Starting a new business can seem like an overwhelming and never-ending series of decisions and expenditures.  So any savvy business owner will, of course, look to prioritize the “needs” from the “wants.”  One of the most common questions we hear from clients – especially those at the start-up stage – is whether federal trademark registration is worth pursuing.

New business owners often spend a great deal of time finding the perfect name for their business, not to mention making a monetary investment in a good design for their brand.  Entrepreneurs often have a vague sense that a registered trademark can be important, but are not always familiar with the underlying reasons.

It is worth noting that certain trademark rights arise just from using a trademark “in commerce” – which essentially means you are legitimately doing business under your name and logo. These automatic rights are known as common law trademark rights, and they result from your use of a name and not from any statute, rule, or registration. Common law trademark rights have been developed under the judicial system (rather than by a legislative body) and are governed by state law.  The great thing about common law rights is that they are automatic and you gain them simply from using your mark in commerce. The drawback is that common law rights are limited to the market where you actually do business. So, someone in another state could use your business name and you may have no recourse.  This can get to be sticky when you are marketing your goods or services through the Internet.  To claim rights in a certain location, you may need to prove actual ongoing sales to customers in that area or otherwise show penetration of that market.

Because of this limitation of common law trademark rights, we often recommend that our clients federally register their trademarks.  One of the most important advantages to a federally registered mark is that it gives the owner an exclusive nationwide right to use that mark.  Other advantages of owning a federal trademark registration are:

– the right to use the federal registration symbol ®

– public notice of your claim of ownership of the mark, so others can learn about your rights before they use your name in a way that would violate your rights

– the ability to bring an action concerning the mark in federal court, and the ability to recover damages, lost profits, attorney fees and costs that result from the trademark infringement

– the use of the U.S. registration as a basis to obtain registration in foreign countries

– the ability to record the U.S. registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods

The bottom line is that trademark registration is an investment.  The initial cost (and hassle) is relatively minor, but the protections that come with registration can be invaluable down the road as your brand accumulates goodwill.  If you are an entrepreneur considering registering a trademark and you have questions or want further information, we’d love to hear from you. You can contact us here or tell us more about your mark through our EntreTrademark service.