In this ‘Intellectual Property Application Series,’ I’ll be discussing common law service marks and the proper way to use the mark in order to maintain the legal rights common law provides. I’ll explain what a service mark is, what common law service mark rights involve, and what to know about proper usage to maintain common law service mark rights. This and more will help explain why common law service marks are an important tool, which protect both businesses and consumers.
A service mark is a type of intellectual property that uniquely distinguishes and identifies the source of a service. Like trademarks, service marks assert one’s right to use a specific word, phrase, logo/symbol, design, or a combination thereof, in the market. Importantly, service marks and trademarks also convey an indication of the uniform quality expected of the services it identifies. This is also known as the “good will” of the service mark. In general, service marks are secured by a company to advertise and distinguish their services from those offered by other companies.
The word “trademark” is generally used as an umbrella term to include both trademarks and service marks. More specifically, service marks protect those marks that indicate the source of a service, rather than the source of a good. The protections provided, under either a service mark or trademark, vary slightly. Common Law rights extend to both trademarks and service marks.
The word “trademark” is also generally used as an umbrella term to include both commonly protected and formally protected trademarks/service marks. The protections provided by a service mark, and the obligations to maintain those protections, vary based on the type of service mark rights governing the mark. Formally protecting a service mark would involve filing an application to register the mark federally and/or filing an application to register the mark in individual U.S. states.
Federal Service Mark Registrations:
To obtain federal registration, an official Application for Federal Registration of a Service Mark is filed with the United States Patent and Trademark Office (USPTO). An application for federal registration undergoes the most rigorous of prosecution procedures. The federal service mark prosecution process involves a review of the federal service mark application, to confirm adherence to the government filing requirements. Also during the prosecution process, the mark itself is examined to confirm it qualifies for federal protection, in accordance with strict government rules. Once the examination process is completed and the application is accepted, a formal Federal Certificate of Registration is issued and the mark is considered protected under federal trademark/service mark laws.
Only marks in current use in interstate commerce can be granted federal registration and protection. If a mark is not currently being used to market products/services, but there is a true intention to do so, the USPTO does provide the option of filing an intent-to-use based application. This option allows for an earlier application filing date and potential priority over competing marks, which could be crucial in a legal conflict over the service mark.
State Service Mark Registrations:
To obtain registration in a specific state, an official Application for Registration of a Trademark or Service Mark must be submitted to the relevant Secretary of State’s Office. To qualify for state registration and protection, the mark must be in current use in commerce. Unlike federal registrations, no option is provided for filing an application with only an intention to use the mark.
The service mark prosecution procedures for state service mark registration are not as rigorous as those for a federal service mark application. Even so, the application must meet the filing requirements of the Secretary of State’s Office and strict filing procedures must be followed. These requirements and procedures vary based on the Secretary of State’s Office in question. The service mark itself must meet the statutory requirements for registrations, governed by the Secretary of State’s Office with which registration is sought. Once the state service mark prosecution process is completed and the application is accepted, a formal State Certificate of Registration is issued by the relevant State’s Office. Once officially registered, the mark is considered protected under state trademark/service mark laws.
Common Law Service Marks:
Marks used by a company in commerce, but not registered federally or with a state, are protected under common law rights and are referred to as common law trademarks or common law service marks. A common law service mark distinguishes and identifies the source of a good, just as registered service marks do. One important difference is, common law service marks and state registered service marks are governed by state laws, while federally registered service marks are governed by federal laws. All service marks assert one’s right to use a specific word, phrase, logo/symbol, design or a combination thereof in commerce.
According to the Lanham Act, which governs trademark/service mark law in the U.S., from the moment a mark is used by a business in commerce, it is automatically protected as a common law mark. Specifically, the first individual to use a mark in commerce, in connection with marketing and exchanging services for legal tender, is awarded the common law service mark rights to the mark, as used.
