Trademark law is an area where popular perception deviates substantially from legal reality. A guest writer explains that too many companies waste time, energy or money pursuing a registered mark. But it can be necessary, too.
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Trademark law is an area where popular perception deviates quite substantially from legal reality. Far too many companies regularly waste at least some time, energy or money pursuing a trademark or a service mark that turns out to be unnecessary, or which is abandoned within a few years. Business leaders often believe that registering a trademark will provide protection for their brand, and it can, but one should remember that the purpose of trademark law is not actually to protect businesses, but rather to prevent confusion in the marketplace.
1. Know when you might need a trademark
To have a trademark or service mark you need three things: a product or service; a distinguishing word, phrase, symbol or design used in conjunction with that product or service; and the product/service and the mark must be used in commerce. The purpose of the mark is to help consumers identify the source of goods or services in the marketplace.
2. Review the difference between common law and registered marks
A common law mark exists as soon as the mark (a word, phrase, symbol or design) enters commerce in connection with the provision of a product or service within a certain geography (a state), provided nobody else is already using a similar mark for the same type of product or service in the same geography.
So, if you start selling your new type of widget under the mark “Squidget” here in Maine, you have a common law mark for Squidget in relation to widgets in Maine. Moreover, with your common law mark, you could sue to prevent anyone else from selling widgets under the Squidget mark in Maine. As you sell into other states, you create common law marks there as well.
A mark can also be registered, both at the state and federal level. At the U.S. Patent and Trademark Office, marks can be registered before or after they have come into existence under the common law. Registering a common law mark is sort like recording a deed in your county registry – you already own the mark, but by registering it you put the world on notice, and providing evidence that you owned the mark as of a certain time. Registering a mark with the Patent and Trademark Office also effectively grants the mark’s owner the equivalent of a state mark in all the states they have yet to sell into.
3. Consider how enforcement comes into play
The dirty secret of trademarks is in regards to enforcement. Outside of the registration process, where the examiner could nix an application because of confusion with an existing mark, the government does not enforce trademark — the mark’s owner must provide their own enforcement, and such litigation can be quite expensive.
There is also the important caveat that other companies may actually have a valid preexisting common law mark despite your registered mark. Back to our Squidget example. Let’s say you registered your Squidget mark with the Patent and Trademark Office in 2020. However, some smart fellow in Delaware has been operating the Squidget Widget Co. (SWC) since 2005, selling Squidget all across the capital region. You can use your mark to block SWC from selling its Squidgets here in Maine, and anywhere else they have not yet done business, but they can continue to do business in their established markets.
4. Assess your financial situation and priorities before registering
Registering a mark may be a critical use of your business’s limited funds as well as a drain on your time and energy. A registered mark may have some value as a deterrent against new entrants, but what if your competition is well-established and well-funded? If so, ask yourself how critical the mark is to your business strategy. If the mark is challenged, would you need, and can you afford, to litigate? If the answer to either question is no, then registering the mark may not be the best use of your funds at this time.
Sage Friedman is an attorney at Murray Plumb & Murray in Portland, practicing business and corporate law, litigation and commercial real estate law. He can be reached at sfriedman@mpmlaw.com.
