Common law trademarks are trademarks that are used in trade but are not registered. As long as your mark meets the distinctiveness requirement and identifies your product then it will be entitled to common law trademark protections even if you don’t register it.
It’s important to understand your rights for two reasons.
- If you have common law trademark rights, you need to enforce those rights to keep your brand viable.
- You should understand that you have an alternative to federally registering when it makes sense for your business.
Does this apply to me?
Probably. Common law trademark rights is applicable to most brands. However, it’s especially important for brands that want to maintain their goodwill but don’t want or need to federally register their mark. If you’re a local brand but have no intention on expanding, then federal registration isn’t as important.
Why this mistake could hurt your business:
Even if you don’t federally register, you can still have common law trademark rights you can enforce against competitors to keep them from stealing goodwill where you’ve already used your mark. But you have to know your rights and enforce them or else it’s “use it or lose it.” If you never protected your brand, local companies could still steal or damage your goodwill.
If you never know your rights or enforce them, you allow your trademark to be diluted and weakened. How does this happen? Remember that what makes a trademark strong is its distinctiveness or ability to distinguish your products from everyone else’s. When the buyer sees your mark on a product, he will automatically know it’s yours. The more people use a mark that’s similar to yours, the less your mark is able to distinguish itself from the competition. In this case, when a buyer sees the mark he will think the product may be from you and it actually be someone else’s, or vice versa. If it gets associated with enough different sources, pretty soon it won’t be distinctive at all--which hurts your goodwill and branding.
You could avoid this problem by:
1. First, understanding what rights you get with a common law trademark. Those are:
Common Law trademark Rights and Protection
- Exclusive right to use - Exclusive use – this is the most valuable right you have over your trademark, this is what you want. This allows you to stop others from using an identical mark or one that will cause confusion between your product and theirs. This means you can even stop the registration of a mark conflicting with your unregistered one or contest it if already registered.
- Protection against unfair competition - Unregistered or common law trademarks are also protected against unfair competition. This makes it illegal to either take advantage of the goodwill that has attached to your trademark or to tarnish it. This includes making it seem like their products are coming from the same source as yours or are somewhat related to you and/or doing things that will make your product look bad. This is important because the impression created in the buyer’s mind of a product being from you or connected to you, when the buyer trusts your brand, may determine whether or not he will buy it.
- Scope/area of protection/right - Common law trademarks are protected in areas where you use them; where your products are known by that mark. This means if somebody else in the next town uses the exact same mark 10 years later, you may not be able to stop him. (Note: If you register, your mark will be protected nationwide, in certain cases you can even stop the importation of goods bearing marks that infringe on you trademark into the country.)
2. Second, you need to enforce your trademark against possible infringement.
Will had a business called Salesly that advertised and had customers nationwide. Will hadn’t set up his trademark yet, and a new company with the same name started advertising along the west coast. Will called up the company and told them to stop using his name, and they told him he had no rights to the name because one of their founders was also a law student and he said they hadn’t registered their trademark with the US Patent & Trademark Office.
Will hated attorneys and didn’t want to deal with the issue so never hired anyone to help him figure this issue out. Had Will understood his common law trademark rights, he would’ve known that even if he hadn’t registered, he still had first preference to the name Salesly in all the places he was already doing business in. And he would’ve known that the law student was a moron who didn’t know what he was talking about.