To acquire rights in a trademark, a person or entity must use a trademark for goods and services in commerce. Such rights, if built on use alone, also known as common law rights, are relatively easy to establish and afford a trademark owner exclusive rights to use the mark for the goods or services previously used and in an established geographic region. In comparison, registered trademark rights, secured by federal registration, provide a trademark owner with broader enforcement rights. Understanding the protection attached to each type of trademark allows an owner to make informed decisions about both use and the need to pursue and enforce its trademark.

Common Law Trademark Rights

Common law trademark rights are acquired by using a mark in commerce. Use in commerce means a trademark is used in connection with the selling of goods and/or services. Common law trademark rights establish priority of rights over any subsequent or “junior” users of the same trademark for the same goods and/or services. The owner of a common law trademark can take advantage of the ™ symbol after the mark to put the world on notice that it is using the mark as a trademark. While it is easy to acquire common law trademark rights, there are limitations to the scope of their protection, and they can be difficult to prove without adequate evidence to demonstrate the extent of use. Additionally, common law rights are geographically restricted to the boundaries of prior use. For example, if a clothing retailer based and largely operating in Philadelphia runs a business using a particular trademark in which the business gains common law rights only, the retailer’s rights can only be enforced against subsequent clothing retailers using the same or a similar mark in Philadelphia. In this example, it is highly unlikely that the retailer would be successful in enforcing its trademark rights against a South Carolina-based clothing retailer using a similar or even identical trademark. This retailer, however, could have success enforcing its rights if it had acquired registered trademark rights rather than simply relying on common law rights.

Registered Trademark Rights

A federal trademark registration affords the owner nationwide trademark rights for a mark in connection with specific goods and services in the United States. Like common law rights, federal trademark rights are acquired by using the trademark in commerce, but with the additional step of securing a trademark registration through the United States Patent and Trademark Office (the “USPTO”). Once registered, a trademark can carry the ® symbol to reflect its registered status.

While federal registration grants rights in a trademark which can be enforced across the country, the rights are limited to enforcement against identical and similar marks used in connection with similar or related goods and services. Returning to the example with the Philadelphia clothing retailer, let’s say the business had secured federal registration for its mark in connection with clothing such as t-shirts, sweatshirts, and pants. If a handbag retailer in Colorado began to use an identical or confusingly similar mark, it is likely the Philadelphia retailer would be successful in enforcing its federal trademark rights against the handbag retailer because the goods, while not identical, are related enough such that a consumer could reasonably believe that the goods are being offered by the same source. However, if there is a bakery operating under an identical or similar name, the Philadelphia retailer is unlikely to be successful in enforcing its rights because it is far less likely that consumers would think a clothing retailer also sells bakery goods. This limitation to the scope of trademark protection is important as it prevents the owner of a trademark registration from obtaining rights beyond the actual business and trademark use.

Federal trademark registration also brings certain benefits that common law rights do not. Owning a federal trademark registration gives the owner of a trademark registration presumptive evidence of a valid trademark in court. Registration carries significant persuasive value and unless the opposer challenges the validity of the registration itself, a trademark owner has a very low burden to prove its rights and ownership. It is important to note that this presumptive ownership is valuable in enforcing trademark rights as all levels of a dispute including those that arise long before litigation such as a cease-and-desist letter.

Federal registration also affords trademark owners the exclusive right to use the registered mark in commerce nationally. Functioning as a public record, the USPTO database puts all others on notice of the existing rights held by the owner of a trademark registration. As such, a junior user becomes obligated to know about the prior-existing trademark owner’s use and rights. Finally, owning a trademark registration can serve as the basis of a global trademark portfolio. Under certain international treaties, a federal registration in the U.S. can translate to the basis for a trademark registration in other countries that are members to such treaties.

Common Law Rights, Federal Rights, and Choosing a Trademark

Securing a trademark registration carries undeniable benefits which can be foundational to business development and growth. Still, both common law and registered trademark rights need to be considered when choosing a trademark. Conducting trademark clearance searches, which analyze trademark use ranging from federally registered use all the way to common law and even domain name use, is recommended as early as possible in the brand selection process. Trademark clearance is a critical step in avoiding the costs associated with pursuing the use and/or registration of an unavailable mark as well as the often hefty costs associated with infringing another’s trademark rights.

Regardless of where you are in the trademark process, attorneys at Heilbut LLP are prepared to assist you with everything from trademark selection to enforcement. Please contact us to learn more.