This is different from some international service mark rules, e.g. China, which bases rights to a service mark on a first-to-file, rather than first-to-use basis. Common Law rights do not extend to any country in which trademark/service mark laws are based on a first to file ruling. The use of a mark internationally can also not be used to claim prior use of a mark in the U.S. For international service marks seeking registration in the U.S., the date of first use in another country cannot be claimed. The day the international mark is first used in U.S. commerce is considered the true date of first use.
The process of obtaining common law rights to a mark is relatively simple, in that it does not require the formal prosecution of a service mark application or official substantiation. As such, the rights conveyed and the protections offered to a common law service mark are limited, compared to those provided by a federally registered service mark. Specifically, common law rights are limited in the scope of protection provided under the state laws, which govern them. In addition, use of common law service marks are limited and can be geographically restricted from expanding into other markets. Due to the unofficial nature and limitations, enforcing common law service mark rights may also prove difficult.
Federal registration of a service mark provides the broadest rights and the greatest protections available to service marks. However, a common law service mark claim may be more suitable in certain situations. If a mark is only used in a small geographic area and is not being used in interstate commerce, a service mark only qualifies for common law rights.
Owner Responsibilities and Obligations to Maintain Common Law Service Mark Rights:
Proper use of a common law service mark preserves the rights provided and the opportunity to file a civil suit in state courts. A common law service mark claim comes with responsibilities and obligations for the service mark owner, in order to maintain those rights. If the service mark is not properly monitored and protected by an owner, the rights to the mark can be put at risk or lost completely.
Surveillance of Common Law Service Marks:
Owners of service marks, whether registered or unregistered, should conduct routine market surveillance to ensure that others are not using, misusing or damaging the mark. Market surveillance includes, for example, routinely searching the marketplace for generic use of the mark or infringement.
Monitoring the public market is a proactive measure that could help detect potentially damaging use of a mark. If a service mark is only used in a small market, there is a good potential that another company may inadvertently infringe a protected service mark. Even inadvertent infringement is damaging and must be remedied, or the service mark owner could lose rights to the mark.
Generic use of a service mark weakens and damages the mark over time. If the general public begins using and associating a service mark as indicating the services themselves, rather than the source of the services, the service mark becomes generic through improper use. Once a service mark is deemed to be generic, it can no longer qualify for protection under common law. Early indications of public generic use of a service mark could provide the advantage needed to curb any trends towards misuse.
Further efforts to guard your mark include monitoring for attempts to register a confusingly similar or identical mark. This would involve periodically reviewing the public list of trademarks and service marks registered with the relevant Secretary of State’s Office. The USPTO also provides a list of federally registered marks and a separate list of federally published marks, which can be monitored and reviewed. Such monitoring can be conducted with automatic, software-enabled alerts. Thrive IP® can assist in setting up any market surveillance or monitoring programs for individual Secretary of State’s Offices and/or USPTO-monitoring programs.
The list of federally published marks offered by the USPTO is compiled of trademarks/service marks seeking federal registration and related information. The list of federal marks does not include state registered or common law marks. Applications for State registration, submitted to a Secretary of State Office, are not subjected to publication as part of the registration process. A search for potentially conflicting common law marks is conducted using internet searches to review the online marketplace.
During the application process to federally register a service mark, the USPTO publishes each potential service mark in their Official Trademark Gazette, which is available to the public to search. The federal application publication stage lasts for 30-days. During this time period, the public is provided the opportunity to file a formal notice with the USPTO, opposing the registration of the potential federal service mark. There are search firms which specialize in service mark monitoring and report any federal applications filed for confusingly similar or identical marks they find.
The service mark owner is solely responsible for monitoring and enforcing their rights, but third parties can be enlisted to assist. To ensure that a mark is being monitored correctly, Thrive IP® stands ready to assist in forming these trusted relationships and maintaining communication. Additionally, if infringement is found, our team is here to help guide you through the task of service mark enforcement.
