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The Benefits of Federal Trademark Registration

A trademark (or service mark) is a source identifier for goods and/or services. Under trademark law, a trademark owner receives basic trademark rights in a mark simply by using that mark in commerce. However, the rights one receives based upon use without registering are limited to the geographic area in which the use has occurred. So, for example, if a trademark owner has only sold in a single state, their rights would be limited to that state and adjacent areas that would be considered within the zone of natural expansion.

This is why it is important to register a mark at the state or (more typically) federal level to obtain extra benefits and protection. When you obtain a state registration, you receive protection for the trademark throughout the entire state regardless of whether you have sold throughout the state. The federal system works the same way-regardless of whether you have sold in each state or territory, your registration is protection throughout the fifty states as well as United States territories such as Puerto Rico, American Samoa, Guam, the Northern Mariana Islands, and U.S. Virgin Islands.

When an owner has not registered a trademark, it becomes possible for multiple parties to obtain trademark rights in a same or similar mark without infringing upon one another. This is because common law rights allow for multiple people or businesses to establish rights in the same mark as long as neither is trading on the goodwill of the other. This most often occurs when two owners are geographically remote from one another.

If your trademark has not been registered with the United States Patent and Trademark Office ("USPTO"), other businesses are technically allowed to use the same or very similar marks when there is a geographic separation; i.e. different states. The reasoning? A consumer in one geographic area would think of the source of that mark as a business coming from their area and not from another location. However, once there is a federal registration of a mark, it is protected all over the US and its territories and junior users are precluded from using it on the same or similar goods or services.

Multiple owners may also use the same or similar marks if the goods and services are unrelated. A good benchmark of whether goods and services are related is whether they fall into the same International Class that the USPTO uses to classify goods and services. The USPTO recognizes 45 different International Classifications for goods and services under the Nice Agreement. As long as the classes are sufficiently unrelated, there is likely no infringement (and a junior mark would be able to obtain a registration) for an identical or similar mark to an already existing registration (or a previous use of an unregistered mark).

For example, if one business used the mark STONE for dairy products, another business wanted to use STONE for watches, and a third business wanted to use STONE for educational software, it is likely that each of the three businesses could use the mark STONE. How? Unrelated classes.

While the International Classes are a good benchmark, they are not determinative of a likelihood of confusion. Some International Classes or goods/services within those classes are often viewed by the USPTO as related. For example, clothing falls into International Class 025. Perfume, on the other hand, is in International Class 003, but due to the fact that many clothing lines also have perfumes or colognes under the same name, the USPTO views them as related. Similarly, beer is in class 032 with non-alcoholic beverages while wine and hard alcohols are in class 033-the USPTO treats these classes as related. Conversely, some classes are so broad that the USPTO allows the same mark to register for goods within the same class because the USPTO believes that the goods are unrelated enough that confusion is not likely.

Because of the interplay between common law rights, state registrations, and Federal registration, it is not unheard of for a company already in business for years to have to change their name or their product name due to an infringement issue. It's always better to avoid these by performing due diligence up front. Contact the experienced Orange County trademark lawyers at MYBE Law today to learn more.

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