Trademark registration is not required for a mark to receive protection. So long as the mark is distinctive and used in commerce, it will have protectable common law rights. However, registering a trademark has many benefits. I am going to explain these benefits and examine the differences between state and federal registration to help you better understand your options.
State vs. Federal Registration
The two biggest differences between state and federal trademark registration are (i) the geographic scope of protection, and (ii) the cost and complexity of registration. Ultimately, this choice is a strategic one, and will come down to the position your business is currently in and where you intend for it to go.
Geographic Scope of Protection and Priority
Federal registration generally requires that the mark be used in interstate commerce and grants protection throughout the entire United States. State registration requires that the mark be used in intrastate commerce and grants protection only within the territory of the state where it is registered.
Federal registration is also superior to state registration. If a mark is registered with the USPTO before a similar state registration, then the federally registered mark has priority. The owner of a federal mark who registers first can stop any later state registered owners from using the same mark or a confusingly similar one. If the state registered mark was first, the owner with priority can continue to use the mark. This effectively stops the federally registered mark from being used within the state. However, the owner of the state mark cannot stop the federally registered mark from being used elsewhere. This scenario is fairly common in the business world and it brings up a few important points:
- It is essential to perform a thorough trademark search before submitting a federal trademark A search not only confirms that there are no other confusingly similar registrations that would cause the application to fail, but it also helps identify any senior users who have limited, but superior, rights. One famous case involves the claim to the Burger King mark. In this case, in 1959, in Mattoon, Illinois,a small ice cream and burger joint, owned by the Hoots,registered the restaurant’s nameBurger King as a state trademark. When the fast-food chain Burger King, which owns the identical federal registration, expanded into Illinois, the Hoots took action and filed suit. The Hoots believed that because their mark was senior to the Burger King chain’s mark in the state of Illinois, their mark gave them exclusive rights to the name Burger King all across the state. However, a federal court did not agree. It held that because a federal trademark registration has priority over state trademark registrations, the Burger King chain had rights to the name almost everywhere in the U.S., including Illinois, with the exception of the Mattoon area where the Hoots were actually doing business. Perhaps the result would have been different if the Hoots had their own chain of stores in other parts of Illinois.This illustrates the limitations of a state registration.
- While state registration does not offer much additional protection for your mark besides the common law trademark rights you already receive just by using your mark, it does create a record of the date you begin using your mark in commerce. This record can help you defend or assert your rights against identical or similar marks where you actually
- Businesses with a large geographic reach or those with multistate expansion goals should plan to submit a federal registration. Often, a new business will delay federal registration and not register its primary mark,or only register at the state level, in order to save time and money during the startup phase. This can be disastrous. Anyone else who is legitimately using the same mark and meets the basic registration requirements can register your mark at the federal level, thereby cutting off your business’ ability to expand or submit your own federal registration. There are procedures that allow a senior user to block or invalidate a junior user’s federal application, but that process is more costly and complicatedthan simply submitting an application before anyone else. Startups would be wise to budget for full and timely trademark registration when national or international protection is needed.
Cost and Renewal
The difference in cost and ease for registering a state versus federal trademark can be quite extreme. It probably will not come as a surprise that state registration is much cheaper and easier than federal registration. State registration usually consists of a $50-$75 filing fee for each “class” of goods or services registered, and is filed with the state office that handles other business filings, often the Secretary of State. State registrations are usually processed within days or weeks.
A federal registration, on the other hand, is filed with the USPTO, then examined by a government attorney, and costs anywhere from $225-$375 per “class” of goods or services. Federal registrations usually take substantially longer to process (months to years). A “class” is a pre-defined category in which the goods or services that you plan to use your mark on or with fits. For example, each trademark application can only list one mark, however, that single mark can be used on multiple items, such as t-shirts, product packaging, etc. Each item could be a different “class” to which additional filing fees apply. Additional legal fees are also common. This is because examining attorney may ask questions of the applicant or issue a preliminary denial that requires a careful response.
Furthermore, even if and after your mark has been registered, you must “maintain” it, show that it is being used, in order for it to remain valid. Maintaining your trademark involves filing an Affidavit of Use, (i) between the fifth and sixth year following registration, and (ii) within the year before the end of every ten-year period after the date of registration. You must also file a Renewal Application before the end of each ten-year period following the date of registration. These filings increase the overall cost associated with owning a federally registered trademark. Failure to maintain or renew a mark will also lead to it being cancelled, so it is important to respond to USPTO notices and schedule your own reminders for deadlines.
Principal v. Supplemental Register for Federal Registrations
Federal registrations are either listed on the “Principal Register” or the “Supplemental Register.” The Principal Register is what this post has been assuming since it offers “full protection.” The Supplemental Register, on the other hand, was created to allow registration of trademarks, such as descriptive marks, that do not meet all the requirements for registration on the Principal Register. Registration on the Supplemental Register entitles the owner to the following benefits:
- Use of the ® symbol;
- The right to file a trademark infringement claim in federal court;
- Allows USPTO examining attorneys to reference your mark as a reason to deny a later application that is confusingly similar to your mark (known as a blocking registration); and most importantly
- After five consecutive years of use, the ability to register a descriptive mark on the Principal Register.
Registration on the Principal Register gives the trademark owner benefits that other registrations do not. These benefits include:
- Legal presumption of ownership and nationwide constructive notice of use;
- Use the ® symbol;
- Registration with Customs and Boarder Patrol to prevent infringing products from being imported;
- Intent toUse registration option for pre-market clearance; and
- Can be used as a basis for obtaining foreign trademark registration.
While the use of a mark in the market is typically a requirement for registering a federal trademark, there is an exception for those who “intend to use” the mark. An Intent to Use (ITU) application allows a party with a bona fide intention to use a specific mark in commerce in relation to specific goods or services. However, before the mark will actually be registered, the applicant must use the mark in commerce and submit a Statement of Use within six months of the application date, with the possibility of additional extensions for a fee.
An ITU application is typical for a startup that intends to service a national market or a company that is preparing to launch a new national brand. The decision to file an ITU ultimately is going depend on the company’s intended scope of use for that mark. If the company does not intend toservice a very large territory it could avoid the additional fees associated with the application and not file an ITU application. However,if a company’s goal is to provide goods or services nationally or internationally and the initial design of the mark is final, then an ITU application can be filed to give priority to the mark before the initial launch or sale of the goods or services.ITU registrations add value by protecting brand investment through pre-market clearance, however, the most important benefit of filing an ITU application is that it gives the owner of that mark priority, as of the date of the ITU filing, against anyone who files for or uses a similar mark.
Now, having a basic understanding of the differences between state and federal registration, it is time for you to consider your business’ short and long term objectives. Does your business intend to only do operate within the state? Do you plan to provide goods and services nationally or internationally? Is your mark descriptive? These and many other consideration are questions your business should examine with an attorney to help your business and brand reach its potential.