What to Know About the Proper Use of a Common Law Trademark: The Intellectual Property Application Series
In this ‘Intellectual Property Application Series,’ I’ll be discussing common law trademarks and the proper way to use the mark in order to maintain the legal rights common law provides. I’ll explain what a trademark is, what common law trademark rights involve, and what to know about proper usage to maintain a common law trademark. This and more will help explain why common law trademarks are an important tool, which protects both businesses and consumers.
A trademark is a type of intellectual property that uniquely distinguishes and identifies the source of a good. Trademarks assert an owner’s right to use a specific word, phrase, logo/symbol, design, or a combination thereof, in the market. Importantly, trademarks also convey an indication of the uniform quality expected of the goods/services it identifies. This is also known as the “good will” of the trademark. In general, trademarks are secured by a company to advertise and distinguish their products 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, trademarks protect those marks that indicate the source of a good, rather than the source of a service. The protections provided, under either a trademark or service mark, vary slightly. This is because they are specific to the classes of goods/services they protect. 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 trademark, and the obligations to maintain those protections, vary based on the type of trademark rights governing the mark. Formally protecting a trademark 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 Trademark Registrations:
To obtain federal registration, an official Application for Federal Registration of a Trademark is filed with the United States Patent and Trademark Office (USPTO). An application for federal registration undergoes the most rigorous of trademark prosecution procedures. The federal trademark prosecution process involves a review of the federal trademark 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 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 trademark.
State Trademark 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 trademark prosecution procedures for state trademark registration are not as rigorous as those for a federal trademark 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 trademark itself must meet the statutory requirements for registrations, governed by the Secretary of State’s Office with which registration is sought. Once the state trademark 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 laws.
Common Law Trademarks:
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. A common law trademark distinguishes and identifies the source of a good, just as registered trademarks do. One important difference is, common law trademarks and state registered trademarks are governed by state laws, while federally registered trademarks are governed by federal laws. All trademarks 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 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 goods for legal tender, is awarded the common law trademark rights to the mark, as used.
This is different from some international trademark rules, e.g. China, which bases rights to a trademark on a first-to-file, rather than first-to-use basis. Common Law rights do not extend to any country in which trademark 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 trademarks 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 trademark application or official substantiation. As such, the rights conveyed and the protections offered to a common law trademark are limited, compared to those provided by a federally registered trademark. 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 trademarks are limited and can be geographically restricted from expanding into other markets. Due to the unofficial nature and limitations, enforcing common law trademark rights may also prove difficult.
Federal registration of a trademark provides the broadest rights and the greatest protections available to trademarks. However, a common law trademark 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 trademark only qualifies for common law rights.
Owner Responsibilities and Obligations to Maintain Common Law Trademark Rights:
Proper use of a common law trademark preserves the rights provided and the opportunity to file a civil suit in state courts. A common law trademark claim comes with responsibilities and obligations for the trademark owner, in order to maintain those rights. If the trademark is not properly monitored and protected by an owner, the rights to the mark can be put at risk or lost completely.
Market Surveillance for Common Law Trademarks:
Owners of trademarks, 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 trademark is only used in a small market, there is a good potential that another company may inadvertently infringe a protected trademark. Even inadvertent infringement is damaging and must be remedied, or the trademark owner could lose rights to the mark.
Generic use of a trademark weakens and damages the mark over time. If the general public begins using and associating a trademark as indicating the goods themselves, rather than the source of the goods, the trademark becomes generic through improper use. Once a trademark is deemed to be generic, it can no longer qualify for protection under common law. Early indications of public generic use of a trademark 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 trademark, the USPTO publishes each potential trademark 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 trademark. There are search firms which specialize in trademark monitoring and report any federal applications filed for confusingly similar or identical marks they find.
The trademark 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 trademark enforcement.
Enforcement of Common Law Trademark Rights:
Once a trademark owner becomes aware of an alleged infringement, action must be taken. To claim infringement, the trademark 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 trademark, 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 trademark cannot enforce their mark outside of that geographic area.
