In deciding whether to file a federal trademark application, clients often ask about the benefits of a federal trademark registration. This article will briefly review those benefits. For any company that is doing business across state lines, the advantages of a federal registration almost always outweigh the costs.
1. Federal jurisdiction. A federal trademark registration confers on the owner the right to sue for trademark infringement and/or dilution in federal court. Without a federal trademark registration, the owner must sue in state court unless diversity jurisdiction is present (i.e., where the parties are from different states and the amount in controversy is over a certain dollar amount). Related state law claims (such as unfair competition or misappropriation of trade secrets) can also be asserted in connection with the claim for infringement of the federally registered mark.
2. Legal presumption. A federal trademark registration serves as prima facie evidence of the validity of the registered mark, of the registrant’s ownership of the mark, and of the registrant’s exclusive right to use the registered trademark. Thus, if someone wants to challenge your trademark rights, they will have to overcome these presumptions in order to prevail. Furthermore, after five years of continuous use in interstate commerce, the registrant’s ownership of the mark becomes incontestable.
3. Descriptive Marks. Under Section 2(f) of the Trademark Act, 15 U.S.C.
§ 1052(f), marks that would otherwise be refused registration due to their descriptive nature (such as YELLOWSTONE ART MUSEUM or ROCKY MOUNTAIN TECHNOLOGY GROUP) can be registered if the applicant has used the mark continuously in interstate commerce for a period of five years, and if the applicant submits a declaration to that effect. In that situation, the mark is deemed by the trademark office to have acquired distinctiveness by virtue of the longevity of use.
4. US Customs. Marks that have been registered with the federal trademark office can also be registered with US Customs. US Customs will prevent goods bearing the registered mark from entering the country. This remedy can serve as a powerful tool against counterfeiters. US Customs will not protect unregistered marks, however.
5. Foreign Trademark Protection. Federal trademark applications and/or registrations can serve as the basis for international trademark applications filed under the Madrid Protocol. (See http://www.teaselaw.com/newsletter/
2003_november.html for additional information on the Madrid Protocol.) If the international trademark application is filed within six months of the filing date of the US application, then priority can be claimed back to the US filing – which means the applicant will have the same priority date in all countries covered by the international application.
6. Constructive Notice. A federal registration serves as constructive notice of the registrant’s ownership of the mark in all fifty states. This eliminates the ability of non-registered users to assert the common law defense of good faith and lack of knowledge. With a federal registration, the owner of the registration has trademark rights even in those states in which the registrant is not currently doing business; however, a senior user (i.e., someone whose date of first use in a particular state pre-dates the applicant’s date of first use in that state) will have priority of use with respect to that state and any other states in which the senior user was using the mark or had demonstrable plans to use the mark as of the date of the federal registration. In other words, the registration date cuts off the senior user’s ability to expand into other states.
7. Remedies. A federal trademark registration affords significant advantages in terms of remedies. The owner of a federal registration may elect to receive statutory damages of up to $100,000 per mark in lieu of having to prove actual damages. For willful infringement, the court may award damages of up to $1,000,000 per mark. If the plaintiff elects not to pursue statutory damages, then treble damages (i.e., three times actual damages) may be awarded for willful infringement. In exceptional cases, the court may award attorney’s fees (this is true for both registered and unregistered marks).
It should be noted that the registered trademark symbol (®) may only be used with a mark that has been federally registered (it may not be used while the application is still pending), and it may only be used in connection with the goods and/or services covered by the registration. The symbols “TM” (for trademark) or “SM” (for service mark) may be used with unregistered marks.
