How to acquire trademark rights in a company or product name?
Entrepreneurs often ask whether they need to register their company or product name as a trademark? The answer is that no, you do not HAVE to, but you probably should. This post provides a brief explanation of the difference between common law trademark rights obtained through use, and statutory trademark rights obtained through registration, and how to obtain those rights.
Let’s start with a background on trademark rights. A trademark can be a word, symbol or phrase used to identify a particular entity’s goods (physical commodities) and distinguish them from the products of another. Trademark protection can extend to many identifying items, including product names, slogans, logos, sounds, or “look and feel” of a product.
Rights to a trademark can be acquired in one of two ways:
(1) the first to use the mark in commerce; or
The USPTO provides helpful FAQ here.
These two options are not exclusive – a party can first use the mark in commerce in a particular geographic location, and then register the mark in the future.
Using the Mark
Actual sale of the product, with mark attached, to the public
Rights are limited to geographic area of sale
|Cannot bring suit in federal court unless the mark is registered|
Registering the Mark
File application for registration with USPTO
Right to use mark nationwide
|If a prior user has gained rights by using the mark in a specific geographic area, those rights will supersede the registered mark in that locationIf in the “descriptive” mark category, must be established in the market before filing|
Using the mark
“Use of a mark” generally means actual sale of the product to the public with the mark attached. Advertising that uses the mark will not be sufficient. Trademark rights created in this manner will generally be limited to the geographic area of the sale.
Registering the mark
To begin the application process, identify:
(1) The type of mark you want to register – Is it a word, image, or sound?
(2) The goods or services for which you want to register the mark
(3) Whether the mark has already been used in commerce
The USPTO recognizes three possible mark formats:
- Standard Character Format
- Stylized/Design format
- Sound mark
The Standard Character format is used to register words, letters, or numbers – a particular set of symbols that are irrespective of any particular design element. The Stylized/Design format, on the other hand, is used to register a particular appearance of a design element. For example, the “ebay” logo has a distinctive font and color scheme. The word “ebay” itself can be registered as a standard character format, while the logo design use of “ebay” can be registered under the stylized/design format. The Sound format
Category of Goods or Services
A trademark application must specify a category or categories of goods or services. For example, “iphone” is registered in the class of cellular phones. A trademark may be registered in more than one category.
Acceptable categories may be found here at the USPTO website.
Use in Commerce v. Intent to Use
If the mark has not yet been used in commerce, the legal entity that owns the trademark may file an application for registration with the “intent to use the mark” in commerce. When applying under “intent to use,” it is important to recognize where the mark lands on the spectrum of trademark protection. There are four main categories of marks on the spectrum of trademark protection. The type of mark defined by the relationship between the mark and the underlying product: (1) arbitrary or fanciful; (2) suggestive; (3) descriptive; or (4) generic. The list of categories is ordered from the strongest protection to the weakest. You can learn more about these categories in this prior blog post. Generic terms cannot gain trademark protection. Descriptive terms can only be registered with the PTO once they have gained “secondary meaning” – they need to be at least somewhat established in the market before they can be registered. Suggestive or arbitrary/fanciful marks can be registered immediately.
Once the mark in actually used in commerce, this application must be amended to a “use” trademark registration in order to give rise to full rights.
Scope of Protection
It is important to note that filing for federal trademark registration does not guarantee rights to the mark. The USPTO refuses almost 80% of applications. A common reason for refusing to grant the registration is that the mark is “likely to cause confusion” with a mark from a prior application. Another common reason is that the term is merely “descriptive” and has not yet been established on the market.
Even if officially registered, the mark may later be invalidated in court (for a specific area or category of goods) if another user has established prior rights by using the mark. The mark may be invalidated if the mark, when compared to a prior user’s mark, creates a “likelihood of confusion” among consumers regarding who is offering the product or service. In order to determine with the use creates a “likelihood of confusion,” courts look at various factors, including: similarity of the marks (sound, sight or meaning), similarity of the products/services, customer overlap/channels of trade, actual confusion, intent, strength of mark, etc. For example, “Ray-Ban” is a well-known brand of sunglasses. If another manufacture tried to sell “Ray-Ben” sunglasses, a potential customer is likely to erroneously believe that Ray-Ban made this product, and Ray-Ban would likely be liable for trademark infringement. It is important to recognize that the prior user may have rights even if mark has not been registered.
Benefits of Registration
There are a number of benefits to federal trademark registration. Registration establishes notice to the public, strengthening your claim to an exclusive right under state and federal law, and gives you the ability to bring legal actions in federal court.
Additionally, registering the mark with the USPTO will give the party the right to use the mark nationwide (despite any geographical limitation of actual sales). In other words, federally registering a mark counts as using that mark in commerce nationwide. However, this right is limited- if the mark is already in use (“use in commerce”) within a specific geographic area, that prior user retains the right to use the mark within that area alone. The party registering the mark can still use it everywhere else.
Costs and Timeline of Registration and Protection
An application for federal registration typically costs $300-400 to file. Legal fees may lead to a total cost of around $1500-2000. An examination will begin approximately 3 or 4 months after filing, and if everything goes smoothly, registration can be completed approximately 15-24 months after filing.
Maintaining Registered Trademark Rights
The trademark registration is valid as long as post-registration documents are maintained. These post-registration documents require the trademark owner to show proof of use (1) between the fifth and sixth year after registration; (2) ten years after registration; and (3) every ten year period afterward.
If the documents are not filed as required, the registration will be cancelled and cannot be revived or reinstated. Further information about that process is found here.