Enforcing Common Law Service Marks:
Once a service mark owner becomes aware of an alleged infringement, action must be taken. To claim infringement, the service mark owner must believe another mark is simply confusingly similar to their own. Exact similarity is not required to claim infringement. In order to properly protect the rights to a service mark, the owner must take action to enforce those rights, or risk losing them. Since the rights provided under common law only extend to the geographic area in which the mark is used, the owner of a common law service mark cannot enforce their mark outside of that geographic area.
A potential remedy to an alleged service mark infringement, may be to send a simple Cease and Desist letter to the infringing party. This action gives notice to the infriger of the claimed service mark rights and requests the party to cease use of the protected mark. Further measures can be taken, including filing a civil suit with the relevant state court, if the infringing party is not responsive to the initial effort to enforce the service mark rights.
While it is not a legal requirement, having an experienced legal team behind a cease and desist notice can help avoid the potential for the tables to turn. A simple cease and desist notice can be justification for a defamation complaint, claim of extortion, or even material for a counter suit. An experienced legal team can also assist in researching infringement and assist in filing Opposition Proceedings or Cancellation Proceedings against an infringing mark.
Common law rights may be limited, but they can still be used to preserve one’s rights to a mark, even prevailing over a federal principal or supplemental service mark registration. In a service mark dispute between a federally registered service mark and an unregistered common law service mark, the outcome generally lies in proving which mark was used in commerce first. This can be more difficult to prove, with only a common law claim to a mark.
To prevail over a federally registered service mark, there must be verifiable proof that a common law service mark has an earlier date-of-first-use in commerce. The proof of use in commerce must also show the use of the mark in connection with the services offered. However, proving prior use of the mark and the date-of-first-use of the mark in commerce, may be difficult, since no official record or filing procedure is required to initiate common law service mark rights. In contrast, federal registration of a mark provides a public record of the date the mark was first used in commerce, evidence of that use, and proof of ownership of the mark.
Proving infringement of a service mark, protected by common law rights alone, can have limited benefits. In comparison to federally registered service marks, the protections provided are significantly limited . To take advantage of the added benefits of federal registration, an owner of a common law mark could file an application for federal registration with the USPTO, before an infringement suit is filed.
Having a federally registered service mark on the Principal Register, rather than a non-registered common law mark, gives the service mark owner additional rights. Only the owner of a federally registered service mark has the right to recover profits, sue for statutory damages, cover legal costs, and receive triple damages for willful infringement. While federal registration provides greater protection over common law rights, a federal registration can still potentially be cancelled, if the owner of a common law service mark can prove first use of the mark.
Third parties, e.g. common law service mark holders, have the right to begin formal Cancellation or Opposition Proceedings against a federal service mark. These actions are an appropriate response, if it is believed that the federal mark is confusingly similar and its use or registration would damage a previously existing mark. Other reasons for filing for Cancellation are if the mark is no longer being used, the use of the service mark becomes synonymous with the service, i.e. it becomes generic, the mark was obtained fraudulently, or if the service mark is believed to be functional in nature.
Proper Display of Common Law Service Mark:
To protect and maintain the rights provided under common law, the service mark and its use must be properly managed by the service mark owner. This would include ensuring the proper display of the service mark, to assert the associated service mark rights to the public.
A common law service mark must be displayed and used in accordance with the rules governing all trademarks/service marks. The commonly known symbol (®) can only be used to indicate a federally registered mark. When displaying a common law service mark (or state registered service mark) in type, it should be followed by the standard SM symbol. The standard symbol TM is used for trademarks.
Simply using a service mark in commerce allows a mark protection under common law rights. Proper use of the service mark symbol gives constructive notice to the public that the mark is in use and is protected by that use. This notice asserts the service mark rights and discourages others from infringing the mark. If alleged infringement is found, the owner of a service mark has the right to bring suit in the relevant state court.
