Are trademarks worth the time and money?

I know they are not too expensive, but is getting an official Trademark really worth it or do you have sufficient rights by simply using a name or mark?

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7

Hi Barbara,

It depends on the business. Very few law firms in the US register their trademarks. Of course, in the US they rely primarily on surnames. Most single location restaurants do not trademark their names and probably do not need to register. At the same time, some businesses pay tens of thousands of dollars annually for trademark rights and you imagine they believe the trademarks are worth the cost. So what are some of the factors?

1. Some of our clients have registered a trademark in the US and maintained it for 20 years for a total of $3000 (lawyer + USPTO cost). So the bar for worth it might be $150/yr of business value.
2. Are you geographically mobile? Many businesses like a dentist, a restaurant, or a dry cleaner are relatively stationary. Common law trademark rights will inhibit others from moving into their geographic territory with a similar mark and they don't care if someone in the next state is using their name. If you are franchising, you don't want to wait until you've spread half way across the country to find out someone else has rights in your trademark.
3. Does the trademark differentiate your goods/service? A product for a child becomes more valuable for many if they see 'Disney' on it because Disney has a good reputation making products for children. If someone is purchasing a service because Barbara Ciosek is providing that service, they don't care what trademark you are using. If they are buying commodities, looking for the cheapest can of beets on the shelf, they don't care about differentiation. If you want differentiation of your goods/services and you want consumers to place value in a trademark, you should register that trademark.
4. In my experience, businesses will often respond to cease and desist letters by changing the trademark they use when economically feasible if you have registered the trademark. Without a registration, they do not seem respectful of common law rights. Not a big deal if you are not in a situation where you are likely to encounter an infringer (see 2.), but otherwise c&d letters are much cheaper than litigation.
5. What is the cost to the business to change the trademark if you learn someone else has developed rights in the mark as well and you cannot grow your business without changing the trademark? This is the risk of not registering. And it may be that replacement cost is not significant enough to bother registering until you've been in business for a couple of years.

Others may think of additional worthwhile considerations, but I hope this helps.

Good luck,
Todd

5

Hi Barbara,

Yes, you do accrue rights in a mark just by using it. There are, however, a lot of advantages to registering the mark, e.g., damages you can collect for infringement, incontestability after a certain time period, increased difficulty of anyone contesting the mark, etc. For most start ups, however, I tend to recommend to just register - especially if it is a very unique/original name - which are very easy to register typically.

Justin

4

Barbara,
Todd's answer covered a lot of good reasons for/against registering your Trademark. Here a reason to consider a Trademark Search:

"Use of another's trademark (or one that is confusingly similar) is infringement and the basis for a lawsuit for damages for unfair competition and/or a petition for an injunction against the use of the infringing trademark."...

Even if you do not register the Trademark, knowing if there is a similar trademark could save big later on.

John Mocker
Business & Personal Insurance

4

HI Barbara,
There are several key benefits obtained only through registration. These include:
i) Your filing date becomes a nationwide constructive date of first use and priority over third parties;
ii) Only a registered mark can become incontestable after five years. Incontestable marks cannot be challenged on certain grounds enumerated in the Lanham Act, including on grounds that the mark is merely descriptive. This can be a huge advantage in a trademark dispute over such a mark;
iii) Registration creates an automatic right to sue in federal court and, in certain cases, to recover treble damages and attorneys’ fees (In counterfeiting cases statutory damages are also available);
iv) Registration creates a legal presumption of ownership and validity, shifting the burden of proof on both issues to the defendant in litigation;
v) The application provides a basis for enjoying the benefits of the Paris Convention and Madrid Protocol when seeking foreign protection;
vi) The registration can be recorded with U.S. Customs in order to prevent the importation of infringing products;
vii) Registration includes the right to use the ® symbol;
viii) The presence of the mark on the federal trademark register serves to deter third parties from adopting confusingly similar marks; and
ix) Registration is a key basis for obtaining relief against domain name squatters both under the Anticybersquatting Consumer Protection Act and the ICANN Uniform Dispute Resolution Policy.

Fights over common law rights can be brutal and expensive as it is often necessary to prove use and/or reputation on a location by location basis. This can lead to situations where each party is accorded rights in a limited area which inteferes with business expansion.

Best,

Larry

2

Yes they are! A few years ago I was handling a project that I was trying to attract some investors to raise capital and I didn't have a trademark on it. Sometime after that a well known organisation in my country used the same same material.

But because I didn't trademark my stuff and they're a big organisation with deep pockets to afford the best lawyers, there was no way I could win so I just had to let it go.

Now I've learnt my lesson. I trademark my all relevant stuff now. I'd say trademarks are well worth the time and money just to be on the safe side.

