Not So Common Law

So you're surfing around the internet one day and you decide to type in the name of your business, followed by ".com," to see what comes up. To your surprise and horror, there is another company in the same line of business as you located only a few zip codes away! NOW, you're anxiously clicking, clicking, clicking around the internet to determine if the other business has already registered a trademark on the name or if you can register for it first? You perform a Boolean search on the United States Patent & Trademark Office (USPTO) website and it appears that they have NOT registered a trademark on it! Phew! Without delay, you call your I.P. attorney and ask him to quickly file an application to register on the Principal Register a trademark on your company name. Once you've secured the rights to your trade name, you will then be able to formally demand that the other business cease and desist from using your name further. You will be able to do this because federally registered trademarks have rights that trump trademarks governed only by common law. . . right? Sometimes.

First, it is important to recognize that both registered and non-registered trademarks are eligible for protection under the Lanham Act. As you've probably gathered, the Lanham Act defines the statutory and common law boundaries for trademarks and service marks. {1} As such, while rights can and do differ between registered versus non-registered marks, what is all-important is the date of first use of a mark in commerce, irrespective of its registration, or lack thereof.

So let's look to the common law. What is common law? In this context, the term 'common law' indicates that trademark rights have developed as a result of the use of a trademark in commerce. Unlike a federally registered trademark, a common law mark is not governed by statute, but rather, by the state your mark is used in via a judicially created scheme of rights. {2} Subsequently, these rights are available to you without the need for registration of any kind. However, and significant, common law trademark rights are limited to the geographic area in which the mark is used. {3} A federally registered trademark, on the other hand, can provide rights on a national and even international level. Keep in mind, I said can and not will. If a trademark is registered with the USPTO after another person or business has acquired common law rights to the same or similar mark in a certain geographic location or locations, then the owner of the federal registration would have rights to the use of that mark in all territories but for the ones where the common law rights holder uses the mark. For example, if an energy drink without federal registration was being sold under the name, "NRG," but only in California, then the rights to that name would exist only in California. If another company began to advertise another sports drink under that same, yet federally registered name in Florida, there would be no trademark infringement. However, if the Florida company decided to distribute its product on a nationwide basis, it could do so in 48 other states without issue. If and when it entered into California however, it could face a claim of trademark infringement without a proper licensing agreement or other arrangement having been made with the California trademark owner.

So, how do you know if someone has common law rights to a trademark or service mark similar or the same as a mark you wish to file? Well, as you can imagine, without registration of any kind being necessary, it can be very difficult to determine if a mark is already being used. Consequently, when you're calling your I.P. attorney to ask that he or she secure rights to a particular mark, you should first request that a comprehensive trademark search be performed. The results of such will provide you with information on the same and similar marks in a number of categories including, (1) federal registries; (2) state registries; (3) common law data bases and; (4) domain names. Not only will a thorough review of the findings allot you a significantly enhanced idea as to whether you will infringe upon another's rights, but it can potentially save you a great deal of time and money (i.e., circumvent potential infringement actions; avoid the high costs associated to redoing marketing and advertising campaigns; etc.).

An ounce of prevention is worth a pound of cure!

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{1} See http://legal.web.aol.com/resources/legislation/tradeact.html {2} See http://www.bitlaw.com/trademark/common.html {3} See id.