February 15, 2017,

The Top 10 Reasons you Should Have a Registered Trademark

Today’s blog post is about the top 10 reasons why you should obtain a registered trademark.  First, let’s discuss what a trademark is.  A trademark is a word, slogan, symbol, design or combination of those which does two things:  1) identifies the source of goods or services in the marketplace; and 2) distinguishes those goods and services from others.  A trademark can also be a sound, a color or a smell.  Your brand is what customers and consumers in the marketplace come to associate with your business. It represents their experiences with your business and their expectations of your product or services.  Your trademark is the basis of your brand.  It is what identifies your business and your product or services in the minds of consumers, to the exclusion of all others.  Since business owners spend so much time and money building and investing in their brands and what their brand means to consumers, it makes sense to protect that investment by obtaining a federal trademark registration.  There are many advantages to obtaining a federal trademark registration, but here are the top 10 reasons in my mind:

10.  Save yourself a headache

If you do not obtain a federal (or state registration if you only do business intrastate) trademark registration for your business name, logo or slogan and find out later someone else is using the same or a very similar name and they have obtained a federal (or state) trademark registration, you may have to change your business name, business cards, website, lose potential new customers and confuse your existing customers; all of which can harm your business.  Just think if tomorrow you had to start doing business under a completely different name than the one you are using today.  How would that affect your customers?  How would that affect the profitability of your business?

9.  Legal Presumptions

One of the greatest benefits of obtaining a federal trademark registration are the legal presumptions and rights that a federal trademark registration provides to your business.  A legal presumption means that certain facts are legally considered to be true from the beginning of the lawsuit.  Because these facts are considered to be true by virtue of the fact that you have a federal trademark registration; you don’t have to find evidence to prove these facts which will save you time and money in the event of any legal proceeding involving your trademark.  The presumption is that you are presumed to have the exclusive right to use your trademark in the entire U.S., over anyone else.  If you ever have to sue someone for trademark infringement, you don’t have to prove that you have the right to use your trademark.  Second, the date of your federal trademark registration serves as constructive notice to the entire U.S. public that you are the owner of your mark.  This means that after your date of registration, anyone who may use a mark that is the same or similar to yours cannot claim that they did not know about the existence of your trademark and use that as an excuse to escape liability for infringing or misusing your trademark.  Third, a federal trademark registration gives you the right to file a legal action concerning your federal trademark in any federal court in the United States.  This means no matter where a business or individual is located, as long as they are in the United States, you can file a lawsuit against them in federal court for infringing your trademark.  It does not matter if they are doing business in the same state where your business is located or on the other side of the country.  You don’t have to worry about having to bring the infringing party into the jurisdiction of your local court before you can take action.  You can take the fight to them.  Fourth, you have the right to use the federal registration symbol or ® with your trademark.  This is important because this symbol can only be used on trademarks that have been registered with the U.S. Patent and Trademark Office.  Use of the federal trademark symbol gives your customers confidence when seeking your goods and services because it uniquely identifies and distinguishes your goods and services from others in the market place.  Using the federal trademark symbol also communicates to your customers that you have taken the necessary legal steps to protect your mark from infringers and that you are serious about your business and your brand.  Finally, having a federal trademark registration allows you to register your trademark with U.S. Customs and Border Protection.  This registration allows U.S. Customs and Border Protection agents to assist you in policing the use of your mark by informing them about your mark and what goods it might be used in connection with so they can keep infringing and counterfeit goods out of the country by stopping them at the U.S. border.  You can only take advantage of these legal presumptions by obtaining a federal trademark registration.

8.  Help customers identify you and your brand

It is often difficult to see significant differences among competing products.  Just think of walking into your local grocery store and trying to select the best bottle of olive oil simply by looking at all of the different brands of olive oil on the shelf.  If you have not used any of the brands before and you are not familiar with any of the brands you see, how can you tell the differences between them? A trademark helps customers to identify you and your brand and to find your goods and services.  We come to associate a certain level of quality and service with a particular brand.  We all shop by trademark; meaning we identify and find our favorite brands by looking for their unique trademarks.

For example, the Marriott hotel brand.  I am a Marriott Rewards member but Marriott is not a client, nor did they pay me to say any of this.  This is just my own personal preference and a good example of how a trademark can help customers find you and how your mark becomes associated with your brand and your customer’s experiences with your goods and services.

