What’s The Difference Between Common Law & Registered Trademarks?

Registered Trademark vs. Common Law Trademark

Registering a trademark is a necessity for startups and existing businesses who want a national reach and whose business model depends on branding, slogans and widespread name recognition. Such businesses should go through the extra time and expense to protect their intellectual property with a registered trademark.

by
May 29, 2016

Trademarks prevent others from using your logo, slogan, or other mark.

But trademark law is confusing. You may have even heard that there are multiple types of trademarks: registered trademarks and common law ones. But what’s the difference? And what kind of trademark should your business be aiming for?

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As a starting point, “Registered” trademarks are marks that are registered with the U.S. Patent & Trademark Office (USPTO). Registration requires surviving a complicated application process.

Common law trademarks, by contrast, require no registration. They are totally free, and can be obtained just by using a mark in commerce.

They are called “common law” marks because their rights derive from the “common law,” which is an old-fashioned legal way of saying that they come from a history of judicial decisions, rather than specific statutes.

Both types of trademarks give their owner the right to use a mark in commerce, as well as the right to prevent other people from stealing it.

Which Kind of Mark Provides More Protection?

Common law trademarks are generally much easier to obtain, but afford their owners much less protection.

In fact, common law trademarks only give the mark owner legal protection over two geographic areas: (1) areas where the mark is actually used; and (2) areas where the owner’s business would naturally expand to. In addition, these protections only apply if the business owner uses the mark in those areas before anyone else.

Imagine that you have a small business in Los Angeles. Your company logo or slogan may acquire common law trademark rights in and around Los Angeles (i.e., where you do business and sell your products). It would probably not develop common law trademark rights outside of Southern California, however. Thus, if a different business in Las Vegas or San Francisco started using a similar logo or slogan, there probably wouldn’t be much that you could do to stop them.

Federal registration, by contrast, puts the whole nation on notice that you are using a particular mark.

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Thus, once your mark is registered on the so-called Federal Register, no one can use that mark. There is one important exception however: preexisting businesses can continue using that mark in the areas where they were already using it at the time you filed your registration application.

In other words, a registered trademark gives you more-or-less national protection; common law trademarks, on the other hand, only protect you in and around the areas you already do business.

Other Advantages to Federal Trademark Registration

Registered trademarks have several other advantages over common law trademarks as well. 

First, federal registration makes it easier to sue in federal court, which may be faster than state court and give you certain procedural advantages.

Second, after a mark has been registered and used for five years, it becomes “incontestable.” This means that the registrant has conclusive evidence of his or her right to use the mark; it also limits the kinds of defenses that an alleged infringer can raise. Together, someone with a registered trademark generally has an easier time both prosecuting and defending trademark infringement actions.

ALSO SEE: Amazon Faces Search Results Trademark Infringement Lawsuit

Third, registering your mark may increase the number of remedies available to you if you have to sue for infringement. Federal registration allows you to go after the defendant’s profits, seek statutory damages, and ask for punitive damages, among other things. These remedies often aren’t available when you sue on violations of your common law rights.

Finally, you can use the famous “®” symbol to designate your product as bearing a federally registered trademark, giving your mark more legitimacy in the eyes of competitors and hopefully dissuading would-be infringers. Common law marks, by contrast, can only use “™.”

Which One Should You Go For

Based on the above, it would seem like registering your trademark is a no brainer.

But there are some downsides to federal registration with the USPTO.

First, there are fees for applying and registering. However, the benefits typically outweigh the fees.

Second, applying can be tricky. Making sure you are applying correctly and getting the protection you deserve is hard to do yourself.  Most serious businesses hire a lawyer to help them, and that too, isn’t free.

Together, some very small businesses that are limited to a small geographic region and whose business does not depend on widespread brand recognition, might find that registering is probably more effort than it’s worth. However, a trademark can be very important if the business starts to grow.

For larger businesses who want a national reach, however, getting a registered trademark is almost a necessity. This is also probably true for companies—even startups—whose business model depends on branding, slogans, and widespread name recognition. Those companies should go through the extra time and expense to protect their intellectual property with a registered trademark.

If you are thinking about registering a trademark, consider consulting an attorney or intellectual property expert. 

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