Common Law Trademark

Common Law Trademark

Your trademark does not need to be federally registered in order to receive some degree of protection under common law trademark laws.  Similarly, you could be infringing on another existing common law trademark without realizing your usage constitutes a violation.

What is a Trademark?

A trademark is any word, phrase, logo, or design that is used to identify the source of products or services. While most trademarks are brand names or slogans, trademarks can also be colors, smells, or  sounds. As long as the trademark is used to identify the company and is not considered generic or descriptive, it can qualify for registration.  Trademarks that are successfully registered with the United States Patent and Trademark Office (USPTO) are afforded a higher degree of protection. Trademark registration lasts as long as the trademark is in use in commerce.

The purpose of trademark law is to protect both the business and the consumer. On the consumer’s side, a trademark allows them to make informed purchasing decisions and recognize the source of the products they are buying. On the business side, trademarks prevent other businesses from misusing a brand and potentially causing harm to your company’s reputation.

Common Law Trademarks

A common law trademark is a trademark that has not been registered with the USPTO. Trademarks that are currently pending registration may already have common law protection. Common law trademark protection begins the moment you start using the trademark in conjunction with selling goods or services. This protection is limited to the particular geographic area that the trademark is being used.

Common law dictates that whoever used the trademark first has presumption of ownership. In order to prove infringement, you would need to show that customers are likely to be confused between the two trademarks at issue. For example, consumers could reasonably assume that two jewelry stores with identical names in the same town are owned by the same company, even if neither brand name is federally registered.

It’s important to note that common law protection only extends locally. If you own a coffee shop named “Mug Shots” in Sacramento and have not applied to register the trademark federally, another company may be able to operate a café with the identical name in Houston. This could be particularly detrimental to your business when attempting to advertise on social media or if you later decide to expand into other states.

The Benefits of Registration

There are several benefits to federally registered trademarks that do not apply to common law trademarks. Below are the biggest reasons you should federally register your trademark.

  • Nationwide protection: The scope of common law trademark protection is limited to specific geographical areas. You’ll want to have room to expand your company, even if you are only currently operating a local business. It’s much easier to do this with a federally registered trademark.
  • Notice of registration: Once you have filed a trademark application the information is available for all to see. This will alert other businesses that your trademark is protected, which could deter future infringement activity.
  • Increased ability to recover damages: If your trademark is federally registered and an unauthorized usage occurs, you have a better chance to recover damages. These damages could include the profits gained through the misuse of your trademark. In exceptional cases, you may also be able to recover your attorneys fees.
  • The ability to use the registered trademark symbol (®): You can use the registered trademark symbol (®) in conjunction with your trademark after registration. This alerts others that your trademark is federally registered. Doing so prevents others from being able to invoke an ignorance defense about the registration of your trademark should an infringement case go to trial.

Additionally, you may be more susceptible to infringement in the future with a common law trademark, as companies might take your lack of federal registration as a sign you do not take the protection of your brand seriously. Because litigation regarding common law trademarks is more rare, infringing parties might believe you are unwilling to invest in the cost of a trademark lawsuit. Accordingly, you will have to be even more diligent about monitoring your trademark against infringement if it isn’t registered.

Trademark Symbols

There are two types of trademark symbols that will denote whether a trademark is registered or not. While the placement of these symbols might often seem like a trivial afterthought, these marks actually carry weight and can deter infringement.

  • The registered trademark symbol (®): The registered trademark symbol denotes that the trademark has been successfully registered with the USPTO. Many businesses mistakenly use this symbol without the proper registration. These misuses are often innocent, as companies falsely believe they can use the symbol immediately after submitting an application. They could also be confusing the rules with other intellectual property, like the copyright symbol which can be used immediately.
  • Common law trademark symbol (™): The common law trademark symbol consists of the letters “TM” in superscript. You can begin using the symbol as soon as your trademark is in use in commerce.
  • Common law service mark (℠): The service mark symbol is less commonly used, and is used to denote registered trademarks for services, as opposed to goods. Most companies will use the common law trademark symbol to cover both goods and services.

