Trademarks are unique identifiers of a business's goods or services, and as such act as embodiments of a business's reputation and goodwill. Having a trademark registry and favoring registered marks has a deep history in Western culture, traceable to the ancient guilds that once controlled all aspects of commercial life.
The underlying purpose for trademarks has not markedly changed. Registration was designed to protect consumers from fraud and manufacturers from unfair business practices.
Registering Versus Not Registering
The value of trademarks in modern times accrues through use. They do not have to be registered with the U.S. Patent and Trademark Office (USPTO). Modern trademark law expressly recognizes unregistered marks as common law rights, but there are advantages to registration when it comes to enforcing rights that are not well known or clearly understood by small businesses and entrepreneurs.
Businesses of both registered and unregistered marks have legal recourse for infringement of their rights, and the remedies are equally available to both. The advantage of registration only immediately comes into focus in enforcing (or considering enforcement of) those rights. Whereas registered marks are decreed distinctive by virtue of their registration, presumed valid owners of unregistered marks must demonstrate distinctiveness and priority of use in commerce as a preliminary step to proving infringement.
Statutory Advantages of Federal Registration
Unregistered marks start with two infirmities: a) they may not be known to other users; and b) their use is not notice of the existence of a right. This is the reason that the unregistered right to exclusive use of the mark has to be proven as a preliminary step to infringement.
The Difficulty with Proving a Common Law Right of a Registered Mark
To establish an infringement claim for an unregistered mark is an expensive undertaking since it requires proof that a plaintiff really has a mark; and if so, then infringement may be decided. To prove the existence of a mark, a plaintiff has to offer proof of:
- the length and continuity of a mark’s use,
- sales, advertising, and promotional activities,
- expenditures relating to promotion and marketing,
- unsolicited media coverage, and
- sales figures.
If the proof is insufficient to establish either that the plaintiff has a mark, or if it does that the accused infringer has priority of use, then the case will be dismissed.
The Benefits of Registering Your Trademark
On the other hand, registered trademarks start with two significant advantages: a). once a mark is accepted for registration the world is on notice that no one else may employ the mark without permission of the owner; and b). distinctiveness and validity are presumed.
Manufacturers should be aware that the USPTO allows trademarks to proceed to registration only if they meet the statutory criteria. Dictionary words, geographic designations and personal names are generic and will be refused registration on the Principal Register unless they have already acquired statutory distinctiveness. The USPTO maintains two registers: the Principal Register and the Supplemental Register. Which register a mark lands on clearly makes an enormous difference, not only to enforceability of trademark rights, but also in combatting cybersquatting because in the case of cybersquatting, a mark on the Supplemental Register does not support an actionable claim.
The Principal Register is mainly populated with suggestive, fanciful and arbitrary marks that are regarded as “inherently” distinctive. Descriptive phrases may qualify as marks, and many have, but if they fail to meet the statutory criteria they may be eligible for the Supplemental Register, which is populated with marks that fail the statutory test. Notwithstanding this, the Trademark Act expressly provides that “registration on the Supplemental Register shall not constitute an admission that the mark has not acquired distinctiveness.” The reason for this statement is that the mark owner is not precluded in the event of a claimed infringement of proving that the mark is in fact distinctive by virtue of its having acquired secondary meaning in the marketplace.
There are advantages, too, for registered marks because after five continuous years of use they can be declared incontestable. U.S. trademark law provides that a mark owner may file an affidavit of incontestability if the mark “has been in continuous use for five consecutive years subsequent to the date … [of] registration.”
Do You Need State Registration?
Some businesses ask about state registration of a mark. State registrations will not get a business anywhere if challenged by a party with a mark registered with the USPTO and listed on the Principal Register. A state registration essentially protects businesses in the locality in which they offer their goods or services. The reason state registrations are discounted is that these marks are listed on state registries without examination.
In any event the Internet has made state registrations passé. The concept of local has been turned upside down. This is because businesses that occupy a location in cyberspace are likely to draw consumers significantly beyond their postal address. This is a further reason for businesses to register their marks and use those marks for their Internet space.
Gerald M. Levine is an attorney practicing in New York City. He is the author of the forthcoming, definitive guide and go-to handbook, Domain Name Arbitration: Asserting and Defending Claims of Cybersquatting Under the Uniform Domain Name Dispute Resolution Policy. He has a litigation and counseling practice and represents clients on a diverse range of legal and business matters from real property and commercial disputes to protection of intellectual property rights. He is on the panel of neutral arbitrators for the American Arbitration Association and a mediator for the Commercial Division of the New York Supreme Court, New York County; and the United States District Court for the Southern District of New York. He has published numerous articles on real estate, arbitration, trademark and cybersquatting.