Business & Corporate
Fall 2018

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 comes into focus now, 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 your reputation, your business has likely taken years to build. Its reputation can be altered, perhaps irrevocably, if a competitor registers your trademark first and markets itself under your company’s brand.

What Is a Trademark?

Generally, trademarks are symbols, words or images that indicate a product’s source or origin, and distinguish it from similar products. This helps prevent a competitor from using your company’s rising visibility to their advantage.

What Is Common Law Trademark Protection?

There are two sources 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 was 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 (you or your business) 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 use, 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 significant protection and 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 rights to use the mark nationwide in connection with the goods 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.

If you have already registered all of the trademarks that are associated with your business, congratulations. You have taken a critical step in protecting your business’ reputation in the marketplace. If not, you should consider doing so promptly. Registration generally requires only a small investment of time and money, and the return on that investment can be substantial. Registration will not prevent infringement or misuse of your marks, but it should serve as a substantial deterrent to potential infringers, and should also make defending your marks easier and less expensive if necessary.