Many companies utilize the Internet as a means for advertising or selling its products. However, it is a common misconception that your Internet presence provides your nationwide common law trademark rights. Trademark rights are acquired through actual use of a mark being used on products or in connection with services within a geographic area. The geographic area in which a common law trademark is enforceable depends on its zone of actual goodwill. This zone of goodwill is considered the area in which consumers identify your mark with your company. This zone of actual good will is made up of the zone of market penetration and zone of reputation. The zone of market penetration is the area in which consumers have actually purchased your products or utilized your services. The zone of reputation is the area where consumers have not purchased your product/services but are aware of your mark and its use in connection with your goods/services.
Registering your trademarks with the U.S. Patent & Trademark Office should be one of the first steps for all new companies (that’s of course, after conducting a comprehensive trademark search). However, allocating the necessary funds to adequately protect its trademarks may be a tricky endeavor for a new startup company. Frequently, companies with limited budgets only have enough money file a single trademark and thus, must decide whether it is best for them to file a trademark application for their business name or logo. Before making a decision, it is extremely important to consult a trademark attorney since every mark is different and requires its own legal analysis. However, there are a few general factors that should be considered in the decision-making process.
When registering a trademark, applicants are frequently instructed by the Trademark Examiner to disclaim an element of their mark in order for it to be registered on the Principal Register. In fact, the U.S. Patent & Trademark Office has reported that approximately 29% of first Office actions contain a disclaimer requirement. The trademark examiner usually requests that the applicant amend the application to include the following disclaimer:
“No claim is made to the exclusive right to use [disclaimed component] apart from the mark as shown.”
Conducting a trademark search before using a trademark in commerce should be a no-brainer for all companies looking to develop a successful and long-lasting brand. Unfortunately, it is not uncommon for a startup to create and fall in love with a company/brand name without conducting a proper trademark search only to then find out the mark is already being used by a prior user with superior rights.
Unlike many other countries, the United States has what is called a first-to-use trademark system. That means that the first entity to use the mark within a territory acquires a right of priority to use that mark over all subsequent users in that location. Under common law, the first user (a.k.a. “senior user”) has superior rights to use a mark within a territory, regardless whether or not it has been federally registered with the U.S. Patent & Trademark Office (“USPTO”). In fact, if a subsequent junior user registers an identical or similar mark with the USPTO, the prior senior user still has exclusive priority to use the mark in its territory as well as its zone of natural expansion. Nowadays, when it is very common to sell products and services over the Internet, that territory could be large and thus extensively limit the use of the junior user’s mark, even if it has been federally registered.
Trademarking your name is a common practice that has recently gained traction within the college football scene. Many coaches such as Ohio State’s Urban Meyers, Kansas State’s Bill Synder, and University of Washington’s Steve Sarkisian have all filed trademark applications with the USPTO for their names and phrases that include their names.
This practice is nothing out of the ordinary, but has led to a controversy where college football coaches are able to profit off of their names while players cannot receive compensation when their names are used on products like jerseys, video games, and photographs.
For more information about the controversy occurring on campuses nationwide, check out this article written by Steve Berkowitz of USA TODAY Sports.
If you are interested in filing a trademark for your name, please contact one of our trademark attorneys today. We would be happy to provide you a free 30-minute consultation to discuss your options and the trademark process.