2

In addition to Todd Sullivan's very thorough and good answer, the USPTO website has great information to demystify the subject here: http://www.uspto.gov/trademarks/basics/index.jsp

If you decide to proceed, please understand that a trademark filing is NOT a DIY project! There are traps for the unwary and the fee is nonrefundable so it's worth hiring a professional.

2

In Europe, if you have a registered trade mark, you can use customs authorities in each member state to look out for and seize incoming infringements and counterfeit goods. You can't do that with unregistered marks. That alone makes registration worthwhile.

Also, in the UK, it can take 5 years to get enough goodwill to defend an unregistered mark whereas if you file a trade mark application, you have 5 years before you have to use it.

If you have the resources and a sufficiently distinctive brand, registration's a no-brainer.

2

Hi, Barbara,

Outside of "common law" jurisdictions (such as the US and UK, for example), most countries ONLY provide trade mark rights through registration rather than use, and so it is essential to register in those jurisdictions if you are going to be trading there. Likewise, if you are going to be sourcing goods from foreign jurisdictions for sale into the US, I would strongly advise that you register your trade marks in those foreign countries, because if you do not, you may well find that someone else (e.g., your manufacturer) will, and they can then "hold you to ransom" if you try to change your source. This is particularly true in China, where the manufacturer can notify customs and have any goods being shipped out of China bearing the mark seized and, if necessary destroyed.

For more information, see http://www.murgitroyd.com/news-resources/webinar-recordings "Protecting Your Brands - The Dos and Don'ts of Emerging Markets"

In "common law" countries, there are advantages to registration of marks as well as use in that a registration will give you nationwide coverage, whereas rights acquired through use tend to be local. It is also much easier to prove the existence of registered rights, and thus they are easier to enforce. Finally, in most jurisdictions outside of the US and Canada, because there is no requirement to prove use in order to secure registration, it is possible to obtain much broader protection in terms of the number of goods or services covered.

Hope this helps!

Chris

1

You've received a lot of great answers and I won't repeat them. I'll just add a few comments on these answers based upon my 18 years of practice as a trademark attorney.

It's true that in the U.S., you acquire rights in your mark merely through use which can be enforceable against subsequent similar users of a similar mark in your immediate, actual market without needing to federally register the mark. However federal registration makes it easier to enforce those rights and expands your rights nationwide. Of course, that assumes that your business needs nationwide protection (i.e. not a more local business like real estate, a single restaurant, etc.) and also that your business will be capable of financing that enforcement. That enforcement is also a greater issue if you plan to license your mark (because of the risk that the licensee will challenge your mark ownership) as well as if you are selling goods and you want to stop infringing goods at U.S. borders because a U.S. registration can enable U.S. Customs to seize infringing goods. A trademark registration also enables you to acquire domain name rights in that mark, often with priority or earlier than others and possibly even take away someone else's ownership of that domain name, if the other entities interested in the domain name are subsequent to your adoption of the mark and they have no "legitimate interest" in using that mark as a domain name.

Assuming that for at least the first few years of your business you do not expect to need to enforce your mark or will not have a budget to do so, you may still consider registering your mark "defensively" to maintain a record in the U.S. Patent and Trademark Office that you own your mark for X goods/services which could deter others in your line of business from attempting to adopt your mark. As someone mentioned, other businesses seem to respect registered marks more than unregistered possibly because of their misguided belief that a registration is necessary to actually confer trademark rights in the U.S. Also, a federal registration can be viewed as a business asset and valued as such.

In many other countries, if you are doing business outside the U.S., a registration IS NECESSARY in order to acquire rights in the mark and you may even be considered infringing another's mark if you use your mark in a country without a registration while someone else subsequently registers that mark.

But, as Mr. Mocker stated very well, whether or not you decide to register a mark, it is most important, and I would say critical, that you at least have the mark searched by a competent trademark attorney to ensure that it is available for use. Because an existing similar business using that mark or a sufficiently similar mark could at any point in time demand that you stop using your mark and that business also would not need to have registered their mark (they just need to be USING the mark in the same market as you). Presumably, you will not want to be forced to change your mark or business name once you have selected it and invested in it to whatever extent that you are investing in the marketing of your business.

Lastly, I would encourage you to review the material that Ms. Wolforth linked on the USPTO website to get a better understanding of trademarks.

Good luck.

Alex Butterman

Anonymous User
1

Hi Barbara,

It is worth it for a number of reasons, especially if your enterprise has a reach in different parts of the country, e.g. by offering goods and services through a website. This is because you get certain additional rights when your trademark is registered as opposed to when it is not registered. The benefits in a given context are best left for a discussion, so feel free to be in touch if you want to have a conversation.

Ariadni

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