Last month, I explained how most successful businesses carefully plan which trademarks they select and adopt for use before investing in costly activities to establish consumer awareness of the business’s name and brand. Typically, businesses conduct a comprehensive trademark search to determine whether there are other brands that already exist for similar goods or services that may be an obstacle to their use of the trademark. I referred to these obstacles as “landmines“. That is, the last thing the business owner wants is for someone to come along after he or she has started to build its brand, and demand that the business owner stop using it because they are already using a similar trademark for similar goods/services. But if the results of the search are positive for the business (ie. no hits of concern), it increases the chance that the mark can be federally registered. Then the question becomes: why bother with federal registration? After all, you don’t need a federal trademark registration to operate a business.
Here’s why: Most trademark practitioners will tell you that the most widely recognized advantage of a registration is that it (1) carries a legal presumption that the registrant owns the mark, and (2) that the registrant is entitled to the exclusive right to use the mark nationwide for the goods and services identified in the registration. And don’t get me wrong. That is important. But, there is a hidden and much more valuable advantage to having a federal registration that most registrants will never see — and here it is: Your trademark registration will more likely than not appear on trademark searches conducted by others for the same or similar trademark for the same or similar services. Remember last month’s article about having a trademark search done to make sure your mark is cleared for use and registration? And, identifying landmines? So, think about it. Your registration is now the landmine! If you are the one with the registration, it will likely show up on every comprehensive trademark search of the United States Patent and Trademark Office records. So, completely unbeknownst to you, there could be dozens if not hundreds of potential infringers who are stopped in their tracks when they see your federal trademark registration on search. This is very hidden, but in my view, one of the most important benefits of a federal trademark registration.
Federal registration also permits you to use the highly revered registration symbol “®” next to your mark, which shows the industry that your brand is important to you. A federal registration acts as constructive notice to the country at-large of the registrant’s rights in the mark. So, even though people may not have actual knowledge of the trademark, they are deemed to have knowledge by virtue of the registration. The practical effect of this additional benefit is that an infringer cannot successfully defend itself against a claim of infringement by saying that it was not aware of your registered mark.
Federal registration also provides you with access to the United States Federal Courts to enforce your trademark against infringers. This alone carries several advantages. Federal Judges are appointed by the President of the United States and confirmed by the Senate. Most, if not all, of the judges are well versed in Federal Trademark Law. Furthermore, when enforcing a federal registration in federal court, you can recover the infringer’s profits, any damages sustained by you, and the costs of the action. The court may also triple the damages award and award reasonable attorneys fees to the prevailing party in exceptional cases. If the infringer is a counterfeiter, the holder of a federal registration can elect “statutory damages”, which means that the owner can choose to forgo proving actual damages or defendant’s profits, but instead elect an award up to $200,000 per counterfeit mark per type of goods or services sold, as the court considers just.
No one wants to be in court. But having these weapons in your arsenal sends a strong signal to would-be infringers long before you get to court: “stop your infringing activities now or there will be a substantial price to pay under Federal law.” In sum, while there are several advantages to federal registration, the most valuable advantage may be one never seen by the registrant – the deterrent effect it has on other businesses from adopting the same or similar trademark. For that reason alone, businesses should consider whether it makes sense to create that barrier to strengthen their position in the marketplace.
Robert McKinley, Attorney has helped clients protect and enforce their brands nationally and internationally for almost two decades. If you would like assistance with clearing and protecting your trademarks, please contact him at 609-770-7958 or [email protected].
No Legal Advice or Attorney-Client Relationship: These materials have been prepared for general informational purposes only and are not legal advice.