A potential remedy to an alleged trademark 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 trademark 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 trademark 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 trademark registration. In a trademark dispute between a federally registered trademark and an unregistered common law trademark, 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 trademark, there must be verifiable proof that a common law trademark 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 goods 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 trademark 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 trademark, protected by common law rights alone, can have limited benefits. In comparison to federally registered trademarks, 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 trademark on the Principal Register, rather than a non-registered common law mark, gives the trademark owner additional rights. Only the owner of a federally registered trademark 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 a common law rights, a federal registration can still potentially be cancelled, if the owner of a common law trademark can prove first use of the mark.
Third parties, e.g. common law trademark holders, have the right to begin formal Cancellation or Opposition Proceedings against a federal trademark. 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 trademark becomes synonymous with the product, i.e. it becomes generic, the mark was obtained fraudulently, or if the trademark is believed to be functional in nature.
Proper Display of Common Law Trademarks:
To protect and maintain the rights provided under common law, the trademark and its use must be properly managed by the trademark owner. This would include ensuring the proper display of the trademark, to assert the associated trademark rights to the public.
A common law trademark must be displayed and used in accordance with the rules governing all trademarks/service marks. The commonly known symbol (R) can only be used to indicate a federally registered mark. When displaying a common law trademark (or state registered trademark) in type, it should be followed by the standard TM symbol. The standard symbol SM is used for service marks.
Simply using a trademark in commerce allows a mark protection under common law rights. Proper use of the trademark symbol gives constructive notice to the public that the mark is in use and is protected by that use. This notice asserts the trademark rights and discourages others from infringing the mark. If alleged infringement is found, the owner of a trademark has the right to bring suit in the relevant state court.
When the trademark is referred to in speech, the common name of the product or the word “brand” should be included. This is to proactively prevent the public use of a trademark, in place of the common name, to describe the good(s) it advertises. Similarly, the use of a trademark 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 trademark as a noun leads to confusion between the trade name and the business name and weakens the mark.
The main distinction is, trademarks must be presented and used as proper adjectives. As discussed previously, if the public begins using and associating a trademark as indicating the goods themselves, rather than the source of the goods, the trademark may be considered generic over time. Once a trademark is deemed generic, it can no longer be registered or protected under trademark/service mark laws.
Managing Common Law Trademark Proper Use:
To protect and maintain the rights provided by common law, the use of the trademark must also be properly managed. Among other things, proper management of a trademark would include ensuring the same trademark continues to be used in connection with the goods initially associated with the mark. Overtime, consumers will hopefully begin to associate a company’s trademark with that individual company, as the source of that company’s particular marketed goods. In this way, the goodwill of a trademark can be established and grow as consumer recognition, and their association of the brand with trusted products, solidifies.
Proper use is also necessary to maintain common law trademark rights, in accordance with trademark regulations. The protections provided by common law rights are based on the marks current use in commerce. Accordingly, the owner of a common law trademark must ensure that the mark is in continued use for the specific good(s) demonstrated with the first-use of the mark in commerce.
In addition to their ability to advertise and distinguish a company’s goods from another, trademarks also convey a company’s “goodwill.” The goodwill a trademark conveys is an indication of the uniform quality expected of the good(s) identified by the trademark. To preserve the strength of a trademark and its rights, the mark should be protected from being used in association with inferior, low-quality products.
If a common law trademark 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 trademark, it is important to explicitly state liability obligations and establish the responsibilities of leasing the trademark. In a trademark license agreement, the owner is expected to control the quality of the good(s), as well as the appearance of the licensed trademark.
Trademark 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 trademark licensee is not abiding by the terms of the trademark license, the trademark 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 Trademarks – An Important IP Tool:
Common law trademarks 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 goods. While the strongest protection for a trademark is provided through federal registration, state and common law rights still provide a trademark owner with important, but limited rights.
The rules that govern trademark law enable businesses to compete efficiently and fairly. Government trademark rules establish a standardized system for businesses competing in the market. Government guidelines for addressing trademark disputes are also integral to the success of the trademark system.
In addition, the laws governing trademarks help protect consumers from deceit by counterfeit products or fraudulent companies. Trademarks do this by signifying the goodwill and identity of a company. Consumers depend on trademarks to convey the goodwill of a company, as this indicates an expected level of quality and/or trust. The proper use of the trademark symbol (TM) is the best way to communicate to consumers that a legitimate trademark is in use. If businesses could not prove and protect their reputation via trademarks, 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 protecting a trademark or other intellectual property.