Timothy Engling

Tuesday, 21 December 2004 10:49

Protective assets

Why is federal trademark registration important? Both registered and unregistered trademarks identify and distinguish the source of the goods or services of one party from those of others. But even though the first user of a trademark has common law and state-law rights, without federal registration, those rights are limited.

Federal trademark registration has numerous additional benefits, both offensively and defensively. It:

* Provides constructive notice nationwide of the trademark owner's claim

* Blocks federal registration of confusingly similar trademarks

* Provides evidence of ownership and registrant's exclusive right to use the trademark with the goods or services specified in the registration

* Allows for incontestible status after filing the appropriate declaration

* Permits jurisdiction of federal courts

* Allows filing with U.S. Customs to prevent importation of infringing foreign goods

* Serves as a basis for obtaining protection in foreign countries

* Grants the right to use the circled "R" symbol, (®), with the registered trademark

Constructive notice begins on the date a trademark is registered. A federal trademark registration has the legal effect of notifying the public that the trademark is in use by the registrant. Competitors are deemed to be aware of a registered trademark regardless of whether they uncover it with proper diligence.

Claims of innocence by others in adopting a trademark, good faith or lack of knowledge are not defenses. Competitors have an affirmative duty when adopting or using a new trademark to search U.S. Patent and Trademark Office records to avoid selecting confusingly similar trademarks.

A trademark adopted after registration by another is at the new adopter's peril, with rights inferior to the registrant's rights.

Competitors who are properly diligent in adopting a new trademark should avoid a confusingly similar trademark that is already registered or even pending. In other cases, the USPTO should reject confusingly similar trademarks from later registration. Also, a party challenging a trademark would have constructive notice of a trademark registration; therefore, a legal action against a registered trademark may be precluded.

Legal presumptions and evidentiary benefits favor the owner of a trademark registration. A federal trademark registration provides evidence of validity of the registration, the registered trademark, the registrant's ownership of the trademark and the registrant's exclusive right to use the trademark on the goods or services covered by the registration.

Federal law also allows for incontestibility, which is the highest status of trademark protection. With the appropriate declaration, an owner's right to use a registered trademark can become incontestible, with limited exceptions.

After five years of registration, no one can assert prior use against a trademark registered on the Principal Register. Other grounds for challenging a registration are also foreclosed, such as asserting that a trademark is merely descriptive.

A federal registration helps the owner enforce its trademark in more than just federal courts. Putting a trademark on record with Customs can help protect goodwill and reduce losses due to infringement and counterfeiting. For example, Customs can seize counterfeit goods, impose fines after infringement determinations and detain imported goods bearing confusingly similar trademarks.

A federal trademark application can serve as a basis for obtaining registrations in foreign countries in two ways. First, a Madrid Protocol application can be filed with a U.S. national application as the basis for an international trademark registration. It only requires a single filing in English with one registration authority to get applications on file in member countries.

Second, under the Paris Convention, corresponding applications filed in many foreign countries can receive the benefit of a U.S. filing date if filed within six months of that date.

Only federal registration permits use of the circled "R" symbol, ®, which adds a professional appearance to a trademark and shows that the owner deems the trademark important enough to protect. Without federal registration, a trademark may be used with a "tm," which is only an assertion that the user believes it has trademark rights. The federal registration symbol should only be used with the trademark on or in connection with the goods and/or services listed in the federal trademark registration.

The cost for all these benefits is reasonable. The author typically prepares and files trademark applications in one class for $750 to $800, which includes the $335 governmental filing fee.

Timothy J. Engling is a partner in the Chicago office of Barnes & Thornburg LLP and a member of the Intellectual Property and Litigation departments. He concentrates his practice in patent, trademark and copyright protection, as well as intellectual property-related litigation, litigation avoidance, opinions and licensing. Reach him at (312) 214-4806.