A Reminder of the Benefits of a Federal Trademark Registration – Sterne, Kessler Goldstein & Sterne P.L.L.C.
In uncertain economic times, you may be tempted to forgo the expense of filing (or maintaining) federal registrations to protect a mark, and instead rely on common law rights that are acquired through commerce. It may be appropriate to use this strategy depending on the nature of the trademark and the geographic area in which it is used. However, it is important to remember that a federal trademark registration on the Principal Register offers numerous advantages, which span from defending against trademark infringement to building consumer trust and expanding your business.
The following are some key benefits of owning a federal trademark registration – some as old as the Lanham Act and some new(er) as the marketplace and technology have evolved:
- Nationwide Notice of Rights: a federal trademark registration provides constructive notice of the registration owner’s rights in the trademark throughout the United States as of the registration date. This prevents infringers of your trademark from claiming that their later use of the same or confusingly similar trademark was innocently adopted.
- Nationwide Constructive Use: in addition to constructive notice of nationwide rights, the trademark of a federal registration is afforded a nationwide “constructive use” date as of the filing date of the underlying application. Compare this with federal and state common laws, which limit rights to the geographic area where the goods or services that are the trademarks are actually transported or purchased. This is a key distinction under the first-to-use trademark system of the U.S., which gives the first user of a trademark priority over later users.
- Legal Presumptions: with federal registration comes the presumptions of validity and exclusive ownership of the trademark for the goods and services identified in the registration. This reduces the burden on proof in a trademark action and gives greater weight to a claim for trademark infringement made in a cease-and desist letter. A federal trademark registration can become “incontestable”, which limits the grounds for challenging its validity, after five years. This, in turn, may compel an infringer to capitulate to the registration owner’s demands or to move more quickly to the settlement table.
- Federal Court and Statute: by statute, a federal trademark registration allows the owner to bring an action for trademark infringement in federal court and, in certain instances, to seek enhanced damages and attorney fees. The registration owner is also entitled to statutory damages in the case of counterfeits of the trademark at issue, relieving the trademark owner of the need to show actual damages to receive a monetary award.
- Ability to use (r) with the trademark: owning a federal registration allows the trademark owner and authorized licensees to use the (r) symbol with the trademark. The public is notified of the federal registration rights. This can help recover damages for infringement and deter others from adopting a similar trademark. The (r) is also a well-known symbol to consumers, helping them to distinguish between goods and services emanating from multiple sources and imparting the impression of legitimacy or “the genuine article.”
- Other Deterring Effects: a trademark on the Register of the U.S. Patent and Trademark Office (USPTO) would be easier to locate in a trademark availability search and could deter a third party from adopting the same or confusingly similar trademark, heading off a consumer confusion issue in the marketplace before it begins. A federal trademark registration is also important because it protects the USPTO from registering a confusingly similar trademark that was filed later. This is because the USPTO must search its Register to find prior applications and registrations of conflicting marks. This search will not capture trademarks that are in use but not the subject a federal trademark registration or application. Stop Counterfeit Goods At The Border:
- Once issued, a federal registration can be recorded at U.S. Customs and Border Protection to block the importation counterfeit goods or goods bearing a mark that infringes the trademark of registration. It is cheap and renewable for the same period as the trademark registration to record a federal registration with CBP. It also lets CBP police the trademark to prevent infringing goods from ever reaching the marketplace.Basis for International Registrations:
- a federal trademark registration can also serve as the basis for an application to register the trademark in foreign countries, potentially with priority dating back to the filing date of the registration.Protection Against Infringing Domain Names:
- while a federal trademark registration is not required to object to third-party use and registration of a confusingly similar domain name under many of the dispute resolution mechanisms (including the Uniform Dispute Resolution Policy), a federal registration makes it easier to demonstrate that the Complainant owns rights in the trademark on which the dispute is based. This can be very important where the trademark at issue might otherwise be subject to arguments of mere descriptiveness, or primarily merely a surname, trademarks which are not subject to protection absent a separate showing in the Complaint of acquired distinctiveness.Brand Registry Benefits:
- Several e-commerce brand registries, such as Amazon’s and Walmart’s, require a pending or registered trademark to participate. With a federal application or registration, a trademark owner can enroll in these registries to gain access to tools and resources for managing and optimizing the brand (trademark), including reporting infringements of the trademark and requesting takedowns of infringing products on the e-commerce platform.Verified Emails:
- many brand owners whose email communications are subject to spoofing or phishing are now relying on digital certificates, including a Verified Mark Certificate (VMC), which are used as part of an identification record to allow a brand to display its logo adjacent to a message by email providers like Gmail and Yahoo!. The certificate’s purpose is to add an additional layer of trust and authenticity to a brand’s email communications in order to prevent bad actors from being able to fake the valid logo of a brand owner. However, in order to obtain a VMC, a brand owner must own a federal trademark registration (or a registration from another specified trademark register) to allow the registered logo to be certified.Brand Expansion and Collaborations:
- considering the presumptions and other benefits discussed above, a federal trademark registration can be leveraged to negotiate a license with a third party to expand the trademark into other product and service areas, or to collaborate with other brands. A federal trademark registration signifies a variety of legal protections, which can enhance a trademark’s reputation and value, making it more attractive to potential business partners to solidify and monetize these types of deals.Increased Asset Value:
- we know a trademark can be a crucial asset in business valuations. For the reasons discussed above, a federal registration can increase the value of a trademark to the business itself, or to an interested purchaser.Federal registration of a trademark has the potential to impact multiple facets of a brand throughout its life. We encourage you to consider these benefits as you think about how to enhance and protect the value of your trademark.
