by Intellectual Property Attorney Bill Honaker, the IP Guy
Your trademark may be your most valuable asset and should be protected. The best way to protect your mark is to register it. You can register a mark with the United States Trademark Office, state trademark offices, and in other countries. The best approach depends upon your business and its future expansion.
Trademarks in the United States
In the United States, merely using your trademark gives small business owners certain intellectual property protection rights. They’re called common law rights. These rights only extend to the geographic area in which you use your trademark. But, if you register your trademark with the United States Patent and Trademark Office, you increase your rights to the entire United States.
Your trademark can be a business name, like “Nike”; original works of art, like their “shwish”; or a phrase, “Just Do It!”
The TM and SM designations are placed with trademarks and service marks to show that the owner has started the registration process. The “R-in-a-circle” symbol designates a trademark or service mark that has been registered. Just placing a symbol on your product or service won’t guarantee protection. To have full legal protection for your trademark, you must complete the registration process.
The Burger King Case
This was the result in the famous Burger King case which set a precedent in business law. In 1953, the national franchise Burger King (The National Burger King) opened the first “Burger King” restaurant in Jacksonville, Florida. By 1957, they had thirty-eight restaurants operating in Alabama, Kentucky and Virginia.
In 1957, Gene and Betty Hoots opened a Burger King restaurant in Mattoon, Illinois. In July, 1959, they registered their trademark Burger King under Illinois state law.
Matoon, IL Burger King
In July, 1961, The National Burger King opened their first Illinois “Burger King” restaurant. That same year, The National Burger King obtained Federal Registration for “Burger King.”
The Mattoon Burger King then sued National Burger King for infringement to prevent them from operating in Illinois. The court held that the national chain’s federal trademark registration of “Burger King” gave them the right to use the mark in Illinois, except in the Mattoon market area.
This was the only area where the Mattoon Burger King owners had actually used the mark prior to National Burger King’s federal registration. The Hoots’ rights were only valid within their market area, which the court determined to be a 20-mile radius.
As the Court stated, “The owners of the federally registered trade mark, “Burger King,” have the incontestable right to use the mark in commerce, except to the extent that such use infringes the rights acquired by the continuous use of the same mark by others, prior to the federal registration.”
The Hoots had established common law trademark rights which the court determined to be limited to their area of use, a 25 mile radius around the town of Mattoon. The National Burger King’s Federal Registration was good throughout the United States, except for that one area where the Hoots had used it first. Clearly Federal Registration is more valuable. Do a trademark search when you first set up your small business, and protect your intellectual property rights.
Federal Trademark Protection
To be eligible to register your trademark with the United States Trademark Office, you have to use your mark in interstate commerce. Basically, you have to use your trademark in more than one state.
Federal registration requires the filing of an application and the appropriate filing fee. The application requires you to identify the mark, when you first used it in interstate commerce, the goods or services that you associate the mark with, and the the trademark class or classes. You have to be very careful with each of these. Any mistakes can jeopardize your case.
If you haven’t used the mark, but you intend to use it, you can file an intent to use application.
State Trademark Registration
If you’re only using your trademark in one state. You should consider state registration. Every state has their own IP law, but most are similar to the Federal Registration requirements.
Trademarks in Other Countries
It is also important to consider registration of your trademark in other countries if you intend to use the mark in those countries. Most other countries require registration to have trademark rights. They don’t have common law rights like those in the United States.
If you intend to use your trademark in another country or countries you should file for registration in those countries as soon as possible. Because these countries only recognize the registration, others may register your trademark to block your ability to use in your trademark.
I have been involved in cases where clients trademarks were registered by others, requiring us to buy those rights. Basically, they were extorting the client. Registration in all of these jurisdictions gives you a competitive advantage.
One example was a distributor in Europe who registered a client’s trademarks. When the client sold his business, the sale was held up until he bought them back from the trademark owners, for $250,000.00.
About the Author:
Bill Honaker, “The IP Guy” is a former USPTO Examiner, a partner with Dickinson-Wright, and author of the forthcoming book, Invisible Assets – How to Maximize the Hidden Value in Your Business. To download a sample chapter, click here.