A trademark is the personification of a company’s brand and reputation. Companies begin to build their reputations as soon as they open their doors for business. Yet many companies do not appreciate the significance of proper trademark protection at the outset. All too often, companies file the necessary paperwork to incorporate their business but neglect to take the additional step of registering their business names or trademarks with the United States Patent and Trademark Office (USPTO).
Failing to register a trademark can have devastating consequences on a company’s brand and bottom line. The good news is that these consequences can be avoided. Obtaining a federal trademark is a relatively inexpensive tool to protect your brand and avoid the detrimental consequences of a successful trademark infringement lawsuit against your business.
What is a Trademark?
A trademark is a word, phrase, symbol, or design used to identify and distinguish a company’s goods or services from those of others (e.g., Apple, McDonald’s, the Nike “swoosh” and “Just Do It” slogan). In the United States, you can acquire common law trademark rights simply by using your trademark in commerce. But such common law trademark rights are limited, and they only apply to the geographic area where you actually provide goods and services. By contrast, registering your trademark with the USPTO provides the presumption of rights throughout the United States.
What are the Benefits of Trademark Registration?
Possibly the most valued benefit of trademark registration is the associated nationwide priority. This means that, following registration, nobody can legally adopt your mark in connection with the same or similar goods and services throughout the United States. Anyone that does adopt the mark despite the existence of your registered trademark can be stopped via a trademark infringement lawsuit or other administrative action. Accordingly, obtaining national priority is critical for ambitious thinkers who wish to expand their business beyond their initial trade area.
Trademark registration also creates a public record of your trademark. This provides actual or constructive notice to anyone searching for similar trademarks and will deter future users from adopting your trademark. Furthermore, the USPTO will police others from adopting a confusing mark and reject trademark applications for the same or similar marks prior to registration, which adds an additional layer of protection. Other benefits include: the right to bring a lawsuit concerning the trademark in federal court; the ability to use your registration as a basis for filing for trademark protection in foreign countries; and the right to use the federal trademark registration symbol, ®, with your trademark to show that you are registered with the USPTO.
What are the Downsides of Failing to Register Your Trademark?
Although you are not legally required to get a registered trademark for your business name or brand, a registered trademark is the only way to protect your name or brand securely. By choosing not to register your trademark and doing business by the use and promotion of your business names and logos, you could be infringing on another trader’s registered trademarks. Ultimately, you could be found in violation of trademark laws, which may result in you having to stop trading under all relevant names, logos, and associated assets. This could have an expensive and detrimental effect on your entire business. So, it makes no sense to invest time and money into building your brand, which may include signage, products, uniforms, an online presence, marketing, and advertising – only to have to start all over again because you did not properly protect your business with a registered trademark at the outset.
By not protecting your business with a registered trademark, another trader can start using a similar name to yours in your industry, and you may have no power to stop them. An unregistered first user of a trademark can often claim trademark rights within the relevant geographic area in the United States; however, it cannot stop another from using the trademark outside of the unregistered first user’s specific town or city. So, while unregistered trademarks enjoy certain limited rights, the best approach is to register your trademark. This is particularly true if there is any possibility that you might expand, open additional locations or do business outside of your specific region.
In sum, companies devote significant time, money, and expense building their reputations and brands. Every company, especially new businesses, should consider the above benefits and downsides and take
appropriate action to protect their intellectual property