Federal Trademark Registration

Why Smart Businesses Should Consider Federal Trademark Registration

Lucas S. Michels, Attorney, Ironmark Law Group, PLLC

Entrepreneurs and small business owners often ask me why they should bother registering their trademarks with the U.S. Patent and Trademark Office (USPTO). After all, a business that uses its trademark for an extended period of time may qualify for legal rights in its mark without registration (known as a common law trademark). Furthermore, the federal trademark registration process can be time consuming, confusing and does not guarantee registration. Despite these legitimate concerns, there are so many benefits to federal trademark registration of which start-ups and small businesses should be aware. Here are some of the most important benefits.

Enhanced Legal Protection. Federal trademark registration grants its owner the maximum amount of protection available under the law. A federal trademark registration establishes a business’ presumption of ownership of a mark across the entire U.S. This means that a business that only operates in a few states can qualify for exclusive trademark protection across all states with a federal registration. In contrast, a common law trademark is only granted legal protection in the geographical area where it is substantially used by its owner.

The presumption of ownership across all of the U.S. also means that a federal trademark registration makes enforcement activities relatively less expensive and often entitles an owner to greater recovery in a lawsuit. The cost for seeking judicial enforcement to protect a federal trademark is often less than that for a common law trademark because an owner of a federal mark will not have to show substantial use of the mark for an extended period of time, and a federal trademark registration entitles its owner to greater damages should infringement be found.

Online Enforcement. As I have previously discussed in Efinitytech News, a business’ ability to enforce legal protections in its trademark online on major advertising sites, such as Google, Bing and Yahoo!, social media sites such as Facebook and Twitter, and major website hosts, is generally determined on whether such a business has a federal trademark registration. Such sites and site hosts will generally not respond to a trademark infringement complaint unless the complaining party has a federal trademark registration.

Cross-Border Protection. Although start-ups and small businesses may not be initially concerned with international expansion, such businesses often and unexpectedly expand into foreign markets. A federal trademark registration only grants its owner legal protections in the U.S. However, it provides an owner enhanced options to expand legal protections for their mark abroad. For instance, it allows an owner to more cheaply and efficiently register their mark in foreign countries that are signatories to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (aka Madrid Protocol). This is because the Madrid Protocol generally has reduced fees for registering in a mark in foreign countries and it can be utilized concurrently when registering a trademark at the USPTO.

Additionally, a federal trademark registration is a vital tool to help prevent the importation of infringing goods into the U.S. U.S. Customs and Border Protection (CBP) allows a trademark owner to register their mark with the CBP to enable them to inspect all U.S. inbound shipments for counterfeit goods utilizing the mark. To do so, owners must have a valid federally registered trademark. Although not all businesses produce or import material goods, CBP’s trademark registration system is a relatively cheap and effective way to protect a business’ branding across borders.

Valuable Business Investment. Lastly, and perhaps most importantly, a federal trademark registration is an important investment a business can make to increase and enhance its value. As most start-ups and small businesses are interested in acquiring outside investors and (eventually) potential buyers, such investors and buyers are increasingly requiring that businesses possess federal trademark protection for their branding as it is an indicator of established brand value and sound business protection.

These are just some of the main benefits of federal trademark registration. To determine whether your business should seek such protection, you should seek a qualified trademark attorney to assist you.