In our introductory post, Jess touched on “common law” trademark rights. Most business owners (I daresay all) are familiar with the concept of a trademark. The basic idea being that registering a trademark protects it from being used by other businesses. However, the trademark concept that most have in mind relates to Federal trademark registration through the US Patent and Trademark Office (USPTO).
You come up with a name, you hire a lawyer, you pay a substantial fee, and your company name is protected from all competitors, wannabes, and happy cases of coincidence.
In reality less than 5% of US businesses register trademark with the USPTO and trademark law is much broader than that. Under US Law, trademark rights are earned simply by using a mark in commerce. Federal registration through the USPTO is not required to begin using a trademark, or to establish rights in that mark.
“Use” of the mark entails many different actions, but essentially if a product or service is sold under a certain brand name, “common law” rights are created for that trademark. The theory behind this is that once the mark has been used, the public will recognize this product or service as originating from a specific company. “Common law” simply means that the rights are earned by use, and not a governmental registration.
There are a few other factors that come into play when determining common law rights. Common law rights are often called “rights of first use.” The reason being that in order to secure these rights, you need to be the first to use the mark in your industry and location.
Of course, as with most things pertaining to the law or government regulation, there are a few caveats. Among them is the fact that common law rights will not prevent other businesses from using your mark in other states, or in some cases, a different part of your own state. Furthermore, not all business names are protectable. Words that are generic or highly descriptive aren’t protectable at all. A deli with a generic name like “The Deli” wouldn’t be protectable under any section of US Trademark Law, since anyone who wanted to open a deli could have a legitimate claim to use those words.
That being said, in most cases the first person to use a trademark can prevent others from using the same mark, even if the first person never registered the mark. Even if a second party registers the mark federally with the USPTO, the first user would have superior rights in their geographic location. The owner of the unregistered trademark can even use the “TM” symbol to assert their claim to their rights to the mark. And if legal action is taken between two confusingly similar marks, priority will be given to whichever mark was in use first.
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