So maybe you’re just starting up a company and you’ve landed on a great name for your business. It’s a perfect name – it describes your business, it holds sentimental value, and it has already been incorporated into your website and letterheads. It’s safe to say that this is the name your business is meant to have and you’re ready to write it in stone.
This is when you start thinking about making your brand official and cementing your place in the market. You want to protect your brand and you’ve learned that the most straight-forward way how is to register your company name with the United States Patent and Trademark Office (USPTO). After all, what’s more official than the federal government?
But, wait. You’re a business owner. So that means you do your homework before you make any big decisions. You take to the internet and figure out what experts and fellow business owners are saying about trademarking. You want to know if registering a trademark is worth it and you want to know how trademarks work before jumping right into it.
So, without further ado, here’s what you need to know before you start investing too much time into your bright-eyed business:
You may be surprised to learn that you may already have rights to your trademark. If you have already started regularly using your company name, logo, or slogan, then you have common law rights to that trademark. This includes using your company name at the bottom of emails, handing out your business card with your company logo or advertising online with your slogan. Sure, your trademark isn’t in an official government database, but that doesn’t mean it’s meaningless. You’ve poured your blood, sweat, and tears into it, after all.
So what are common law rights, how do I know I have them, and what do they get me? First, you should be clear about what a trademark is so you know the rights associated with it. A trademark is any word, phrase, symbol, sound, or combination thereof that identifies and distinguishes your business. This could be your company name, logo, slogan, jingle, product name, etc. Common law trademark rights protect your company name, logo, slogan, etc. from being used by other businesses. These rights extend to other businesses using confusingly similar marks to yours. For example, if your company name is ideasPLUS and another competitor across town tries to use ideaPLUS, then that’s not okay. The competitor company may not be using your exact company name, but it’s close enough to confuse customers and is therefore off limits.
How do you know if you have common law rights? You have to have started using the trademark first. Unless unusual circumstances exist, common law trademark rights always go to the person or company that first used the trademark. So, if you started using the slogan “Polka Dots Mark the Spot” in 2010 and a competitor in the town over starts using that same slogan in 2012, then you win. You have the common law rights in that slogan and that means you can tell your competitor to find a new slogan.
So what do these common law rights get you? You’ve already read that common law rights allow you to tell a nearby competitor to stop using your mark if you started using it first. In other words, you have exclusive rights to your company’s name, logo, slogan, etc. But did you notice that you kept reading the words “nearby,” “across town,” and “the town over”? That wasn’t by mistake. Like all rights in the U.S., your common law trademark rights are limited. Specifically, your common law rights are limited to the geographic area where your trademark is used. This means if you’re using your trademark only throughout the southeastern United States, then a competing company may be able to use your mark in Oregon or Pennsylvania. You could tell a company in South Carolina or Georgia to stop using your mark, but a company in Philadelphia or Phoenix is free to use the same mark. They may even have their own common law rights to that trademark in their area.
But many business owners want more than common law rights for their trademarks. They want to register their trademarks with their state or with the USPTO to receive extra protection. As you may have guessed, federal registration protects your mark nationwide. So your competitor in Philadelphia can no longer use your mark. This is particularly useful for companies who want to expand in the future or have a customer base they want to tap outside of the geographic area where they are already using their mark. Additionally, the marketplace is becoming more digital and it’s becoming more common for distant companies to cross paths online.
Further, federal registration allows you to sue in federal courts and gives you the legal presumption that you have rights in your trademark. Through federal registration, you may also protect a trademark that you have not yet begun to use. You can file an intent-to-use application with the USPTO that allows you to claim your trademark without even having common law rights yet. This option buys you time without sacrificing your priority in the rights of that trademark.
In short, you may already have rights in a trademark now. These common law rights are valuable but limited. If you want to expand your rights, then federally registering your mark with the USPTO is the most useful way to secure your rights in your brand for years to come.
2. Not All Trademarks Are Created Equal
Trademarks have five levels of distinctiveness and each level receives a different amount of protection. The more distinctive a trademark, the stronger the mark and the more protection it amasses. The five levels of distinctiveness are: fanciful, arbitrary, suggestive, descriptive, and generic. Here’s a table defining these five levels of distinctiveness and the protection they’re afforded: