During uncertain economic times, it may be tempting to forego the expense of filing for (or maintaining) a federal registration to protect a trademark, relying instead on common law rights acquired through use in commerce. This may be an appropriate protection strategy depending on the nature and geographic use of the trademark at issue. 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 to federal and state common law, where rights are limited to the geographic areas where the goods and services for the trademark are actually transported or sold. 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 of proof in a trademark infringement action and gives more weight to a claim of trademark infringement in a cease-and-desist letter. In addition, a federal trademark registration has the possibility of becoming “incontestable” after five years, which strengthens a registration by limiting the bases for attacking its validity. 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 ® with the trademark: owning a federal registration allows the trademark owner and authorized licensees to use the ® symbol with the trademark. This puts the public on notice of federal registration rights, which can help recover damages in an infringement action and may deter others from adopting the same or similar trademark by making them aware of your registered rights. The ® 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. Equally important, a federal trademark registration protects against the registration of a later-filed, confusingly similar mark by the USPTO, because the USPTO is obligated to conduct a search of its Register for prior applications and registrations for conflicting trademarks. However, this search would not capture a trademark that is in use, but not the subject of a federal trademark application or registration. Thus, it is important to register a trademark early to prevent a later-user from acquiring a registration for a trademark that is rightfully yours.
- Stop Counterfeit Goods at the Border: once issued, a federal trademark registration can be recorded with U.S. Customs and Border Protection (CBP) to block the importation of counterfeit goods, or goods bearing a trademark that infringe the trademark of the registration. Recording a federal trademark registration with CBP is inexpensive and renewable with the term of the corresponding trademark registration. 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 purpose of the certificate is to add another layer of trust and authentication to a brand’s email communications to ensure that bad actors are not able to fake a brand owner’s valid logo. 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 keep these benefits in mind as you consider how to best safeguard and enhance the value of your brand through related trademark assets.
