BitLaw Guidance

What is a Trademark and When do You Have One?

A trademark is essentially a brand name. It represents the goodwill of a brand and its association with particular goods and services in the eyes of a consumer. For example, Apple has tremendous goodwill with consumers for its Apple trademark as used on consumer electronics such as personal computers, tablets, and the iPhone. Protecting a trademark or potential trademark with federal registration ensures that the trademark and its associated goodwill are protected and recognized on a national level. A trademark can be a word or phrase, a logo, or even a sound or a color (see Bitlaw's discussion on trademark devices for more information on the forms that a trademark can take).

What is a "Common Law" Trademark?

The term "common law" indicates that the trademark rights that are developed through use are not governed by statute. Instead, common law trademark rights have been developed under a judicially created scheme of rights governed by state law. Common law rights may be afforded to any word, phrase, image, etc. that a business uses in commerce to identify itself, its goods, or its services. Such rights are granted automatically upon use and extended to whoever can prove the first actual use of the mark in a given geographical area (e.g., within a specific state or region).

Federal registration, a system created by federal statute, is not required to establish common law rights in a mark, nor is it required to begin use of a mark. However, federal registration, if available, is almost always recommended and gives a trademark owner substantial additional rights not available under common law. See Bitlaw's discussion on common law trademarks for more information on the trademark rights provided even without federal registration.

If Trademark Rights Exist without Registration, why Federally Register?

Many companies, particularly those operating exclusively on a local level, may not feel a need to seek out federal registration of their potential trademarks. Such companies might be content to rely on state trademarks laws and common law protections. Yet, in this day and age, where even the smallest and most local of businesses find themselves forced to offer their products and services online, "local" entities frequently find themselves thrust into the national and international marketplace of the Internet. On the Internet, common law protections may be insufficient to protect a brand from predatory competitors and even cyber-squatters seeking to extort payment in exchange for freeing up a domain name that a local company failed to register.

In this age of the Internet, one of the most significant reasons to file for federal trademark registration is to ensure the greatest degree of protection possible for a domain name. By federally registering a mark, the owner of that mark is given preferential treatment in any domain name dispute brought before the Internet Corporation for Assigning Names and Numbers (ICANN). Thus, by registering your mark, you are not only protecting your brand from others who might seek to use or abuse your brand’s goodwill, but also helping to ensure your ability to use that brand designation as a domain name over those who would seek its unscrupulous use.

In the end analysis, however, the most important reason for registering a mark with the United States Patent and Trademark Office is to place both consumers and potential competitors on notice that your mark is federally protected. Once registered, you are allowed to designate your mark with a registered trademark symbol (®) to indicate that the mark is, in fact, a registered trademark. This puts potential competitors on notice that should they infringe upon your mark. You have the right to file a federal trademark infringement action and to obtain remedies as a result of their infringement. Those remedies may include the infringer’s profits as well as other damages, and, in some cases, even tripled damages and attorney fees. These enhanced remedies are usually not available for unregistered, common law trademarks.

Thus, considering the fairly minimal cost of filing for a registration vs all the benefits that a registration bestows upon the trademark owner, we usually recommend federal registration for the trademarks and service marks for the vast majority of businesses, enterprises, and even individuals.

A Video Explanation from the U.S. Trademark Office

The USPTO has created a brief (eleven-minute) video that explains the importance of trademark registration, how registered trademarks differ from common law trademarks, and a bit about the registration process. The video is embedded below, and can also be found on the USPTO's own site.

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