When I am traveling, in the U.S. or abroad, and I am looking for a place to stay, I will usually look for a Marriott. I don’t care if it is a Residence Inn by Marriott or Townplace Suites by Marriott, Springhill Suites by Marriott or a full service Marriott hotel. To me, a Marriott property means a safe and clean room, reasonably priced, with good customer service.  Marriott is more than just a name or a word to me.  To me, “Marriott” means safety, peace of mind, a good night’s rest, comfort and satisfaction.  When I see the name “Marriott”, I know exactly what to expect.  For example, if I see a full service Marriott, I know that it will have a restaurant in it so I won’t have to worry about finding a place to eat if I am pressed for time or I’m staying in a place that is not familiar to me.  If I have dietary restrictions and want to make my own dinner, I may look for a Residence Inn by Marriott because I know all the rooms will have a fully stocked kitchenette with pots, plans, plates and utensils for me to use.  If I want a free breakfast, I will look for a Fairfield Inn, a Residence Inn or a Springhill Suites because I know they all offer a complimentary breakfast as part of your reservation. My experiences with Marriott and their brands is an example of how your customers will come to connect your brand with their own personal experiences with your goods and services.  Each customer’s unique experience with your company will form the expectations that they will come to associate with your brand and your trademark.  I can easily find a Marriott and I know what to expect from a hotel when I see the name “Marriott” on it.  If there were hotels out there with names like “Mariot”, “Mare E Yacht”, “Springplace Suites”, “Fairplains Inn” or “Residential Inns and Suites”, I might become confused trying to find the hotel I really want.  Worse, I may stay at one of these other hotels that “sounds” or “looks” like a Marriott, have a bad experience and then come to associate that negative experience with the real Marriott brand.  When you have a federal trademark, you can prevent others from using the same mark or a very similar mark on competing goods and services.  Having a federal trademark registration allows you to build your brand with confidence knowing that your customers will always be able to find you, and not anyone else, by looking for your unique trademark.  Just think: If I ask for “Coke” in a restaurant, I’m going to get a “Coke”, not a Pepsi, or a Dr. Pepper, or an RC Cola.  I know when I ask for a “Coke” it means just one particular brand of cola and no one in that restaurant is going to be confused as to what I want, despite all the other colas out there. When I say I want a “Coke”, I mean just that, to the exclusion of all other colas available.  Your trademark helps consumers to shop with confidence because they will always be able to find your goods and services and get exactly what they were looking for.

7.  Non registration hurts your ability to expand

Even if you never obtain a federal trademark registration, you obtain common law trademark rights in your business name, logo or slogan simply by using your business name, logo or slogan in connection with your business.  Rights in a trademark come from use of the mark in commerce, not from obtaining a federal trademark registration.  Unlike a federal trademark registration, common law trademark rights are not nationwide but are limited to a particular geographic area.  Generally this is the geographic area where you focus your advertising and marketing efforts, the area where most of your clients or customers are found or where you do most of your business.  Typically, this is the geographic area where your business is physically located; your city or county for example.  However, if you ever want to expand outside of the particular geographic area where your business is located, maybe even just to the next city or county, you may be prohibited from doing so if there is already a business using the same or a confusingly similar mark in the area you wish to expand into.  With a federal trademark registration, you are presumed to be the exclusive user of your trademark in the entire U.S., whether you have an office in a particular geographic area or do business in a particular area or not.  As a result, with a federal trademark registration, you can expand with confidence, knowing that you can prevent others from using a same or similar name, slogan or symbol anywhere in the U.S.  Having a federal trademark registration does not guarantee that you won’t run into users of unregistered trademarks that have rights senior to yours.   Even if you have a federal trademark registration, if there is a business that has been using the same or similar unregistered trademark longer than you have, that business could have rights that are senior to yours, despite your federal trademark registration.  For example, if there is a business whose first date of use of their unregistered trademark pre-dates your first date of use for the same federal trademark or their use of an unregistered trademark occurs before the date that you obtain your federal trademark registration, they may have rights senior to yours, but those rights will be limited to the particular geographic area in which they do business.  As a result, the junior user of a mark who obtains a federal trademark registration will have rights superior to those of the senior user of the same unregistered trademark everywhere else in the U.S., even though the senior user has superior rights in their particular geographic area.  As a result, the junior user of a mark who obtains a federal trademark registration can essentially “trap” the senior user of the mark in their current geographic area and prevent them from expanding their business by preventing them from using their unregistered trademark outside of their current geographic area.

