colorado and you can prevent such businesses from using this same mark in Colorado. However, you cannot prevent a business from opening a restaurant called MINT in New York, as your common law trademark rights are limited to Colorado.

Because common law rights are limited in geographic scope, you may not be able to expand your restaurant under the same name to other areas where other businesses may have senior rights in the same mark. If another business obtains a trademark registration on the same mark for restaurant services, then they can claim nationwide rights and prevent you from expanding outside of Colorado, though you may be able to prevent them from entering into the Colorado market if you were using the mark first.

A trademark registration is national in scope and preserves the right to expand to other markets, provided there are no senior common law users of the mark in that market. To establish that you have senior rights over a common law user when you own a trademark registration, you can claim senior rights through your prior use of the mark in commerce in your initial geographic area prior to the common law user’s use of the mark in their geographic area, even if the areas are different. You can also claim senior rights if you filed an “intent-to-use application” prior to the common law user’s use of the mark. An intent-to-use application is a type of application that is filed when you have a bona fide intent to use the mark in commerce, but you are not yet using the mark in commerce. An intent-to-use application allows you to obtain a constructive date of first use of your mark as of the filing date of the application. 

Other benefits to trademark registration include a presumption of the validity of the trademark, prima facie evidence of trademark ownership and use, and an incontestable status available after five years of registration. These benefits afforded to a registered trademark often make it easier to prove an allegation of trademark infringement and to defend your trademark rights should someone challenge those rights.

Further, when your trademark is listed as a registered trademark on the Federal Register, it is more likely to be discovered by a company conducting standard diligence, which may dissuade them from selecting a similar trademark. Registration also allows you to use the trademark registration symbol ®, which can further deter potential infringers.

Additional benefits of federal registration include the ability to sue for infringement in federal courts and to recover increased damages and attorneys’ fees in certain circumstances in infringement actions.

A trademark registration can be a powerful tool to defend against third-party claims of trademark infringement. In other words, it may be more difficult for a senior user to force you to rebrand if you own a trademark registration. Even if another user does have legitimate senior rights, they may not have the funds to cancel your trademark registration, as cancellation proceedings can be quite expensive. A trademark registration may provide you with some leverage to potentially negotiate coexistence with a senior user (for example, you could agree not to enter their geographic area). If your trademark has achieved incontestable status after five years of registration, then a prior user cannot cancel your trademark registration on the basis of their prior use, though you may still be prevented from entering their geographic area.

When enforcing your rights based on a trademark registration, there are some limitations. For example, you cannot enforce your rights against any legitimate senior common law users of the mark. You also cannot enforce your rights against a junior user of the mark that operates in an entirely different geographic area unless you can prove plans to expand to that same geographic area. This is particularly true for restaurants that operate in distinct locations and a bit more convoluted for online businesses that could operate on a more national scale. The key question is whether the junior user’s use of its mark is likely to create consumer confusion as to the source of the goods and services. If there is a likelihood of your markets overlapping, there is a greater likelihood that consumer confusion will result.

Overall, to increase your trademark rights, to improve the ability to defend your trademark rights, and to mitigate the risks of incurring monetary damages and/or having to rebrand down the road, we typically recommend registering your trademark.

 

ABOUT THE AUTHOR

PARTNER

Laura counsels clients on legal issues related to intellectual property, including patents, trademarks, and copyrights. Laura helps clients build strong intellectual property portfolios, taking into account various types of protection options, such as utility and design patents, including both U.S. and foreign, trademark and trade dress registrations, and copyright registrations.

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