Clients often ask me: “Can we trademark this?” or “Should we trademark this?”
I respond bluntly, but politely: “In the United States, we do not “trademark” anything.”
Admittedly, I can be an annoying verbal perfectionist. However, the true reason I respond bluntly is because it genuinely matters to me that my clients fully understand the core, easily graspable principles of how trademark and service mark rights are created. A long-winded (i.e., “typical lawyer”) explanation, with caveats, disclaimers and war stories would thwart that objective. As a matter of fundamental branding acumen and saving attorneys’ fees, all businesses must understand how marks (i.e., their brands) are created. Startup companies should have this understanding right from the beginning, particularly if they have a near term exit strategy as part of their start up strategy.
It is as simple as this. In the U.S. mark rights arise by use. More specifically, in the U.S., the first business to:
a) use a mark;
b) in connection with a specific category of goods or services; and
c) in a particular geographic area;
is considered the owner of the mark in that geographic area for those goods or services.
This is the important concept of mark “priority.” Therefore, once a business starts using any word, symbol, logo or other device as a brand – it is generating legally protectable (“common law”) rights recognized under the law. Nothing else technically needs to be done. Got it? Now you see why “we don’t trademark anything.” Businesses that think some formal application or act is necessary to create mark rights fundamentally misunderstand both the mark rights and liabilities they have in operating their business. Do not be one of those businesses.
This brings us to our next core concept. Mark rights that arise by use can be enhanced by registering the mark with the United States Patent and Trademark Office (USPTO). As discussed below, these enhancements can be very significant. However, for now, note that the converse of this concept is that: a mark that is never used cannot be registered; and when a business stops using a registered mark, it can lose its registration.
There are several advantages from having a mark registered with the USPTO. Startup businesses should be aware of at least two of these advantages. The key right gained from registration is being recognized as a user of the mark in the entire U.S. starting from the date of the application to register – even if the business is not actually selling product or services in the entire U.S. If one gets a registration, then only those businesses using the mark at the time of the filing date of the application can keep using their marks, and only in their limited geographic area.
Critically, the ability to apply to register a mark with the USPTO is open to not just those businesses actually using a mark, but also to those businesses that at the time of the application have a bona fide intent to use a mark in the future. Those businesses that apply based upon an intent-to-use can obtain a registration once proof of use is shown. The major advantage with marks that are registered based upon an intent-to-use rather than actual use, is the fact the filing date of the application to register, not the later date of first use, serves as the priority date. For newly-formed startups that will not be able to bring product or services to market until some date in the future, the ability to reserve a mark based upon a bona fide intent is a key branding tactic with which it must be familiar.
Synopsis: Branding is a “top-of-the-list” concern for startup businesses. The sharp startup business must understand how mark rights are created and how those rights can be enhanced by registration, in particular based upon an intent-to-use.