Small Business Owners: Why Bother with Filing a Trademark?

Here’s why small business owners need to take the necessary steps to file trademarks.

I know what you’re thinking:  You’re thinking: “Why bother with filing a trademark?”  And, your next thought: “Even if I need to file, why use a lawyer?”  And then: “Who needs a trademark lawyer?  The website makes it look easy!”

Let me tell you why.

First, U.S. trademark rights are based on the first to use, and the continuous use of a trademark (for goods) or a service mark (for services) in interstate commerce.

Unlike the trademark laws of many other countries, in the U.S., your rights are based on a “race” to actually use the trademark, rather than a race to be the first to file an application with the U.S. Trademark Office. There are some exceptions to this “race to use” rule: Applications can be filed based on an intention to use a trademark.

Also, there is, initially, no “use” requirement with respect to applications based on trademarks registered outside the U.S. (I’ll explain this in more detail later). Now, it should be known that trademark owners do not have to file for registration in order to have the right to sue for the infringement of their mark, but registering a mark has many attractive features, the most important being that it can save a trademark owner a lot of money.

If someone came along with a trademark that is similar to your trademark for similar goods or services and were “likely to confuse” the relevant consumers to think your goods or services are sold by the newcomer, you would then have a claim for trademark infringement.

And, with a claim in hand, you could send a letter and tell the malevolent Infringer to stop their bad conduct.  (Lawyers like to say, “cease and desist,” which, basically, means “stop” and “don’t ever do that again.”)

Semantics aside

Semantics aside, if you send a letter demanding that an infringer stop confusing your customers with their “likely to confuse,” similar trademark, and you don’t have a federal trademark registered with the U.S. Patent and Trademark Office (that is, the USPTO), well, whoever receives that letter might respond (if they respond at all), “So what?

Prove it, my friend.

Show me how long you have been using your mark and where you’ve been using it, and your sales, and receipts, and the amount you spent on advertising it, and we can have our attorneys argue (you pay yours; I’ll pay mine) over whether that constitutes enough ‘use’, and whether your ‘use’ began before mine, and whether your ‘use’ is limited to the geographic areas where you sold your goods, and THEN maybe you can’t stop me from using MY trademark.”

Not a terrific outcome.

Now, take that same cease and desist letter and attach a copy of your trademark registration, which is listed on USPTO’s Principal Register.

(A mark listed on the Principal Register is afforded a lot more protection than a mark listed on the Supplemental Register).

Or, the letter can merely recite the Registration Number, and then the Infringer can go online to www.uspto.gov to find the registration for themselves.

Trademarks can prevent lawsuits

In any event, if you can metaphorically wave that trademark registration — that mere piece of paper — at that Infringer, you can tell them, in that same letter, that you have trademark rights that are superior to their rights. And that, if the infringer doesn’t stop using your mark, you can sue them.

And, if you sue them, you are more likely to win than if you did not have a registration, and then you could (under certain circumstances) be awarded statutory damages (up to three times the infringer’s profits from improperly using your trademark) and the attorneys’ fees and costs you might spend in any lawsuit to enforce your trademark rights.

And, being able to THREATEN someone with a lawsuit that could succeed, can SAVE YOU THE MONEY of having to bring a lawsuit.

However, be sure that your trademark “use” pre-dates the alleged infringer’s use before sending the letter, because, if their use pre-dates YOUR use, you can be sure that they’ll tell you to stop and don’t do that again…

Four key trademark points:

1.  Your lawyer should do a comprehensive trademark search, and analysis of the search results, before you roll out your product or file for registration; that way, you know beforehand whether you are stepping on the toes of a prior user BEFORE you go to market.

2.  If you are not “using” the trademark to promote your goods and services in interstate commerce, you can still file a trademark application on an “intent-to-use” basis.  The application takes several months to get approved; you get six months from approval to start using the mark in commerce, or to request up to six 6-month extensions to use it; and when you finally file proof that you are using it, your registration is effective retroactively to the date you filed.

3.  If you have a trademark registered in another country that has a trademark treaty with the U.S. – which includes most of Latin America – you don’t need to file proof that you are using the mark in the U.S. until five years after registration.

4.  Finally, it may look easy to file for trademark registration online, but it can be very costly if the filing is done incorrectly. You will then have to hire a lawyer to fix everything, so my advice is not to do the filing yourself, but to get an experienced trademark attorney to work with you to make sure that your mark qualifies for trademark protection and that the filing is done correctly.

Related content:

Small Business Start Ups- Making It Legal 

WHAT’S IN A [TRADEMARK] NAME?  

Legalities of Mergers and Acquisitions