Petock&Petock - THE BENEFITS OF FEDERAL TRADEMARK REGISTRATION

The Benefits of Federal Trademark Registration

By Michael C. Petock, Esquire

We, as business owners, know that Shakespeare had it wrong when he concluded “[t]hat which we call a rose by any other name would smell as sweet.” There’s actually a whole lot that goes into a name, including blood, sweat, tears and more marketing dollars than we care to think about.

Virtually every business uses a trademark or service mark. Trademarks and service marks (“marks”) are most commonly words, names or symbols that identify the source of a business’s good or services. The mark or marks adopted by a business serve as the center of its marketing, branding and sales efforts and can be critical to its success. As a business owner, you are probably acutely aware of the effort and expense that goes into promoting your business’s marks. But you may not be aware of the substantial benefits of federal registration of those marks.

As a starting point, business owners should be aware that a federal registration is not necessary to obtain rights in a mark. Assuming your mark does not conflict with any other rights, such as an existing federal registration for the same or similar mark, “common law rights” arise automatically merely from use of a mark in commerce. These common law rights, however, are extremely limited, providing only the exclusive right to use the mark in the geographic territory where the mark is actually used.

Federal registration, on the other hand, provides nationwide rights, meaning that the owner of the registration has the exclusive right to use the mark for the goods or services set forth in the registration anywhere in the United States, subject only to any preexisting common law rights that might exist. As a practical matter, this means that the owner of a federal registration reserves the right to expand a business into any geographic area in the U.S. and prevent anyone else from using a mark that would be likely to cause confusion.

The only exception is a geographic area, if any, where another business has been using the same or similar mark for the same or similar goods or services prior to the filing date of the registration. In that area, the earlier user would have the right to continue to use the mark and, in fact, the right to stop others from using the mark in that geographic area. This highlights the importance of filing for federal registration sooner, rather than later, to eliminate the possibility of anyone obtaining common law rights in an area that your business may wish to one day expand. Even worse, if someone beats you to the trademark office by filing a registration before you, this may work to cut off the possibility of you expanding your business under your mark at all.

Another benefit that flows from federal registration is that registering a mark deters others from adopting a similar mark. It is common and highly advisable for businesses to hire an experienced trademark attorney to perform a search of registered marks before adopting a mark. If, upon a search, a registered mark is detected that is confusingly similar to the mark the client desires to adopt, it is likely that the attorney will advise his or her client to either modify the mark to eliminate confusion or choose a different mark altogether. Similarly, having a federal registration is beneficial because it will prevent anyone from obtaining a registration for a mark that is likely to cause confusion with your registered mark. The United States Patent and Trademark Office will deny registration to any mark that they believe is likely to cause confusion with a registered mark. The USPTO performs this policing work at no cost to the registration’s owner.

As a business expands, several other benefits result from having a federally registered trademark or service mark. Under the Madrid Protocol, a single U.S. trademark or service mark application or registration can be used to obtain protection in over 50 countries. This can be highly beneficial in that it saves a great deal of money, not only in application fees but also in costs associated with having to hire foreign associates to effectuate filings in foreign countries. Additionally, with respect to any business that may be concerned about the importation of infringing foreign goods, your federal registration can be filed with the U.S. Customs Service, who may, in turn, deny the importation of any goods bearing your registered mark. Finally, if the time comes to sell a business, a federally registered trademark can be an extremely valuable asset of the company and a driving force in determining an agreeable purchase price.

In situations where a business owner is forced to resort to litigation to enforce his or her rights in a mark against an infringer, having a federally registered trademark or service mark can literally be outcome determinative. First, a federally registered mark enjoys certain presumptions, such as that the mark is valid, that the registrant is the owner and that the registrant has the exclusive right to use the mark in commerce in connection with the goods or services specified in the registration. While these facts may be provable in court, it is far less risky (and less expensive) to prove them by reference to your registration than to try to prove it through documents and other evidence you may not even have. Furthermore, a federally registered mark that has become “incontestable” through continuous use for five years and the filing of a Section 15 affidavit cuts off numerous defenses otherwise available to an infringer. Finally, having a federal registration just plain looks good in court and eliminates the possibility of judge and jury being influenced or drawing conclusions from a decision not to register.

Given the benefits of federal registration—and the potential costs of not registering—it highly advisable to seriously consider registering your business’ marks. Isn’t it time you protected your rose?

Michael C. Petock is an attorney with the Phoenixville law firm of Petock and Petock, LLC. Petock and Petock, LLC handles business, intellectual property and litigation matters. Please contact us to find out how we help you achieve the results you need.