Traditionally, trademark rights have been based on first and continuous use of a trademark in commerce in connection with goods, products or services. For trademark goods, “use” means a bona fide sale or shipment of marked products; for trademark services, “use” means the trademark appears in connection with the advertising or provision of the services. The rationale for awarding trademark rights based on first and continuous use is that (1) the use of a trademark indicating source creates marketplace awareness, (2) awareness results in symbolized trademark goodwill, and (3) the use of any similar trademark by others should be restricted to the extent that it is likely to result in a unfair competition of the symbolized goodwill created by your trademark. Ownership in the past, therefore, was governed by a race to the marketplace rather than a race to the United States Patent and Trademark Office to register the trademark.
While first and continuous use of a trademark remains a valid basis for establishing protectible trademark rights, the Lanham Act (the federal statute providing trademark protection) provides an alternative basis. Under the statute, the first to apply to register a trademark, with a bona fide intent to use it, is awarded a formative ownership right as of the date of the application. That formative right becomes viable when the applicant later begins using the trademark in commerce. Even with this statutory scheme, ownership rights are still contingent on actual use. A prior user without a trademark registration has rights in its geographic area of use superior to any rights of a subsequent trademark registration owner.
Trademark Rights Through Use Alone
As noted above, trademark rights can arise through use of a trademark in connection with one’s goods, products or services. These rights are commonly referred to as “common law rights.” Common law rights are limited to the geographic area in which the trademark is used, and in some circumstances, a zone of natural expansion into which the trademark owner is likely to extend use. Some courts have been reluctant to extend common law protection to areas of natural or probable expansion, however, when the prior user’s trademark had no public recognition in the area of intended expansion and the later user did not act in bad faith in selecting its trademark.
Particularly with regard to small businesses or new products, questions arise as to the nature and amount of use that must be made of the trademark to create common law rights. Even a small amount of use in commerce may sustain trademark rights if followed by continuous commercial use. Use of the trademark has to be sufficient in quantity to establish recognition of the trademark among relevant consumers.
Trademark Rights Through Federal Trademark Registration
While use is required to establish trademark protection, there is a narrow exception to that rule. Those individuals or businesses who have a trademark and intend to use the trademark in commerce can now file an intent-to-use application for federal registration. As long as the trademark is actually used within 6 months of the intent-to-use application (extendable to 1 year or 3 years for good cause), this establishes formative trademark rights as of the date of application. Once the trademark is put into bona fide use, meaning use that is targeted to customers, the intent-to-use application matures to registration. The applicant is then awarded nationwide trademark priority dating back to the filing date of the application. These nationwide rights are not absolute, however. They are subject to (a) the common law rights of any third-party trademark owner that has been using its trademark since before the application filing date, (b) any prior registrations or pending applications owned by third parties, and (c) rights accrued through a prior, foreign application, if the foreign trademark owner timely files an application with the United States Patent and Trademark Office.
After a registration issues, to keep the registration valid, the registration owner must file renewal documents and fees at regular intervals between the 5th & 6th years after registration and again between the 9th and 10th years after registration, and every 10 years thereafter. Failure to renew your trademark will result in the cancellation of your registration, leaving you unprotected. The US Government will not notify you of these requirements. It is completely your obligation to make these filings
Once a trademark owner holds a trademark registration, the trademark owner is subject to several legal responsibilities. Of primary importance is the legal responsibility to actively police the registered trademark in the marketplace to deter potential trademark dilution and trademark infringement. Failure to police the registered trademark and notify those potential infringers may result in the complete loss of certain federal trademark rights. To ensure retention of maximum trademark rights and trademark goodwill under state and federal law, our law firm provides quarterly trademark monitoring services for an affordable annual fee.