6.   Make your business name an asset

Procuring a federal trademark registration for your business name, logo or slogan adds real value to the bottom line of your business.  A federal trademark registration is an asset that increases in value over time as your trademark becomes better known by the consuming public and your brand increases in value.  If you have a federal trademark registration for your business name, you can transfer those rights as part of selling your business or you could retain the ownership rights and just license the use of your trademark to the buyer.  In many instances, particularly in the sale of businesses such as restaurants, funeral parlors and hotels, it’s the name and goodwill associated with the business that holds the real value.  Be careful when purchasing businesses that you obtain the rights to continue using the name, slogan and logos associated with that business, as part of the sale, if that’s what you plan to do.  These rights have to be specifically transferred in writing.  You don’t want to purchase a restaurant, hotel, funeral home or some other business, and assume that you are purchasing the rights to use the name, slogan or logo previously associated with the business and it turns out you are not.  You don’t want to be in the situation where you purchase a business without the rights to use the name of the business, and have the previous owner use your money to open up a competing business using the business name you thought you were purchasing the right to use.  If you plan to franchise or expand your business to other states or other countries, you need to have a federal trademark registration to be able to prevent other businesses from using the same name or a similar name to compete against you and confuse consumers seeking your goods and services.

5.  If someone else uses your federally registered trademark and they are found liable for trademark infringement, you can obtain monetary damages from them.

A trademark registration is not just something that is nice to have or pretty to look at; you can use it to protect your brand and recover monetary damages from someone who infringes or misuses your trademark.  If you are successful in a lawsuit for trademark infringement, you can recover as damages: 1) actual damages suffered by your business as a result of the infringement, 2) the profits made by the infringing party as a result of their infringement, and 3) the costs you incur filing a lawsuit for trademark infringement.  The court may also award attorney’s fees as damages for trademark infringement, but only in exceptional cases.  Actual damages to your business resulting from the infringement can include a reasonable royalty payment for the infringer’s unauthorized use of your trademark.  You can also recover as actual damages the cost of any corrective advertising you may have had to do to correct consumer confusion and the costs you may have incurred to repair any injury to the goodwill and reputation of your business caused by the infringement.

4.         A federal trademark registration can be used as a basis for obtaining a trademark registration in foreign countries.  Once you obtain a federal trademark registration, due to certain treaties and agreements that the U.S. has entered into with other countries, the process for obtaining a trademark in other countries is streamlined, and can save you time and money.  The same holds true for holders of trademark registrations in foreign countries who want to obtain a trademark registration in the U.S.

3.  The possibility of incontestability

After you have continuously used your federal trademark for five years, you can file for a declaration of incontestability.  This incontestability provides automatic proof of the validity of the mark, the registration of the mark, ownership of the mark and the owner’s exclusive right to use the mark.  A declaration of incontestability increases the value of the mark and the ability to legally protect the mark.  A cease and desist letter from the owner of an incontestable mark is very powerful because it leaves few remedies for the alleged infringer to attack the legal validity of the trademark.

2.  A trademark is one of the most efficient and flexible communication and marketing tools

You can use your unique trademark in your advertising, as your domain name, in your social media tags, etc.  Your trademark contains messages about your brand, the experiences of your customers with your products and services, your customers’ expectations of your business, your reputation, the quality of your products and services and the lifestyles and characteristics of your customers.  A trademark has the ability to communicate all of these messages at once.  Just think:  What do we think of when we see the trademarks for Mercedes or BMW?  What do we think about someone who purchases a Mercedes or a BMW?  What do those trademarks say about the quality of the goods and services of the companies they represent?  The ability to communicate so much information and so many different kinds of information with a single symbol, slogan or logo is an extremely powerful and versatile marketing tool.

1.  Trademarks are a bargain.

It costs as little as $225 (The fees for filing a trademark application were increased by the U.S. Patent and Trademark Office by $75 on 1/14/17) and as much as $400 to file a trademark application depending on which application (there are three) you choose.  In addition, it costs only a few hundred dollars to file the maintenance documents necessary to maintain a trademark registration as active.  In order to maintain your trademark registration, you are required to file certain maintenance documents to confirm to the U.S. Patent and Trademark Office that you are still actively using your trademark in commerce.  This allows the U.S. Patent and Trademark office to purge unused and abandoned trademarks from the active trademark registry.  These maintenance documents also allow you to indicate any changes in the goods and services being used with your trademark.  As long as you file your maintenance documents timely (between the 5th and 6th yr anniversary of your registration, between the 9th and 10th yr anniversary and every 10 years thereafter) you can have your trademark forever.  Here are a few of the oldest trademarks that are still active today:  COLT- first registered in 1889, Quaker-first registered in 1895, Pepsi-Cola-first registered in 1896, and Mercedes- first registered in 1900.