When the service mark is referred to in speech, the common name of the service or the word “brand” should be included. This is to proactively prevent the public use of a service mark, in place of the common name, to describe the service(s) it advertises. Similarly, the use of a service mark as a noun or a verb can have dire consequences, as was the case for the once registered Jacuzzi and Google marks. Use of a service mark as a noun leads to confusion between the trade name and the business name and weakens the mark.
The main distinction is, service marks must be presented and used as proper adjectives. As discussed previously, if the public begins using and associating a service mark as indicating the services themselves, rather than the source of the services, the service mark may be considered generic over time. Once a service mark is deemed generic, it can no longer be registered or protected under trademark/service mark laws.
Managing Common Law Service Mark Proper Use:
To protect and maintain the rights provided by common law, the use of the service mark must also be properly managed. Among other things, proper management of a service mark would include ensuring the same service mark continues to be used in connection with the services initially associated with the mark. Overtime, consumers will hopefully begin to associate a company’s service mark with that individual company, as the source of that company’s particular marketed services. The goodwill of a service mark can be established and grow as consumer recognition, and their association of the brand with trusted services, solidifies.
Proper use is also necessary to maintain common law service mark rights, in accordance with service mark regulations. The protections provided by common law rights are based on the marks current use in commerce. Accordingly, the owner of a common law service mark must ensure that the mark is in continued use for the specific service(s) demonstrated with the first-use of the mark in commerce.
Maintaining Goodwill of Common Law Service Marks:
In addition to their ability to advertise and distinguish a company’s services from another’s, service marks also convey a company’s “goodwill.” The goodwill a service mark conveys is an indication of the uniform quality expected of the service(s) identified by the service mark. To preserve the strength of a service mark and its rights, the mark should be protected from being used in association with inferior, low-quality services.
If a common law service mark owner is considering licensing the rights to their mark, an official application for federal registration may be considered more beneficial to protecting a mark. For this, the common law mark would need to be currently used in interstate commerce and otherwise qualify for federal protection. When leasing a service mark, it is important to explicitly state liability obligations and establish the responsibilities of leasing the service mark. In a service mark license agreement, the owner is expected to control the quality of the service(s), as well as the appearance of the licensed service mark.
Service mark owners are obligated to ensure license provisions are adhered to. To enable this, a licensor has permission to monitor the licensee’s use of the mark. These proactive measures are an important step in protecting a mark and the goodwill associated with it, so that it does not become susceptible to losing the rights it protects. If it is believed that a service mark licensee is not abiding by the terms of the service mark license, the service mark owner has the right to take action to protect their mark. Not acting to protect the mark could result in loss of rights to the mark.
Common Law Service Marks – An Important IP Tool:
Common law service marks are important in their ability to protect consumers and businesses alike. They provide businesses with a way to protect their identity, reputation, and the goodwill associated with their services. While the strongest protection for a service mark is provided through federal registration, state and common law rights still provide a service mark owner with important, but limited rights.
The rules that govern service mark law enable businesses to compete efficiently and fairly. Government service mark rules establish a standardized system for businesses competing in the market. Government guidelines for addressing service mark disputes are also integral to the success of the service mark system.
In addition, the laws governing service marks help protect consumers from deceit by counterfeit products or fraudulent companies. Service Marks do this by signifying the goodwill and identity of a company. Consumers depend on service marks to convey the goodwill of a company, as this indicates an expected level of quality and/or trust. The proper use of the service mark symbol (SM) is the best way to communicate to consumers that a legitimate service mark is in use. If businesses could not prove and protect their reputation via service marks, it could be consumers that pay the greatest price.
Don’t leave a matter as important as your intellectual property to chance. Willing help in the form of an experienced legal team is here and is just a call away. Thrive IP® patent attorneys are located in Charleston, SC; Greenville, SC; Knoxville, TN; Alexandria, VA and Smithfield, VA. Please contact us if you have an interest in filing a service mark application or other intellectual property services.