I wrote an article on this topic nine years ago. It seems like an appropriate time for an update. This is because trademarks and trademark law remain a tricky legal property right.

Trademarks are “owned” by the individual or entity that uses the mark as a source-identifier in conjunction with goods or services in commerce. Yet the underlying purpose of trademarks is to protect the relevant consumer. Trademarks are only protectable to the extent the consumer associates that mark with the source of particular goods and services. Any value associated with the trademark is derived from this foundation.

Which brings us to the most important question: how do you get a trademark? It is not difficult. The exact moment you select a word, logo, slogan, phrase, or design – and “use” it in association with particular goods and services in the stream of commerce, it becomes a legal trademark. While the definition of “use” can be nebulous and imprecise, essentially any sales or marketing efforts that target consumers or customers across interstate lines can be proper trademark “use” that breathes life into a mark. This provides what is known as “common law” trademark rights. These rights are absolutely enforceable in a court of law.

The obvious follow-up question is: if getting a trademark is so easy, why should I bother going through the process of applying for a state or federal trademark registration? Or more importantly: what do I get for my money? Registered trademarks provide substantial additional rights and presumptions which can save you hundreds of thousands of dollars in the long run.

Common Law Trademark Rights

 Trademarks “protect words, names, symbols, sounds, or colors that distinguish goods and services from those manufactured or sold by others and to indicate the source of the goods.”[1] A junior user with a confusingly similar mark in commerce is exposed to a lawsuit for common law trademark infringement in state or federal court. Meanwhile, in a linguistic quirk that causes continuing problems, the term “trademark” is often confused with “trademark registration.” They are vastly different things. You should not feel bad though – even practicing lawyers make this mistake. But colloquial uses lead to confusion by the public at large.

In the United States, “common law” trademark rights do exist, and U.S. courts of law will strongly enforce these marks against unauthorized uses. The primary statutory authority for trademarks, the federal Lanham Act, also protects common law trademarks from infringement. While the term “unregistered trademark” has the ring of inadequacy, the owner of an unregistered trademark can still recover monetary damages and injunctive relief against a junior user that has infringed that mark. Remember, trademarks protect the consuming public, even if the “owner” gets to recover monetary damages. As a result, common law marks protect the consumer just as much as registered marks do. This is because the law and public policy cannot allow there to be confusion in the marketplace.

That being said, the United States Patent and Trademark Office would naturally prefer that owners of trademark rights take the necessary steps to formally register all eligible trademarks. It helps to provide notice and information to the relevant consumer. It also helps to organize and identify the owners of trademarks. Registration brings a sense of order to an area of the law that often lacks certainty or predictability.

As an incentive to register trademark rights, the Lanham Act and the USPTO provides additional benefits to those that maintain registered trademarks. These rights are above and beyond the rights afforded common law trademark owners.

Trademark Registration

It helps to remember that your trademark is an extension of you and your business. All things considered, the costs for registration and enforcement are reasonable. It should also be seen as a long-term investment in your business. There is commercial value in trademarks, and your business should recognize this value by acquiring a registration if possible.

There are two ways to register trademarks. In addition to the more popular federal registration, each of the fifty states allows for trademarks to be registered for intrastate uses. For example, I am licensed to practice law in the State of Texas. The Texas Secretary of State permits the registration of trademarks for their use within Texas. These uses must be in Texas, the mark must meet certain standards for “distinctiveness,” and the mark cannot be confusingly similar to any other marks currently registered in Texas for the relevant goods and services.[2] Similar requirements are present in all of the other states for registration.

Most importantly, Texas provides the following benefits for a state trademark registration:

• Registration puts the rest of Texas on notice that you claim ownership of the mark in Texas commerce in connection with the relevant goods or services.
• A certificate of registration is prima facie (rebuttable) proof of: 1) the validity of the registration; 2) the registrant’s ownership of the mark; and 3) the registrant’s exclusive right to use the mark in Texas in connection with the relevant goods or services.
• Texas law provides a statutory cause of action for infringing upon a registered mark.
• It is a crime to counterfeit registered marks.[3]

These are rights which are not generally afforded to common law trademarks. You do not need an attorney to register a trademark with the State of Texas (though it is strongly advised). The application fees are relatively affordable in Texas, too – currently only $50 per “class” of goods or services.

