You may not even know it, but your business already has trademarks. Trademarks are the branding devices such as logos, slogans, company names, or product names that a business uses to stand out from its competitors. It is a business’s branding that customers remember and use to identify the source of products and services, and recommend those products and services to others. A business may use trademarks on everything from business cards to billboards.
Whether your business is a start-up or an established business, registering your business’s trademarks with the United States Patent and Trademark Office (USPTO) can be an essential step to protecting your business’s branding and the goodwill associated with it. While the use of a trademark will provide your business with some basic rights in your local market area, rights in the trademark will be stronger nationwide and easier to enforce if the trademark is registered with the USPTO.
Here are the top 5 reasons you should register your business’s trademarks:
- Gain Legal Rights Which May Help Prevent Competition from Using a Trademark Like Your Business’s
Whether your business is selling a product or a service, as a business owner, you’ve worked hard to stand out in your field, develop repeat customers, and build a top-notch reputation. You, like every business owner, want to protect the business from a competitor who attempts to benefit from your business’s hard-earned reputation and goodwill. If you register your business’s trademarks, your business gains legal rights which may help prevent competitors from unfairly using the same trademark or a confusingly similar trademark to promote their business.
Here's an example. Oldbiz has been manufacturing exceptional widgets for twenty years under the brand name Old Time Widgets. A competitor, Newbiz, has recently emerged in the widget market. Oldbiz soon learns that Newbiz is manufacturing a cheap, poorly made widget under the brand name Old Timer Widgets. Not surprisingly, customers begin to purchase the less expensive Old Timer Widgets manufactured by Newbiz under the mistaken belief that they are manufactured by Oldbiz, the long-time widget manufacturer with an excellent reputation. Now, Oldbiz has lost sales, and has suffered harm to its excellent reputation because of the confusingly similar branding used by Newbiz for its inferior widgets.
If Oldbiz had registered its Old Time Widgets trademark, it would have had stronger legal rights than without registering it. With the registration, Oldbiz would have had more leverage, which would make a satisfactory outcome more likely. For instance, Oldbiz could have had more legal leverage to confront Newbiz by sending a cease and desist letter, negotiating a settlement, or, if all else failed, instigating litigation.
In some cases, attorneys’ fees, treble damages, statutory damages, and the infringer’s profits may be awarded to the plaintiff after litigation if the infringer’s infringement of the registered trademark was willful. These severe damages alone can intimidate an infringer from continuing the litigation fight to the bitter end. A critical reason to register your business’s trademark is to robustly protect the trademark and your business from competitors who may seek to benefit from your business’s success.
- Registration Puts the Public on Notice
If you register your business’s trademarks with the USPTO, you are providing legal constructive notice to the public on a national level that your business owns the trademark and has the rights that accompany the federal trademark registration as of a particular date. Putting the public on notice of the trademark rights of your business can be a critical component in the resolution of a trademark dispute. It is much easier to prove trademark infringement by a competitor by using the federal trademark registration to establish the exact date whereby your competitor had legal constructive notice of your business’s use and ownership of the trademark.
Returning to our example above, if Oldbiz had registered Old Time Widget as a trademark with the USPTO, Oldbiz could have used the date of registration in a cease and desist letter, in negotiations, and in court to prove that Newbiz had legal constructive notice of Oldbiz’s prior use and ownership of the Old Time Widget trademark as of the date of the registration. Establishing willful trademark infringement by Newbiz for its use of the confusingly similar trademark, Old Timer Widgets, would be much easier if Oldbiz had a registered trademark showing prior use and ownership.
In addition to achieving constructive knowledge of your business’s trademark rights, registering the trademark with the USPTO will allow your business to use the highly coveted “®” symbol wherever the trademark appears. This symbol is reserved for those who have registered their trademark with the USPTO. Use of the symbol provides additional notice to the public of your business’s exclusive rights to the trademark.
- Registration Establishes a Presumption of Ownership
Additionally, trademark registration with the USPTO provides your business with the presumption of ownership of the trademark, which is very helpful when dealing with an opposing party who is infringing on your business’s trademark rights. Once successfully registered, your trademark is presumed to be a valid trademark and validly owned by your business. This is a strong presumption that weighs heavily in your business’s favor should a trademark dispute be litigated. Your opponent in litigation would need to overcome this strong presumption in order to prevail in a trademark infringement action in which your opponent also claims ownership of the trademark.
In our example of Oldbiz and Newbiz, if Oldbiz had registered Old Time Widgets as a federal trademark with the USPTO, Oldbiz would have thereby established a presumption of ownership and priority of use of the trademark. Should Oldbiz then pursue Newbiz in an action for trademark infringement, this presumption of ownership would be very difficult for Newbiz to overcome as it would be required to present substantial historic evidence of prior use of Old Timer Widgets.
- Registration Establishes Nationwide, Federal Rights
Unlike registering your business’s trademarks in your business’s home state, a federal registration with the USPTO means your business is establishing nationwide, federal trademark rights. Considering most businesses operate a website and can easily establish customers all over the United States, most business owners should consider the advantages to securing nationwide trademark rights.
Back to our example of Oldbiz and Newbiz: Oldbiz mainly operates in Wisconsin. Newbiz has a principal place of business in Florida. Both operate websites which anyone in the United States may access and use to order widgets. Neither company has federally registered its trademarks. Now because both companies have been developing some limited rights based solely on use and not a USPTO registration, any fight between the two businesses over trademark rights will likely be lengthy, tedious, and very expensive. If Oldbiz had registered its trademarks prior to Newbiz’s entrance to the market, Oldbiz would have established nationwide rights in Old Time Widgets and anything confusingly similar. These rights would be senior and take priority to any rights acquired by Newbiz for use of its confusingly similar trademark.
Establishing nationwide rights means your business is protected on a greater scale than either registering the trademark with your business’s home state or by gaining certain rights by solely using the trademark.
- Increase Your Business’s Value
Your business’s brand, reputation, and goodwill are essential assets. Registering your business’s trademarks means you are proactively protecting your business’s intangible assets. In fact, when you register your business’s trademarks, your business becomes more valuable partially because of the legal protections (as discussed above) that federal registration provides.
Registering your trademarks with the USPTO not only protects your valuable assets, but the registration itself can add value. In certain highly-competitive, brand-focused industries like technology and the growing wine, beer, and distilled spirits industries, a strong portfolio of federally registered trademarks that thoroughly protects all of your business’s branding, will substantially increase the value of the business. Even if your business is not in a brand-focused industry, knowing that a seller has proactively registered its trademarks can give a prospective buyer peace of mind and some assurance that it will not have to incur the expense of attempting to protect and defend unregistered trademarks against competitors. Gaining the legal protections of USPTO trademark registrations means your business’s intangible assets become more secure and valuable.
Business owners should register their trademarks as early as possible to establish full protection under federal law and prevent competitors from registering the same or confusingly similar trademarks. The benefits of federal registration almost always outweigh the expense.
The attorneys at Stafford Rosenbaum LLP can assist you in analyzing your business’s branding and trademarks and recommend a strategy for the use and registration of your business’s valuable trademarks. If you wish to discuss registering your trademarks or any other intellectual property concerns, please contact Scott Seid or Laura Lamansky the authors of this article, or any of the attorneys in the Intellectual Property and Entertainment Law practice team at Stafford Rosenbaum LLP.