Trademarks and trademark law are a tricky legal property. For one, trademarks are technically “owned” by the individual or entity that uses the mark in association with goods or services in commerce. Yet the underlying purpose of trademarks is to protect the relevant consumer. Trademarks are only valuable (and protectable) to the extent the consumer associates that mark with the source of particular goods and services.
How do you get a trademark? It is not difficult. The exact moment you select a word, logo, slogan, phrase, or design – and “use” it in association with particular goods and services in the stream of commerce, it becomes a legal trademark. While the definition of “use” can be nebulous and imprecise, essentially any sales or marketing efforts that target consumers or customers across interstate lines can be proper trademark “use” that breathes life into a mark. This provides what is known as “common law” trademark rights. These rights are enforceable in a court of law.
The obvious follow-up question then is: if getting a trademark is so easy, why should I bother going through the process of applying for a state or federal trademark registration? What do I get for my money? We have now stumbled across the purpose of this article.
Common Law Trademark Rights
I have written about this before, multiple times, but it is always worth remembering how and why the law protects and enforces trademarks.
Trademarks “protect words, names, symbols, sounds, or colors that distinguish goods and services from those manufactured or sold by others and to indicate the source of the goods.”[1] A junior user with a confusingly similar mark in commerce is exposed to a lawsuit for common law trademark infringement in state or federal court. Now, in every day casual conversations, the term “trademark” is often confused with “trademark registration.” It is an unfortunate colloquial terminology that has led to confusion by non-trademark lawyers. It is a battle I constantly fight.
Nevertheless, “common law” trademark rights do exist and in the United States, the courts of law will strongly enforce these marks against unauthorized uses. The primary statutory authority for trademarks, the federal Lanham Act, also protects common law trademarks from infringement. While the term “unregistered trademark” has the ring of inadequacy, the owner of an unregistered trademark can still recover substantial monetary damages and injunctive relief against a junior user that has infringed that mark. Remember, trademarks protect the consuming public, even if the “owner” gets to recover monetary damages. Common law marks protect the consumer just as much as registered marks do – the law accordingly cannot allow confusion in the marketplace to exist.
That being said, the United States Patent and Trademark Office would naturally prefer that owners of trademark rights take the necessary steps to formally register all eligible trademarks. It helps to provide notice and information to consumers. It helps to organize and identify the owners of trademarks. Registration can bring a sense of order to a legal field that could otherwise be seen as the legal Wild West.
As an incentive to register trademark rights, the Lanham Act and the USPTO provide certain additional benefits to those that have registered trademarks. These rights are above and beyond the rights afforded common law trademark owners. It is only fair, after all.
Trademark Registration
The obvious question is “why should I pay money to a lawyer and to the government to get a registration when I already have common law trademark rights?” The simple answer is “your trademark is an extension of you and your business” and the costs for registration and enforcement are not just reasonable but should also be seen as a long-term investment in your business. There is commercial value in trademarks and your business should recognize this value by acquiring a registration if possible.
There are two ways to register trademarks. In addition to the more popular federal registration, each of the fifty states allows for trademarks to be registered for intrastate uses. For example, I am licensed to practice law in the State of Texas. The Texas Secretary of State allows registration of trademarks for uses within Texas. These uses must be in Texas, the mark must meet certain standards for “distinctiveness,” and the mark cannot be confusingly similar to any other marks currently registered in Texas for the relevant goods and services.[2] Similar requirements are present in all of the other states for registration.
You are probably asking – why should I register a trademark in Texas (or elsewhere)? Texas provides the following benefits for a state trademark registration:
- Registration puts the rest of Texas on notice that you claim ownership of the mark in Texas commerce in connection with the relevant goods or services.
- A certificate of registration is prima facie (rebuttable) proof of: 1) the validity of the registration; 2) the registrant’s ownership of the mark; and 3) the registrant’s exclusive right to use the mark in Texas in connection with the relevant goods or services.
- Texas law provides a statutory cause of action for infringing upon a registered mark.
- It is a crime to counterfeit registered marks.[3]
These are rights not generally afforded to common law trademarks. You do not need an attorney to register a trademark with the State of Texas (though it is strongly advised). The application fees are relatively affordable in Texas, too – currently only $50 per “class” of goods or services.
Now, if you market and sell your good and services not just in one state but across state lines (the Internet has made such “use in commerce” almost standard), acquiring a state-based registration is nice, but it is not as strong as acquiring a federal trademark registration through the USPTO. As an attorney, I cannot recommend seeking to register all trademarks with the USPTO as soon as possible. The fees are higher than a state-based registration. The process is also more in-depth and complicated. The benefits, however, are much more substantial and your mark is protected throughout the entire country for as long as you continue use of the mark and maintain the registration (through renewals, maintenance fees, and declarations of use).
The Lanham Act states that all trademarks are subject to registration, with a few exceptions – for example any immoral, deceptive, or scandalous marks (though the Supreme Court is addressing this issue right now). You also cannot register a mark that is confusingly similar to an existing mark that is already registered. There are other limitations of course, but a trademark being used in commerce that is unique and is not likely to confuse consumers with other marks in commerce is eligible for federal registration in most instances.
Naturally, we want to know what we get for this registration. Benefits include, but are not necessarily limited to, the following:
- exclusive nationwide use of that mark;
- presumptions of validity in court;
- the right to have the mark be deemed incontestable after five years of use;
- the right to sue for infringement in federal court;
- the rights to receive additional damages from willful infringement;
- the right to prevent counterfeit goods from importation;
- and potential international rights and recognitions for use of the mark.[4]
The ability to assert international rights and recognitions should not be overlooked. Your business may be small today, but it is always wise to acquire as broad of legal rights and protections as possible. Additionally, in contrast to state registrations, federal registration allows a mark to be deemed “incontestable” after five years of continuous use – whereby junior users cannot challenge the validity or strength of the mark thereafter.
Once again, the question is about costs. Currently, if you are able to process a trademark application entirely through the USPTO’s online system, an application for one class of goods can be as low as $225 per application (not including legal fees for consulting and using an attorney to help prosecute the application). On average, the process of applying for and acquiring an initial trademark registration with the help of a trademark attorney can be about $1,000, though these costs may vary greatly based on the strength of the mark and the similarity (if any) to other registered trademarks.
In the grand scheme of things, $1,000 may initially seem like a lot of money to spend on an intangible word or logo, but the failure to acquire a state or federal trademark registration can be catastrophic if a trademark owner has to fight an infringer and lacks the presumption of validity and the other rights associated with a registered mark. For these reasons, I always advise trademark owners to be proactive. As a reader of this article, I strongly advise you to seek registration for any trademarks you own as well. In the long-run it will likely be worth the time and expense. You can thank me later.
[1] USPTO definitions; see also Trademark Manual of Examining Procedure § 1202. https://mpep.uspto.gov/RDMS/TMEP/current#/current/TMEP-1200d1e718.html
[2] See Tex. Bus. & Com. Code § 16.001 et seq.
[3] See also Tex. Bus. & Com. Code § 16.060 and Tex. Penal Code § 32.23.
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