Trademark Rights for a New Company February 12, 2016 19:45

Despite what you may have been told, registering your new fictitious business name, corporation, or LLC does not protect your trademark rights.  And, even if you are able to file and obtain a company name in your state or county, it does not mean that your use of the company name as a trademark in the marketplace is without some risks.  Let me explain.

What many business owners forget is that U.S. trademark rights derive from the actual use of a word, logo, or other distinctive symbol directly associated with specific goods and services.  You should be aware that, third parties may have prior rights in the same or a similar trademark and your use could prompt a “cease and desist” letter, or worse, a trademark infringement lawsuit filed against you and your company.  The fact that you may have made a successful registration for a new company, corporation, LLC or fictitious business name is not a defense in a trademark infringement action against you.

Therefore, if you plan on using your new name as a trademark for specific goods and services, please consider taking the following steps:

Preliminary Trademark Search

A preliminary search of federal applications and registrations of trademarks in your planned industry or “field of use,” helps identify third parties who have taken the time and expense to formally protect the same or similar trademark or brand with the U.S. Patent and Trademark Office.  The cost to obtain such a search generally runs between $300 and $500 (USD) and includes basic legal advice on how to proceed.  Such a search helps you identify potentially serious obstacles that you should be aware of before you make any commitments or spend money on packaging, websites, and other materials with the brand. 

Full and Comprehensive Search 

A full search is exactly what it sounds like. This is a more thorough search of trademarks, domains, logos, and designs in the United States – both registered and unregistered, and helps locate common law references of third parties who have made use of their marks and business names.  There is also significant online research done in looking for trademarks on the web.  If you are going to be making substantial investments of money and time and commitments which cannot be readily reversed or discontinued, it is wise to obtain such a search.  The cost of these searches generally runs between $1,500 and $2,000 (USD).  You can never get a guarantee that your mark is problem-free when you launch, but this is the type of search that most major brand owners obtain before any launch.

Federal Trademark Filings

Once you have cleared your trademark and start to use it directly associated with specific goods and services you will immediately develop what are known as “common law rights” in your trademark.  These rights extend to the specific geographic areas of the United States where you have use.  But for most major brands where a significant investment is being made, owners first file federal trademark applications to register the brand name for those goods and services.  An “Intent-to-use application” may be filed and will enable you to reserve your rights for several years before you launch. 

To obtain a federal trademark registration you eventually will need to make use of your brand name for specific goods and services (in some cases, foreign-based entities may obtain a U.S. trademark registration without use).  When that registration issues, you then have nationwide presumptions as to exclusivity, and your “constructive date of first use” goes back to your original filing date.  The cost to obtain a federal trademark registration varies greatly depending upon complications that might arise during the process, the scope of your protection, and how long it takes you to prove use.  But a basic filing in a single category that does not encounter great difficulty should cost about $1,200-$2,000 to obtain.  

State Trademark Issues

Trademarks that are descriptive of a feature of the products or services or that are a surname or geographic location might not be protectable at the Federal level until there has been use for a long time.  Therefore, it is good idea to get more information before you launch if you think this might be an issue. For example, if a product or service is “illegal” at the Federal level, such as a product that includes medical marijuana, you will be unable to register that trademark with the U.S. Patent and Trademark Office.  In those cases, and if your product or service is legal in your state, a state trademark filing may be the best course.

All 50 states and Puerto Rico have Trademark Registers and some businesses may obtain a state trademark registration, especially in their own jurisdiction.   

International Registration

Trademark rights are territorial.  So even if you obtain a trademark registration in the United States of America or make a trademark use in the USA without difficulty, this does not develop rights in other countries.  If you plan to use your trademark abroad, serious consideration should be given making appropriate searches before you decide to file for a trademark.  In most countries outside the U.S. and Canada, trademark rights derive from merely obtaining a registration. Therefore, in some special situations it is more important to get a trademark registration in a foreign jurisdiction than in America.

If you are interested in searching or filing for any trademark rights in the United States or elsewhere in the world, or have other trademark questions, please contact us at filings@american-startup.com and we will refer you to one of our trademark experts.