Everything is bigger in Texas, of course, but if you market and sell your good and services nationwide (the Internet has made such “use in commerce” almost standard), acquiring a state-based registration is nice, but it is not as strong as acquiring a federal trademark registration through the USPTO. As an attorney, I recommend seeking to register all such trademarks with the USPTO as soon as possible. The fees are higher than a state-based registration (currently as low as $350 per application). The process is also more in-depth and complicated. The benefits, however, are substantial and your mark is protected throughout the entire country for as long as you continue use of the mark and maintain the registration by demonstrating continuing use in commerce every five-plus years.

In contrast, if you are relying on common law rights and someone infringes your mark in a particular geographic region, you have the burden of proof to demonstrate use and secondary meaning of your trademark in that area, and in any other region where there might be infringers. This often requires survey evidence and hundreds of hours of litigation. The comparison between a $350 filing fee and the after-the-fact costs for a survey expert is itself a selling point in favor of federal registration. The presumption of enforceability and secondary meaning is that important.

The Lanham Act states that all trademarks are subject to registration, with few exceptions. For example, you cannot register a mark that is confusingly similar to an existing mark that is already registered. A trademark being used in commerce that is unique and is not likely to confuse consumers with other marks in commerce is eligible for federal registration in most instances.

In summary, benefits for a federal registration include, but are not necessarily limited to, the following:

• exclusive nationwide use of that mark;
• presumptions of validity in court;
• the right to have the mark be deemed incontestable after five years of use;
• the right to sue for infringement in federal court;
• the rights to receive additional damages from willful infringement;
• the right to recover attorney’s fees incurred following infringement;
• the right to prevent counterfeit goods from importation; and
• and potential international rights and recognitions for use of the mark.[4]

The ability to assert international rights and recognitions should not be overlooked. Your business may be small today, but it is always wise to acquire as broad of legal rights and protections as possible. Additionally, in contrast to state registrations, federal registration allows a mark to be deemed “incontestable” after five years of continuous use – whereby junior users cannot challenge the validity or strength of the mark thereafter.

If you are able to process a trademark application entirely through the USPTO’s online system, an application for one class of goods can be as low as $350 per application (not including legal fees for consulting and using an attorney to help prosecute the application). Total legal costs will vary based on the strength of the mark and the similarity (if any) to other registered trademarks.

In the grand scheme of things, legal costs may initially seem like a lot of money to spend on an intangible word or logo, but the failure to acquire a state or federal trademark registration can be catastrophic if a trademark owner has to fight an infringer and lacks the presumption of validity and the other rights associated with a registered mark. For these reasons, I always advise trademark owners to be proactive. I strongly advise you to seek registration for any trademarks you own, including marks that you intend to use in the near future. In the long run, it will be worth the time and expense. You can thank me later.

If you have any other questions, the attorneys at McCathern, Shokouhi, Evans are happy to assist you. I am available by telephone or email to discuss anything regarding your trademark needs.

[1] Trademark Manual of Examining Procedure § 1202 – Use of Subject Matter as Trademark (https://www.uspto.gov/sites/default/files/documents/TM-TMEP-7th-edition.pdf)

[2] See Tex. Bus. & Com. Code §§ 16.001 et seq.

[3] See also Tex. Bus. & Com. Code § 16.060 and Tex. Penal Code § 32.23.

[4] https://www.uspto.gov/trademarks/basics/why-register-your-trademark

About the Author

Attorney David L. Clark is Senior Counsel in McCathern’s Houston office, where he has developed significant expertise in trademark law and other intellectual property matters. He advises and represents clients in securing, protecting, and enforcing trademark rights, as well as in disputes involving copyrights and trade secrets. In addition to his IP focus, Mr. Clark’s practice spans Business & Commercial Litigation, Business Disputes, Civil Litigation, and Media & Entertainment.