Common Law Trademarks are everywhere!

Using an 'unregistered' mark in commerce by a business for some years in a specific geographic region can develop into a "common-law" trademark.  This term refers to trademarks that have neither been registered federally (USPTO) nor in any state's trademark registry.  Such a designation denotes that the specific mark has been recognized by the public as being a source identifier or brand name affiliated with the business in question, so as to create some enforceable trademark rights.  A common law trademark distinguishes and identifies the source of a good, just as registered trademarks do. The symbol TM signifies that you claim common law or state law trademark rights.  This is meant to put others on notice.

Trademarks assert an owner's right to use a specific word, phrase, logo/symbol, or design in the market to denote and identify their business or a product/service. Importantly, trademarks also indicate the uniform quality expected of the goods/services it identifies. This is also known as the “goodwill” of the trademark.  In general, trademarks are secured by a company to advertise and distinguish their products from those offered by other companies.  Essentially, it is a form of identity and reputation in the marketplace.  

Federal trademarks are registered at the USPTO, and are enforceable across the entire United States.  Federal trademarks have priority over State and Common-Law trademarks.  To be eligible for federal registration, a trademark needs to be unique in nature, and used in interstate commerce.

State trademarks are registered with the authorities of a particular state, and are only enforceable within that state.  State trademarks are trumped by federal trademarks.  State trademarks are generally cheaper and easier to attain than federal trademarks, as the process is not as rigorous nor popular.

Where a company has been using a trademark in a specific geographic region in a source-identifying manner that is nonetheless neither registered at the state nor federal level, they still have rights under the common law as well as the Lantham Act.  According to the Lanham Act, which governs trademark law in the U.S., from the moment a mark is used by a business in commerce, it is automatically protected as a common-law mark.  Since common-law trademarks are limited by geography, the protections afforded are likewise limited.  If you were the first user, common law rights may preserve your right to use your trademark in your geographic area.  Your common-law rights to a particular name, logo, or slogan in New York will not necessarily allow you to prevent someone in Chicago from using a similar trademark for their business. 

Common-law trademarks, though limited in their scope of protection, are still important to consider when you are planning to file a federal trademark.  To ensure a new trademark may not run into issues with an existing common law mark, the clearance process for new trademarks should include deep or comprehensive searches, industry-specific directory searches, business filing searches, social media searches, and even domain searches. To ensure that each search is thorough and accurate, many applicants opt to hire an experienced trademark attorney to conduct the clearance search.  Attorneys will typically use national vendors to provide search data, which is then analyzed by the attorney to develop a clearance opinion on the risks posed by registered and unregistered marks.

For an example of risks posed by a state or common-law trademark to a federal registration, consider the lessons learned from the dispute over the "Burger King" trademark in Illinois.  While today "Burger King" may be a well-known brand and household name synonymous with the national chain of fast food restaurants operating all over the country, that was not the case in the 1950's.  A small mom-and-pop style restaurant in Mattoon, Illinois, filed a state trademark for "Burger King" as the name of their restaurant, around the same time that a fast-food chain restaurant of the same name was getting started in Florida.  That Florida fast food chain eventually grew into a multi-billion dollar enterprise with franchise restaurants across the US, and with federal trademarks.  Litigation ensued after the bigger "Burger King" from Florida started to open restaurants in Illinois.  While the smaller Mattoon "Burger King" was not able to prevent the larger Florida "Burger King" from opening restaurants elsewhere in Illinois where it had no presence, it was able to prevent the fast-food chain from opening any of its restaurants within Mattoon, Illinois.  

That result came about after protracted litigation, which cost both sides in the dispute significant sums of money.   It is thus always a good idea to have an attorney-led clearance search/opinion conducted before you seek a federal trademark in order to identify any potential common-law claimants before they come out of the woodwork.  

We regularly help clients with trademark search and clearance analysis.  

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