Common Law Trademark Infringement

It is your responsibility to monitor the usage of your common law trademark. You can enforce your rights, assuming that your company was using the trademark in question first. Without federal registration of your trademark, your damages may be limited in an infringement lawsuit. However, you can send a cease and desist letter to the infringing party. A cease and desist letter alerts the infringer about your common law trademark rights, and warns that you may pursue legal action if the unauthorized usage of your trademark does not cease for good. In order to constitute a cease and desist order, the letter shouldinclude the following information.

  • Contact information of both parties
  • Information about the trademark in question, including dates of first usage
  • Proof of infringement, with the dates
  • Order to cease and desist all infringing activity
  • A warning that any further infringement will result in legal action
  • A deadline for a response, which is typically 10 days after the letter is received

A cease and desist letter is more likely to garner a positive response if it is sent by a trademark attorney rather than the owner of the trademark.  More specifically, the letter will have the most weight if it comes from a trademark lawyer that litigates.  Often, a cease and desist letter is sufficient to halt the infringing activity. However, should the infringing activity continue or the letter be ignored, your best bet might be to pursue legal action. You should consult a trademark attorney about the right course of action depending on the circumstances of your case.

How to Avoid Infringing on Common Law Trademarks

Not performing due diligence on common law trademarks before selecting your own trademark might prove to be disastrous for your company. Assuming you are not sued for trademark infringement, you could face heavy costs in having to retool your brand should you later discover a conflicting trademark down the line.

The best way to avoid trademark infringement is to have a trademark lawyer conduct a trademark search before committing to your desired trademark. Your first step in doing this is to run a search on the USPTO’s database, the Trademark Electronic Search System (TESS). This will alert you to any existing trademark that is federally registered or pending registration.

A TESS search will not show you existing trademarks protected by common law. Many times, a simple Google search with your desired trademark and geographic region can warn you about common law trademarks in the area.

Common Law Trademark Litigation

Common law trademarks can be litigated just like registered trademarks but the trademark owner does not have the presumption of ownership that is granted with a federally registered trademark. Still, under the Lanham Act you are permitted to sue for trademark infringement even if your trademark isn’t registered.

Pursuing this option might result in the courts enforcing an injunction against the infringing party, but you are less likely to be eligible for damages.

Common Law Defenses in Litigation

If you receive a cease and desist letter regarding the unauthorized use of a common law trademark, there are a number of defenses you can invoke.

  • You were using the trademark first. This is the best defense you can use if you are accused of trademark infringement, provided you have proof that you were using the trademark before the plaintiff.
  • The trademark in question is too generic or descriptive to receive protection. Generic words cannot be protected under trademark law, and descriptive trademarks may have limited rights. If the trademark in question falls under either of the two categories, you may be able to argue that the plaintiff is not entitled to any common law trademark rights. Keep in mind that descriptive trademarks include trademarks with proper names, like “Miranda’s Hair Salon” or “Smith’s Tires.”
  • The plaintiff was unreasonably delayed in enforcing its rights. The term “laches” refers to the delay in assertion of rights. If the infringement in question has been going on for a long time, you may be able to argue that the plaintiff waited too long to enforce their common law rights.
  • The trademark has been abandoned and is therefore no longer eligible for protection. A trademark is only protected as long as it is in current use in commerce. If the plaintiff cannot prove that the trademark is still being used, you might be off the hook for common law trademark infringement.

It is critical upon receiving a cease and desist to seek legal counsel immediately. A hasty response could inadvertently admit liability and make a delicate situation worse. Similarly, a delay in response could be seen as a refusal to comply with the letter’s demands and result in the filing of a trademark lawsuit. Even if you are confident of your rights in the situation, a trademark attorney can ensure you don’t make any missteps that may cause legal action.

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