You read that right. While it is often a smart business move to protect a brand with a federal registration, that is not always the case. How do brand owners tell the difference? They can start by asking themselves the following questions.
First, how important is the brand to your business? Is it the name customers associate with the goods or services you are offering? This is referred to as the “house mark,” and is often the name of the business. Sub-brands for product lines come and go, but the house mark appears on everything you sell. You’ve made a commitment to the name, and it would be wise to seal that commitment with a federal registration.
What about the sub-brands? Well, you can probably wait on those. Unless it is part of a major marketing push, see how customers react to the product before deciding whether to register the sub-brand. The reason is because a trademark registration is more than an online application with the U.S. Patent & Trademark Office and a $350 (per class) filing fee. In order to keep the registration, you must use the trademark consistently and continuously on the protected goods or services. That means no design or word changes to the mark, and no breaks in use. It can take close to a year for an application to be assigned to an examiner, and even longer to finally register. By the time you get a registration for a brand in flux or a sub- brand, you could have dropped the product and won’t be able to submit the proof of use required to maintain the registration.
Another question to consider is why you are using the name. Is it merely informational or are you looking to distinguish your business from competitors? Would it damage your business if someone adopted the same or similar name for a competing product or service? Would you care enough to send them a cease-and-desist letter? This “protecting your lane” is what the USPTO expects, should it grant you exclusive rights through a registration. If the effort isn’t worth it, then it probably isn’t worth registering the trademark, either.
Are others trying to pass themselves off as associated with your company or organization? These acts of “false association” are prohibited under trademark law. In fact, allegations of trademark infringement are one of the easiest ways to stop this activity and protect the integrity of your enterprise. Take it from me – I spent my law school days churning out “false association” cease-and-desist letters to protect the American Red Cross trademark.
There could also be public safety reasons to register a trademark. This is particularly true for industries prone to counterfeiting. The consequences of purchasing fake airplane parts or medical devices are catastrophic. Counterfeiting is a higher degree of trademark infringement – it is a civil and criminal offense, and enforced by U.S. Customs and Border Protection. Instead of the usual “likelihood of consumer confusion” standard for trademark infringement, the standard for counterfeiting is use of a mark “identical or nearly identical” to the registered mark. Counterfeiting is a billion-dollar industry that has been linked with organized crime and even terrorist groups. It’s serious business, and you need a trademark registration to stop it.
Are you selling outside of the United States? Before the Internet, this was unthinkable for smaller brands, but these days a foreign market can open up with one click. Protecting your brand overseas is much easier and cheaper with a U.S. registration in hand. The U.S. has been a member of the Madrid Protocol since 2003, giving Americans the ability to use U.S. registrations as the basis to file applications in more than one-hundred countries at one time. There is no need to hire local counsel in the individual country, and the filings fees are greatly reduced. Many of the high-density counterfeiting nations are members of the Madrid Protocol, which makes it easier to file defensive applications against potential squatters (those who file overseas to block, and extort money from, U.S. brand owners). Unlike in the U.S., many of these countries do not require use in commerce to file or obtain a registration.
Finally, there is the long game to consider. Trademarks are business assets, and registrations enhance their value. Federal trademark registrations can be used as collateral in financing deals. If you are seeking investors or potential acquirers, be prepared to answer questions about trademarks as part of their due diligence. Goodwill is another name for brand recognition, and registrations help quantify what can be an otherwise an elusive concept.
Why, then, would a brand owner not register a trademark? You can’t register what you don’t own. Do you know the origin story of your brands? It might be time to track down that clever intern or graphic artist who created it for you and have them sign over the rights, if they have not done so already. If you are starting the process, make sure your contracts include an assignment of all rights.
Are you selling your goods or services across state lines? Congress can only regulate interstate commerce, but there is a long history of Supreme Court cases expanding what qualifies as “interstate.” For example, stand-alone restaurants and hotels are interstate commerce if they serve customers who cross state lines, which is usually the case. If your activities are not interstate, there’s always the option of filing a state registration as a fallback. In New York, a state registration costs $50 and is much easier to obtain than its federal counterpart.
Not all is lost is you don’t register your brands. Trademark protection is based on use, not registration. This protection begins on the date of first commercial use, not the date of registration. While not as strong as the protection granted to a registered mark, these use- based rights are a cushion for brands that might not be “registration worthy” at launch, or ever.
Just because you are waiting on registration doesn’t mean you shouldn’t protect your brands in other ways. Be sure to search any brands prior to adoption. Keep records of all dates of first use. By using the “TM” symbol (not the “R” symbol for registered marks), you will put others on notice that you are claiming use-based rights. Keep an eye out for possible infringers or counterfeits. Otherwise, you might find that you have lost your trademark rights before you’ve even decided whether to register.