How are trademark rights determined in the US?
In the US, trademark rights are generally given to the first one to use a mark. Except for a few limited circumstances, the first user is the rightful trademark owner in the US. A common law trademark refers to the rights belonging to the first person or company to use a particular mark on selling goods or services in a limited geographical area.
The term common law arises most frequently in the context of an unregistered trademark. So let’s look at what unregistered trademarks can and cannot do.
First-filer vs. First-user
US trademark rights go to the first-user. The winner is not the first one to think of a mark or the first to file. In contrast, many foreign countries give trademark rights to the first filer. US trademark law is different. That being said, there are several advantages to being the first-filer.
What can a common law trademark owner do?
Even without a registered trademark, a common law trademark owner can still have significant rights.
First, an owner of an unregistered mark can still sue others for trademark infringement, but with certain geographical limitations. Unlike patent litigation, there is no requirement that a mark first be registered before it can be enforced in trademark litigation.
Second, a common law trademark owner can oppose a trademark application or cancel a registration less than 5 years old. Again, there is no requirement that a mark be registered before it can be used to block or cancel the trademark filings of others.
Common law rights, however, have their limits. You cannot record a common law trademark with US Customs.
Since there is no single database of common law trademarks, it may be difficult to provide notice of your common law rights to others who have never purchased your goods or services. Competing businesses may begin to use similar marks because they simply have no knowledge of your unregistered trademark.
Common law rights as defense?
If you are on the receiving end of a cease-and-desist letter or a trademark lawsuit, your common law trademark can serve as a defense against infringement claims. However, you may have certain burdens of proof in showing your earlier trademark use and ownership of the mark which could have been eased with a registration.
Why bother registering a trademark?
There are several advantages to registering a trademark, particularly if you plan on using a mark for several years. The USPTO has a helpful page on why it makes sense to register your mark.
With a registered trademark, the USPTO becomes your ally. If and when third parties apply for registration of similar marks, USPTO trademark examiners (“examining attorneys”) may use your registration to reject their trademark applications. Imagine having the USPTO as your trademark police. They may be blocking trademark applications for similar marks without you even knowing.
A trademark registration gives you nationwide rights. The geographical scope of your trademark is significantly greater with a registration. Instead of limiting your rights to the territory where your services or goods have been sold, your trademark registration covers the entire US.
After five years, your trademark registration may become incontestable. While not exactly invincible, fewer grounds exist for challenging an incontestable registration. For example, others will not be able to challenge your registration based on their earlier usage or the descriptiveness of your mark.
A trademark registration also gives you certain legal presumptions which can shift the burden of proof to your adversary. Why not make them spend more time and money in proving their trademark rights?