Trademark registration - Is it worth the cost?
Trademarks are an essential part of everyday life. They provide consumers with a shorthand way of identifying the source of the goods and services they depend upon.
Whether it’s the trademark for the car we drive or the clothes we wear or even the restaurants where we eat, trademarks denote the companies that provide us with those cars, clothes, and restaurants. They are everywhere.
In fact, trademarks are so important to the U.S. economy that the federal government even has a special set of laws (known as the Lanham Act) that provides protection for trademarks. The Lanham Act even provides a mechanism for registering trademarks so that they can be enforced against infringers.
Trademark registration is not required in the U.S., even for enforcement against an infringer, but it does confer substantial additional rights and advantages to the trademark owner. Similarly, for companies doing business beyond U.S. borders, foreign countries provide their own laws to protect trademarks that are registered in those countries on the basis of a U.S. registration.
Nationwide priority gives trademark protection in a much broader geographical area than a company might otherwise enjoy. Without federal registration, a trademark owner actually must use its mark in an area in order to have protection there. Since most businesses do not spread across the country overnight, national expansion is a risky business without a federal trademark. Without federal registration a competitor may be able to stop a company from using its own mark in the region of the country in which they have established their business.
Use the ® symbol
Only companies with valid federal registrations are allowed to use the ® symbol (an “R” inside a circle) alongside their mark. Doing so provides constructive notice that a mark is claimed as an exclusive right and a defendant cannot claim innocent infringement and avoid monetary damages.
One of the most important reasons to register a trademark is to let the world know that a company claims rights in the mark. Deterrence occurs in two ways. First, the U.S. Patent and Trademark Office will refuse to register any confusingly similar marks. Second, the mark will appear on trademark searches when businesses consider adopting a similar mark. Since the vast majority of businesses would rather avoid a lawsuit, simply letting them know of the prior registration could save tens of thousands of dollars in litigation.
After five years of continuous use of a trademark, the owner can apply for incontestability status. Once incontestability is granted, it eliminates most challenges to a mark. For instance, if a mark is incontestable, nobody can successfully argue in a lawsuit or administrative hearing that the mark is confusingly similar to another mark, that it is functional, or that it lacks secondary meaning.
Sue in federal court
The owner of a federal trademark registration may sue in federal court more easily.
Obtain advantages in court
A federal registration means that if a trademark is at issue in a court proceeding the owner need not prove the mark is valid, that it is the owner of the mark, or that it has continuously used the mark in interstate commerce. Without registration, it can be very costly to prove these elements.
Recover monetary damages
With a federal trademark registration, it is possible to recover an infringement award for triple the amount of actual damages proven, plus attorney’s fees, if there is willful infringement of a mark.
Cybersquatters (those who register someone else’s trademark as a domain name) can be put on hold indefinitely while a court determines what to do with the infringing domain name.
Enlist help from the Customs Service
The owner of a federal trademark registration can receive invaluable assistance from the U.S. Customs Service in stopping importers of counterfeit or gray market goods.
Register in other countries
Any business contemplating international expansion must consider registering their trademarks early on in order to establish priority as the basis for international registrations. It isn’t uncommon for a U.S. company expanding internationally to discover someone else has already registered its mark in other countries. These “trademark pirates” then try to coerce royalties for licensing the mark back to the U.S. trademark owner.
Pirating can almost always be avoided if U.S. companies federally register their marks early on because the date of registration of the U.S. mark becomes the date of priority in the new country.
An opponent will be more intimidated, and a judge or jury more convinced by a company’s position if it holds an active registration. It is human nature to be influenced by the official stamp of approval that comes with registration. Moreover, the failure to register a mark may be perceived as a subtle admission that the mark was never considered all that important. Finally, registration tells potential opponents that the owner takes its trademarks seriously, already has invested money in the trademark, and suggests that it is ready to defend the investment.
The bottom line is that if a company doesn’t register its trademarks, then another company can use the trademark (or something confusingly similar to it) and create havoc in the marketplace. It may even be able to register the mark itself. And when this happens, it puts a company and its valuable products and services at risk.
Securing a registered trademark protects a company’s brand and provides it with the means to prevent someone else from using similar source identifiers and deriving undeserved benefits from legitimate marketing and promotion. With its trademarks registered, a company is within its rights to take actions against parties who have attempted to register conflicting trademarks and those who are operating with conflicting brands and damaging legitimate business.
Companies that do not protect their trademarks through registration may find themselves legally prevented from expanding their business or even having to rebrand themselves.
When you weigh the costs versus the benefits, it is an easy decision. Register your trademarks.