Trademark Law 101
A trademark can be a word, phrase, logo, or combination of the three. This “mark” serves a specific purpose: it identifies the source of goods or services. The purpose of trademark law is to avoid consumer confusion.
When you use an inherently distinctive mark “in commerce,” you automatically obtain trademark rights and can identify your goods with the TM marker. These “common law” rights include the exclusive ability to use your mark in connection with your goods. However, these rights are limited to the geographic region in which you provide your goods. In other words, a competitor in a different state can legally use the same mark as you.
On the other hand, if you register your mark with the United States Patent and Trademark Office (USPTO), you obtain significantly greater rights. Registered marks are identified by the use of the ® marker. Instead of being limited to your geographic area, you obtain the exclusive right to use your mark in connection with your goods anywhere in the country. You lock out the competition, nationwide, from using your mark in connection with similar goods.
The Nightmare Scenario
If your business has any aspiration to distribute outside of your local area, including a hope to do so in the future, trademark registration is highly recommended. To see why, take a look at the following example.
Over the course of three years, Brewery A spends an ungodly amount of money to get its product to market in its area. During that time it sweats over beer names, marketing, and establishing brand recognition. It works. Distribution plans are prepared and more internal investment is made to keep up with increased production demands.
Three months into distribution, Brewery A receives a threat letter from Brewery B, a brewery in another state. Brewery B filed for trademark registration of the mark associated with its best selling beer prior to Brewery A’s expansion.
Brewery B won the race to file and has nationwide priority to use that mark, subject to Brewery A’s common law rights. While Brewery A may be able to preempt Brewery B, it will cost significant legal fees and could take years to complete. This uncertainty can sink a business.
This situation is completely avoidable if Brewery A filed for trademark registration prior to expansion or as explained below, before using that mark.
To avoid uncertainty, and to avoid trademark infringement concerns, you should file for trademark registration before using a mark in commerce. This is called filing on “an intent to use” basis.
In general, a trademark cannot be registered until it is used “in commerce.” However, this creates risk that a business will select a mark, invest to use it in commerce, and then be denied registration. The “intent to use” filing avoids this risk by determining whether trademark registration is available before sinking money into your brand.
Trademark registration should be viewed as an investment into your business. It will give you greater opportunity to expand, avoid infringement threats, and save money on re-branding.
Your brand is your most valuable asset. Isn’t it time you protected it?