Types of Trademarking: Common Law, State, or Federal?

 

Many business owners aren’t aware of the different options available when it comes to trademarks, especially ones that do not require any registration or fees.

Before exploring the different types of trademarks, it’s important to understand what a trademark is. By definition, a trademark is “any word, name, symbol or device (or any combination thereof) that identifies and distinguishes the source of the goods of one party from another.”

In the US, there are 3 types of trademarks:

  • Common Law Trademark
  • State Trademark
  • Federal Trademark

Common Law

Contrary to common belief, you are not always required to register a trademark to receive protection.  By using your name or logo in commerce, you instantly gain common law protection. To prove this, your business must have evidence of the first use of its trademark (i.e. receipt of a product or service sold using that name or logo, or any record of a business registration).

However, a common trademark is only enforced in a certain geographic area. Here is an example:

If you only sell a product in Orlando, under a certain name, like BUBBLES other businesses are not allowed to sell the same type of product under the same (or similar) name within that region. However, if a competitor decides to sell similar products in Miami under the name BUBBLES, your common law trademark does not protect you in Miami and cannot prevent them from selling there.  In fact, you would not be able to expand into Miami because they were the first users of that trademark in that region.

First User Always Wins!

First user trademark law outlines that if your competitor decides to register BUBBLES with the state of Florida or federally, you (the first user in Orlando) will still be protected in Orlando and will be able to prevent them from selling similar products under your name, BUBBLES.

How  It Works:

By simply using the symbol TM, you claim common law trademark rights. The symbol TM could also signify that you have a pending application for federal trademark registration. By using TM on your trademarks, not only are you declaring your trademark rights, but you can also prevent copiers and competitors from using your trademarks on their goods or services.

Nonetheless, protecting your trademark requires proactive action! As the owner, if you fail to be proactive in enforcing your trademark, you could lose your trademark rights. This could look like taking some form of action if you learn that another business in your area is using your trademark, preferably advised by a trademark lawyer.

In summary, the common law pros:

  • No registration is required.
  • You can enforce it by simply using the TM symbol next to your logo.

whereas cons:

  • It only protects a certain geographical area.
  • You must enforce or take steps to prevent infringement or the loss of your trademark.
  • It does not protect your trademark statewide or nationwide.

 

State trademark

State trademark rights protect your trademark statewide. To register a trademark with your state, you must file an application with the state trademark office, which you can apply for once you start using the trademark.

Since state trademarks only protect within the state and don’t give you much additional protection to common law, it is not largely recommended. However, a state registration creates a record of the date that you began using your mark, which can be important in enforcing your mark and preventing a competitor from using a mark similar to yours. Additionally, it can be a strong source of evidence if you are accused of trademark infringement.

Pros:

  • Less expensive than federal, typically save at least $200for each registration.
  • Processed and approved quicker than federal.

 Cons:

  • State trademark registration only protects your trademark in the state where you register it.
  • State trademark registration does not give you the right to use the symbol ®. You may use either TM for a trademark or SM for a service mark.

 

Federal trademark

Registering a trademark Federally with the USPTO protects your brand and your intellectual property. You can notify others of your trademark rights by using the ® symbol.

Pros:

  • Legal ownership of the trademark and the right to use it nationwide.
  • Federal registration is superior to state registration
    • If a federally registered trademark was in use before a state registered trademark, the federal registrant can stop the state trademark owner from using the mark. If the state mark was in use first, the mark’s use may be restricted to the state where it was registered.
  • You may register a trademark with the U.S. Customs and Border Protection Service to prevent infringing products from being imported.
  • You may use your USPTO trademark registration as a basis for obtaining foreign trademark registrations.
  • USPTO’s database creates a public record of your mark and may help deter others from using it.

Cons:

  • The registration process could take several months to a few years.
  • Due to the complexity if this process, an attorney will most likely have to be hired.
  • Costs more than other trademarks (Approx. $275-$325, excluding attorney fees)

 

Process: To register a trademark with the USPTO you must provide the following information:

  • The name of the mark’s owner
  • The type of mark (Standard, Design, or Sound)
  • Search is trademark is taken
  • A drawing and a specimen of the mark
  • A description of the goods or services the mark is used for
  • A filing basis (in use or intent to use)
  • Pay a filing fee, electronic applications are currently $275–$325

 

Following that, your trademark application will be assigned to an examining attorney. If the attorney identifies issues with your application, you may receive an office action that you will need to respond to before your registration can move forward. A federal trademark application can take anywhere from several months to a few years to process.

In Summary:

  • Common law trademark may only protect you in your immediate locality.
  • State trademark registration can help protect your business name throughout your state.
  • Federal trademark registration with the U.S. Patent and Trademark Office (USPTO) protects your trademark nationwide, and along with a host of additional protections, which allows you to register your trademark in other countries and sue for trademark infringement in federal court.

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