In this ‘Intellectual Property Application Series,’ I’ll be discussing common law service marks. I’ll explain what a service mark is, what a common law service mark is and what is involved in obtaining and maintaining a common law service mark . This and more will help explain why a common law service mark is an important tool, which protects 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. This is because they are specific to the classes of services/goods 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 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 Registration:
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 service mark 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 laws governing trademarks/service marks.
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 Registration:
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 Mark:
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 service, 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 specific services for legal tender, is awarded the common law service mark rights to the mark, as used.
This is different from some international trademark/service mark rules, e.g. China, which bases rights to a 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 an 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 not being used in interstate commerce, a service mark only qualifies for common law rights.
Common Law Service Mark Clearance Search:
One of the first steps to selecting a service mark is to investigate the potential mark and confirm if it is unique and distinctive. For this, a clearance search is performed to compare the potential mark to currently published/used marks. A search can be attempted by an individual, but a formal search is conducted by a patent attorney, patent agent, or a person who specializes solely in these types of searches. The USPTO even has some advice about hiring a private trademark attorney.
To conduct a formal clearance search, an experienced professional uses specialized tools and databases to compare the potential mark to the millions of published applications and marks listed on both the federal Principal and Supplemental Registers. These applications are found in the database of the Trademark Electronic Search System (TESS) of the USPTO and in the state specific Secretary of State Office databases. A complete search would also include an internet search for common law marks used in online commerce.
A clearance search should be performed as part of the due diligence process, before a service mark is used by a business to market their services. Finding out if a mark is already registered, could prevent a company from being sued for unintentional infringement of another’s mark. This could not only save time and money, but also a company’s reputation.
Even the most in depth search may still miss a similar mark that is being used in commerce. In a service mark dispute, one factor considered is if appropriate steps were taken to avoid infringement of an existing mark. In this way, common law rights may supersede federal service mark rights in the case where a proper clearance search was not performed. Likewise, any claim to a service mark registered or unregistered, can be put at risk if there is no proof that a proper clearance search was performed, prior to using the mark in commerce. Inversely, proof that an official clearance search was performed, prior to using a mark, can support a defense that an accusation of infringement was, at the least, not malicious.
Common Law Service Mark Requirements and Use:
After a chosen mark has passed a clearance search, the next step to secure common law rights is to use the service mark in commerce, in connection with the specific services marketed. Common law rights can only be claimed if a mark is in current use. More specifically, common law rights are not secured, until there is an exchange of funds for the services(s) advertised by the service mark.
Once common law service mark rights are claimed, those rights must be maintained through proper use of the service mark. To maintain the rights provided by a common law service mark, the service mark owner must continue to use the same service mark 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 the particular services marketing by that company. The goodwill of a service mark can be established and grow as consumer recognition, and their association of the brand with trusted services, solidifies.
To help with consumer association of a company’s service mark as the source of that company’s specific marketed services the standard “SM” symbol is appropriate to use, when displaying a common law service mark. Proper use of the SM symbol signifies to the public that the common law mark is in use. The use of the SM symbol does not confer legal rights, as common law rights do not provide an assumption of ownership. This is because common law service marks are not held to a standard involving a formal prosecution or registration process. Without enduring these formal processes, a service mark cannot be verified as representing a unique and distinctive mark, which has not previously been used in the marketing and distribution of services.
Common law service marks are not permitted use of the registration symbol (®), which indicates federal registration. It is a violation of federal law to use the (®) federal registration symbol, if a federal service mark Certificate of Registration has not been issued for the mark. If the owner of a common law service mark attempts to federally register their mark, the premature use of the official registration symbol can be grounds for refusing to register the service mark.
Proper use of a service mark preserves the rights provided under the Lanham Act and the opportunity to file suit in state courts. Common law service mark rights come 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.
Common Law Service Mark Rights:
Common Law service marks are protected under the individual state law, in which the mark is geographically used. State laws, in general, defer to federal law. Common law rights are quite limited, compared to state registrations. Compared to federal registrations, which offer an assumption of ownership throughout the entire nation, among other advantages, common law rights are still further limited.
The rights provided under common law only extend to the geographic area in which the mark is used. Limitation to a geographic area could prevent a company from expanding the use of their mark and their business into other geographic areas. A company in a different geographical area, that currently uses and/or has registered a confusingly similar mark, would limit that market.
If the owner of a common law mark discovers a potential infringement of their mark, the service mark owner has the right to bring suit in the relevant state court, in order to protect their service mark. However, 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. This means that, if a confusingly similar mark is found being used in another area, common law rights cannot be used to claim infringement and file suit in a relevant state court.
Multiple uses of a similar mark, in connection with similar services, can cause confusion with consumers in the physical market. This is especially the case with the online market, where consumers may not easily distinguish the difference between two similar uses of a mark. When a service mark owner cannot properly enforce their rights, the strength of the mark can be weakened. A mark is only as strong as the association, made by consumers, with a company’s service mark as the source of the services it advertises.
Common Law Service Mark Monitoring and Surveillance:
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 and counterfeit services.
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.
Common Law Service Mark Enforcement:
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. Contrastingly, 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.
Common Law Service Mark – An Important IP Tool:
Common law service marks are important in their ability to protect businesses and consumers alike. They provide a business with legal backing to protect their identity, reputation, and the goodwill associated with a company and its service marks. While the strongest protection for a service mark is provided through federal registration, common law rights still provide a service mark owner with important, but limited state rights.
The rules that govern service marks enable businesses to compete efficiently and fairly. Government trademark/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.
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 pursuing other intellectual property services