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Under the common law, there was and still is no specific requirement that a business register its marks in order to receive trademark protection. The first person or entity to use a mark in commerce in connection with a particular type of goods or services is entitled to protection in the respective region where the mark is used. For centuries, proprietors have observed the “first to use” approach, racing to be the first one to use a distinctive mark in order to be bestowed the consequent legal right to exclude others from using the same mark to peddle similar wares.
While common law protection of trademarks is still extended to the first established use, registering the mark at the federal level is typically more advantageous, and helps to avoid many limitations of the common law approach. There are several shortcomings from relying on a “first to use” scheme to establish trademark rights. Moreover, the added benefits of registering the mark at the federal level normally make the undertaking worthwhile.
A trademark is any word, symbol, or phrase used to identify a seller or manufacturer’s products and to distinguish them from products of another origin. As mentioned, the common law extends a trademark right to the first user of a mark, but that right is limited to the geographic area of use or the geographic reputation of the mark. This opens the door for competing use of the same mark, and sets the stage for future conflict when either business expands. It can also destroy value in an acquisition in which part of the target’s value is derived from the mark or marks that identify its goods or services.
Federal registration of a mark can prevent the possibility of competing uses in other regions of the United States. A trademark registration provides nationwide notice from the date of registration that indicates who owns the mark. This discourages attempts to claim a good faith subsequent adoption and use of the mark. The Trademark Office also cites prior registrations against applications for confusingly similar marks and will refuse to register such marks. This adds another valuable layer of prevention to help protect the value of your trademark asset.
Additionally, a federal registration is practically indispensable because it treats the mark as though it was in nationwide use as of the filing date of the application. Because first use prevails in the trademark system of the United States, registration can serve as valuable evidence should another entity challenge ownership rights over the same mark. The related goods and services listed in the registration will have a presumption of validity and exclusive use of the mark. Over time, this protection matures. After five years of continuous registration, the mark receives heightened protection, including the possibility of obtaining “incontestable” status, a far more powerful tool to dissuade others from using the mark without having to incur the expense of litigation, and a reassuring sign for an acquirer that the business’s mark is secure.