What is a Common Law Trademark?

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Provided by OnlineTrademarkAttorneys.com

A common misconception in trademark law is the belief trademark rights in the United States requires the mark to be formally registered with the United States Patent and Trademark Office (“USPTO”).  This is not the case.  Instead, U.S. trademark law is based on a first-use system and trademark rights can be established simply by continuous use of the mark in connection with goods or services.  Federal registration is, therefore, not a prerequisite to trademark rights in the U.S.

So what does this mean for you and your business?  Assuming the name does not infringe on an already registered trademark, this means once you start using your mark in connection with your goods or services you have a common law trademark.  Simply put, all you need to do is use the mark to have common law trademark rights.  This is true even if someone subsequently files for federal registration of the same name.  With that said, a common law trademark is not a replacement for a federally registered trademark.  In fact, there are several important reasons why you should still register your trademark with the USPTO.

The biggest problem with a common law trademark is the rights conferred to you are substantially more limited than the rights you would have if you federally registered your mark.  One reason for this is because rights from a common law trademark are limited to the geographical area in which you sell or offer your goods or services.  This means that if you have only conducted business in the New England area, your rights to the mark would not extend to other parts of the country.  Although there are instances where a name can acquire national common law trademark rights, this is very rare and difficult to achieve.  Conversely, by successfully registering your mark with the USPTO you automatically acquire nationwide rights to the registered mark.  Assuming another person does not already have common law rights in the name, this would then allow you to preclude any subsequent person from using the name in relation to the goods or services you provide anywhere in the country.

Another reason federal registration is important is it places everyone on notice of your exclusive right to use the mark as it relates to your goods or services.  This is important because it will allow you to prevent any subsequent person from acquiring common law rights in the mark after you have registered the name.  Given the global economy we live in today, this is particularly important because it is becoming easier for people to reach a large population base to sell their particular goods and services.  As a result, the potential for consumer confusion is a much greater threat to businesses than it was twenty years ago.

Finally, federally registering your mark is also beneficial because it helps to impede another person filing suit against you for trademark infringement.  Recently, there have been many cases of small companies with valid common law rights to a mark being sued by big companies who now wish to use the name and have acquired federal registration of the mark.  Although these small companies theoretically have common law trademark rights to their name, the risk of a lawsuit does not outweigh changing their name.  This is because trademark infringement lawsuits easily will run a company more than $200,000 in legal fees, an expense most businesses cannot afford.  As a result they have no choice but to stop using their name and opt for another name.

These are just some of the benefits of acquiring federal registration.  To see more benefits of federally registering your mark, please visit the USPTO Website.  If you have a mark and are interested in more information regarding trademark registration with the USPTO, please visit Online Trademark Attorneys.

Published July 2, 2013 by Alex Spurr.

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