8/2/2017: A Lifetime to Build and Seconds to Destroy: Treat a Trademark Like a Reputation

Your business is taking off and work is showing results. You have built a reputation over the years and, until now, you have turned a blind eye toward registering a company trademark. Maybe that thought now comes into focus – when your business gathers visibility and suddenly has a reputation to uphold. Countless business disputes result from a business owner’s failure to take care of the little things early on – before they present a real threat. Consider the benefits of registering a trademark and the consequences of not doing so. Like a reputation, your business has likely taken years to build. Its reputation can be altered, perhaps irrevocably, if a competitor registers the trademark first and markets itself under your company’s brand.

What Is a Trademark?

Generally, trademarks are symbols, words or images that indicate where a product is from, as distinguished from a similar product from a competitor.  This helps prevent a competitor from using your company’s rising visibility to their advantage.

What Is Common Law Trademark Protection?

There are two sets of trademark protections: 1) common law rights; and 2) federal rights.

Common law rights are created by mere use of your trademark and its association with a product or service you sell.  Since actual use of the trademark is required to create a common law rights in the trademark, a company often must spend significant time and money marketing and building a brand before those protections are created.

Fortunately, common law protections apply without a company taking any other action aside from using the trademark – no registration of any trademark is necessary. Under common law, your trademark will be protected by use from a competitor within a certain geographic area around your company. Ultimately, if you found a competitor was using your company’s trademark, your company could enforce common law protections on that trademark to the extent your company could show the competitor’s trademark is likely to cause confusion about the source of the product being sold. Upon the showing of such confusion, your company could use the court system to stop the competitor’s use of the trademark.

What Are the Federal Protections and Why Are They Better?

Federal trademark protections are created when you register your trademark with the U.S. Patent and Trademark Office (USPTO).

The only requirement, aside from fees, is that the application be made in good-faith. Specifically, the registrant must show intent to use the mark in connection with the marketing of a product or service.

The ease of filing with the USPTO creates a problem – a third party can file an application for the same trademark you have, possibly creating significant hardship and expense for your company in the future. For instance, if someone else registers the same trademark before you do, that person or company is given advantages if you ever decide you need to sue that party for improper use of “your” brand. Suddenly, your business’ reputation is at risk. If your brand grows and you dispute the rights your competitor has in the trademark, there is a good chance the ensuing disagreement will be more expensive and difficult than if you had simply registered your trademark first.

Filing an application to register your trademark with the USPTO places the whole country on notice of your trademark use. Thus, if someone attempts to register the same trademark later, you are given priority due to the earlier filing date. Accordingly, moving quickly and early will provide you some peace of mind.

Additionally, federal registration provides more benefits than common law trademark protections. Among other perks, federal registration provides: 1) a legal presumption that the registrant has exclusive right to use the mark nationwide in connection with the good and services listed in the registration; 2) significant limitation on competitors’ ability to argue against your ownership of the mark after five years of registration; and 3) a basis to sue a competitor in federal court for trademark infringement.

I Have Already Registered – What Else Can I Do?

The above is only one small piece of a larger intellectual property puzzle, but generally, the above is helpful. Even after you have registered a trademark, there are certainly other problems that can spin out of control if you do not take steps to enforce your rights, but that is best left for a discussion with an attorney to review the specifics of any dispute. You should also review the differences between trademark, patent and copyright protections, all of which an attorney could advise you with regard to the specific intellectual property needs of your business.

As a business owner, you are often not aware of legal protections that may be very helpful in the future. Naturally, you focus on the most pressing issues – putting out fires. The tendency is to concentrate on growing your business. The problem is you must always assume someone is looking to profit from your hard work. Register a trademark before your company grows more lucrative. Think of good fences and neighbors – draw the boundaries now by registering your trademark and limit the parasites later. Without registering, you are stuck with more limited trademark protections.

Hopefully, you never need to litigate trademark issues, but if you do not register, defending your trademark will generally be more expensive and stressful than need be. You care deeply about your company and its future, so take steps now to protect your brand. Do not let a bored millennial down the street register first because you never bothered to do so. It is guaranteed someone will see your business is profitable and try to take advantage. Although you cannot control a competitor’s nefarious efforts, you can take preventive measures such as registering a trademark with the USPTO.

For more information about this article or F&P’s business law practice, please contact Michael J. Lentz at 410.230.1080 or mlentz@fandpnet.com.