Common Law Trademark
In the United States, while it is strongly advised that businesses and individuals register their trademarks with the U.S. Patent and Trademark Office (USPTO), it is not required in order to have trademark rights. Simply being the first to use a trademark automatically confers certain rights within the region that the trademark is being used. In fact, many federal trademarks started out with common law rights.
Unfortunately, there are also some serious drawbacks to utilizing unregistered trademarks. The level of protection provided under the law is minimal when compared to federal registration. Even with certain limitations, there are still rights established under common law trademarks.
What is a Common Law Trademark?
A common law trademark exists once you start using a trademark in front of the consumer. You must be the first to use the identifier in that region, and you should claim ownership by utilizing the unregistered trademark symbol (i.e. superscript TM or superscript SM for service marks).
To secure common law protection, your trademark must be capable of distinguishing your goods or services from those of another and it must be in commercial use. To be sure that your trademark is eligible for common law protection, you should chose a strong trademark and do a trademark search.
Common Law Trademark Rights
By being the first to use a specific brand identifier in commerce, you will establish common law trademark rights. This means that you have exclusive rights within your region to utilize the identifier in sales, marketing, production and other aspects of your company.
A common law trademark may also protect you if someone later files a federal registration. The company that is listed in the USPTO’s register will certainly have more expansive rights including rights in other states. If they sue you for infringement, though, proving that you’ve established commercial use may allow you to keep your trademark. Unfortunately, you may be blocked from expanding outside of your current region.
The drawbacks to choosing common law trademark rights over federal protection include:
- No national protection: Your rights will only extend to the areas in which you do business.
- Not listed in Register: Not being listed in the Principal or Supplemental Register makes it less likely that others will know your trademark exists.
- Inability to use symbol: The registered trademark symbol (®) conveys a higher level of protection to potential infringers.
- Lack of Presumption of Ownership: Without a federal trademark registration you do not have a legal presumption of ownership.
Common Law Trademark Search
One of the most important steps in gaining trademark protection of any kind is to conduct a trademark search. The focus of performing a clearance search is to ensure that similar brand identifier is not already in use. Some budding entrepreneurs skip this step since it’s not required. It only takes this one mistake, though, to land you in court for infringement. If you begin use of a trademark that is already registered or in use, you will not acquire any common law rights. Instead, you will be exposing yourself to a trademark infringement claim.
There are a variety of benefits of performing a common law trademark search:
- Save on production costs: If you manufacture products or produce marketing materials featuring a trademark that’s already in use, you’ll likely have to destroy infringing materials and start over.
- Keep your reputation: You will have to come up with another trademark if it’s discovered that you’re violating another party’s rights. This means you’re starting from scratch to build brand reputability.
- Avoid court costs and damages: Infringing on another common law trademark will likely result in a cease and desist letter or litigation where you could be held financially liable for damages.
Since these clearance searches aren’t required for protection, you may opt to perform them on your own. If you choose to do so, you’ll also need to search for existing trademarks that are similar to your own. A brand seeking to use the word Dura-flex, for instance, should search for terms such as Durflex, Pura-Flex, Duraflexion and comparable variations.
The prospect of performing a complete clearance on this scale is daunting. If you’re seeking federal protection for your brand identifiers, searching the USPTO database alone isn’t enough. Even though you’re seeking nationwide registration, it doesn’t preempt the rights of those with common law trademarks. A search with the USPTO will also not show identifiers listed on state registries. Because of these nuances, a common law trademark search should be conducted by a trademark lawyer.
Whether you’re seeking federal protection or want to establish a common law trademark, a thorough clearance should always be the first step. No central database for unregistered brand identifiers exists, so extensive searches are necessary to ensure you don’t infringe on another party’s trademark.
Common Law Trademark Infringement
Even unregistered brand identifiers can be valuable, so it’s important to quickly respond to common law trademark infringement. Like those with federal protection, you could lose rights over your trademark if you fail to properly police misuse and respond appropriately to violations. Even if you can’t secure monetary compensation, stopping further devaluing of your brand identity can be invaluable.
Federal lawsuits regarding unregistered brand identifiers are rare, but the possibility does exist. The lack of a federal registration means you will not have a presumption of ownership, but you can still sue an infringer for trademark infringement since the Lanham Act allows for lawsuits based on unregistered trademarks. If proceed with trademark litigation under this federal law, you may still be eligible to recover financial compensation and a judge may still issue a trademark injunction that prevents the infringer from continuing its activities.
There are trademark monitoring services available even if your branding isn’t registered with the USPTO. This will help you identify instances of infringement so you can quickly take action. Foregoing the process isn’t advisable since over 80% of companies experience trademark infringement.
If you must monitor your own trademarks, consider the following:
- Google Alerts: Using Google alerts can notify you of potential infringement.
- Search Amazon: Trademark infringement on Amazon is a serious problem. Periodically enter your brand identifiers into their search tool to find possible violations.
- Monitor your industry: If trademark infringement occurs, it’s likely within your own industry. Keep tabs on competitors and national brands to ensure your intellectual property isn’t misused.
- Google Ads: Competitors can target potential clients by using your trademark in Google Ads. The system can also show you who is doing this.
Once instances of trademark infringement are identified, it’s important to take immediate legal action to preserve your rights. This typically include send a trademark cease and desist letter or filing a lawsuit. Here are just a few common defenses to claims of common law trademark infringement:
- The defendant’s use of the trademark predates that of the complainant.
- The plaintiff has waiting to long to take action which is called laches.
- Abandonment through disuse has occurred.
- The trademark is merely descriptive.
Common Law Trademark Cease and Desist Letter
Over 97 percent of legal disputes never end up in the courtroom, and this is at least partially attributable to cease and desist letters. These are used in various areas of the law. When it comes to trademarks, they serve to notify infringing parties that their use of a brand identifier is infringing on a prior use. This is often enough to end trademark infringement, so it’s typically done before litigation is considered.
Infringers may believe your decision to not federally register your brand identifier means you won’t defend your IP. A common law trademark cease and desist letter lets them know otherwise. For such a warning to be effective, though, there are several pieces of information that must be included:
- Both parties’ contact information.
- Trademark information (e.g. specific trademark, date of first use, proof of ownership).
- Dates and circumstances of infringement.
- Demand that infringing activity end (i.e. cease).
- Demand that infringing activity not resume (i.e. desist).
- Explain legal action that will be taken if violations continue.
- List a deadline by which you expect a response (typically 10 days).
While you could contact the infringing party informally (e.g. Facebook, phone), this will not necessarily establish an evidentiary trail. An ignored common law trademark cease and desist letter could qualify as proof that infringement was willful. If your case qualifies for financial compensation, this could mean higher court awards.
For issues related to common law trademarks, or if you are interested in seeking federal protection for your trademark, please feel free to contact at any time.