The recent publicity about the decision by the U.S. Patent and Trademark Office (PTO) to cancel the Washington Redskins' trademark registrations put a spotlight on the importance of federal registration and indicated a good deal of confusion about the significance of the decision. To clarify, the decision (if it survives appeal) would mean that the Redskins lose their federal trademark registrations, but it would not mean that they would no longer be able to use their mark, and it would not mean that they would be powerless to prevent infringement.
Trademark rights arise from use of a distinctive mark in connection with providing goods or services. With goods, you put the mark on your goods and sell them to the public, and you start acquiring trademark rights. With services, you use the mark in advertising or marketing services, and you actually provide the services, and you start acquiring rights. Without registration, those rights are normally limited to your market area. Even with their registrations cancelled, the Redskins would still have those common law rights.
So, you ask, why should I register my trademark? Because a federal registration provides several significant benefits over common-law rights.
First, federal registration provides nationwide priority. That means that, as of the time your application is filed, you have staked your claim to the mark throughout the country. Under the common law, two businesses could legally operate with the same name and offering the same goods or services as long as their territories were far enough apart. The idea was that consumers would not be confused because, in all likelihood, they would only know about their local business. But both businesses are boxed in: neither would be able to expand into the other's territory. A federally-registered mark, on the other hand, will prevent even a distant business from acquiring superior rights in a confusingly similar mark after the federal application was filed. In other words, your federal registration means that nobody can come along after you filed to register and prevent you from using your mark in some other part of the country. If that distant business already had common law rights when the application was filed, the federal registration will not extinguish those rights but they will be "frozen" as of the filing date.
Second, federal registration provides notice of your rights in the mark. Anyone contemplating adopting a mark can search the PTO's database to find registrations and pending applications, along with information about who owns the mark and what goods or services it is used with. This avoids trouble because competitors who know of your rights will normally try to steer clear of your registered mark. The registration also allows you to display the ® symbol along with your mark to give notice of your rights.
Third, a federal registration provides evidence of your ownership of the mark. In a lawsuit, the owner of a registration can introduce it as evidence of ownership of the rights in the mark described in the registration. Although the other side can introduce contrary evidence, the practical effect of the registration is strong. After the fifth anniversary of the registration, if the mark has been continuously used during that time, the owner can file for "incontestability" status, which makes it very difficult to challenge ownership of the mark.
Fourth, a federal registration allows you to bring a lawsuit for infringement in federal court, and in some cases allows you to seek enhanced damages. For example, in the case of counterfeit products that are covered by a federal registration, the owner of the registration may be able to recover three times the damages that would otherwise be available.
Other benefits relate to international trade. A federal registration can provide a basis for registering the mark in foreign countries, and also allows the owner to record the registration with U.S. Customs and Border Protection to help prevent importation of infringing products.
If you ever decide to sell your business, federal registrations can make it more attractive to buyers. They show that you have your "ducks in a row" and have done what is necessary to protect your intellectual property rights. They also confirm the value that goes along with the business – they make the intangible trademark rights a little more concrete.
Finally, the registration process can raise red flags about any problems that might arise as a result of your use of your mark. When you file a application to register your mark, an examining attorney at the PTO will compare it to the PTO's database of existing registrations and pending applications and notify you if they find a problem such as a similar registered mark. Later in the process, others owning marks that they think are so similar that yours would cause confusion have the opportunity to oppose registration. If there is to be a problem, it's always better to know early rather than learn of it after you have invested significant time and money in building up brand recognition.
So a federal registration comes with a lot of benefits, both in protecting you from infringers and in protecting you from possible infringement claims. Registration is something all businesses should consider for their significant trademarks or service marks.
As for the Washington Football Team, stay tuned. They filed an appeal of the cancellation in the Eastern District of Virginia on August 14.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
