Five Steps for Protecting Your Trademarks

Take these steps to get full value from your trademarks

It surprises me that many companies don’t register their trademarks. It’s one of, if not the most valuable asset you have. Like any valuable asset, it should be handled with care, well maintained and thoroughly protected. Today we will talk about how to protect this asset.

Trademark lockedStep 1, if you are eligible, register your trademark with the United States Patent and Trademark Office (USPTO) because it provides tremendous benefits which I will discuss below. To be eligible, you must use your trademark in interstate commerce. Proving use can be tricky. To learn more about use, see my article here.

Step 2, use a professional. Don’t try this at home. The process is tricky. You don’t know what you don’t know. Using a professional is relatively inexpensive. Typically, a trademark attorney will charge around $1,000.00 to file the application. Often that’s the total amount you will have to pay, unless the USPTO Trademark Examiner objects. Even then, the total cost can be less than $3,000.00.

I recently met a business owner who proudly told me that he had filed his own registration. He said he was surprised at how difficult it was, and that he had spent hours learning how to file the application. He then spent even more hours trying to learn how to overcome objections raised by the Examiner. He gave up on his broader mark because he failed to show use; a rookie mistake. He then refiled on a narrower, less valuable mark and got registration. He suggested that he had more than 40 hours invested in the process. Apparently his time is not worth much and who knows if it was done correctly. He will only find out if it’s challenged, and then it will be too late.

Common Law Trademark Protection is Not Enough

In the United States, you have trademark rights when you use your mark. It’s automatic, but not sufficient for such a valuable asset.

Common law trademark protection only protects you in the geographic area in which you’re using your mark. Federal registration gives you nationwide protection.

Matoon, IL Burger King
Matoon, IL Burger King

There’s a famous case involving the national fast-food chain, Burger King. They waited years before obtaining their Federal Registration. In the intervening years, a restaurant in Illinois started using the name, Burger King.  It was owned by Gene and Betty Hoots. The Hoots bought the successful Frigid Queen ice cream shop from Gene’s uncle, Bill Paullin, in 1952.  In 1954, Gene expanded the business, adding hamburgers, French fries, and other items to the menu.  The Hoots had common law rights in their geographic area. When the national chain opened a restaurant in Illinois, the Hoots sued. The Court held that the Hoots had common law rights, but only within a 25-mile radius of their restaurant. Burger King was able to open restaurants throughout Illinois except within that 25-mile area.

If the national chain had registered their trademark before the Hoots opened their restaurant, they would have been able to force the Hoots to change their name. They would have had national protection and could have stopped all later users.

Step 3, register in countries where you’re doing business or intend to do business. Registering your trademark in other countries is critical because most require it for trademark rights. They don’t have common law rights. I represented a company that was being purchased. They didn’t register their trademarks in the countries where they were doing business. But their distributor did. The buyer refused to close because of this. At the 11th hour the client had to buy his trademark rights back from the distributor for $250,000.00 to close the deal.

US Federal trademark registration offers several crucial benefits

  1. Nationwide Protection: Unlike state trademarks, which are limited to a specific state, federal registration provides rights and protection across the entire United States. This is essential for businesses operating or planning to expand nationwide.
  2. Legal Presumption of Ownership: Federal registration establishes a legal presumption of the registrant’s ownership of the trademark and their exclusive right to use the mark in connection with the goods or services listed in the registration. This can be a decisive factor in trademark disputes.
  3. Deterrence to Others: A federally registered trademark is listed in the U.S. Patent and Trademark Office (USPTO) database. This public listing can deter others from using a similar mark, as they can easily find your trademark through a search, thus reducing the risk of infringement.
  4. Basis for International Registration: Holding a federal trademark can facilitate the process of registering the trademark in other countries. This is important for businesses with international aspirations or online operations accessible globally.
  5. Use of the ® Symbol: Once federally registered, you can use the ® symbol with your trademark, indicating its registered status. This serves as a public notice of your trademark rights, and can have a deterrent effect on potential infringers.
  6. Access to Federal Courts: Federal registration allows you to bring an infringement lawsuit in federal court. Federal courts may offer certain advantages in handling complex cases, and in some instances, can provide broader remedies.
  7. Increased Damages for Infringement: In cases of infringement, federal registration can allow for the recovery of higher damages, including the possibility of statutory damages, attorney fees, and treble damages for willful infringement.
  8. Counterfeit Goods: Federal registration allows for recording the trademark with U.S. Customs and Border Protection. This can help in preventing the importation of counterfeit goods bearing your trademark.
  9. Domain Name Disputes: It can provide advantages in domain name disputes, as a federally registered trademark can be a critical factor in proceedings under the Uniform Domain-Name Dispute-Resolution Policy (UDRP).
  10. Business Growth and Valuation: A federally registered trademark can be a valuable asset, enhancing the overall value of your business. It can be licensed, sold, or used as a security interest, thus playing a pivotal role in business growth and investment opportunities.

In summary, federal trademark registration is a powerful tool for protecting a brand’s identity and legal rights, deterring infringement, and enhancing business opportunities, both nationally and internationally.

Your Trademark Can Become Incontestable

Incontestability is a significant legal status offering robust protection to the trademark owner. To achieve incontestability, a trademark must have been in continuous use for five years after its registration, and the trademark owner must file a “Declaration of Incontestability” with the USPTO. The status of incontestability is a powerful tool in trademark law, offering substantial benefits and protection to trademark owners.

  1. Strengthens Legal Standing: When a trademark becomes incontestable, it provides conclusive evidence of the validity of the registered mark, the registration itself, the owner’s exclusive right to use the mark in commerce, and the owner’s continuous use of the mark since registration. This makes it much harder for others to challenge the trademark.
  2. Limited Grounds for Challenge: An incontestable trademark can only be challenged on limited grounds, such as:
    • The mark becoming generic.
    • The mark being obtained fraudulently.
    • The mark being abandoned.
    • The mark being used to misrepresent the source of the goods or services.
    • The mark infringing on someone else’s rights acquired prior to the incontestability status.
  3. Reduces the Burden of Proof in Litigation: The owner of an incontestable trademark doesn’t need to prove the validity of their mark or their exclusive right to use it during litigation. The burden of proof shifts significantly to the party challenging the mark, making legal defense easier and more straightforward for the trademark owner.
  4. Defends Against Certain Defenses: An incontestable status can nullify certain defenses in a trademark infringement lawsuit. For instance, an alleged infringer cannot claim that the registered mark is merely descriptive or lacks distinctiveness.
  5. Enhanced Legal Remedies: Owning an incontestable trademark can potentially lead to stronger legal remedies in case of infringement, including higher damages and attorney’s fees.
  6. Deters Infringement and Unauthorized Use: The status of incontestability can act as a strong deterrent against potential infringers, as it signals the strong legal position and protection of the mark.
  7. Long-term Security: Incontestability offers a form of long-term security for the trademark, as it solidifies the legal protection of the mark, provided the trademark continues to be used in commerce and is properly maintained.
  8. Increased Business Confidence and Value: An incontestable trademark can increase confidence among businesses, investors, and consumers regarding the stability and protection of a brand, potentially enhancing the brand’s value and market position.

Step 4, monitor your trademarks for deadlines at the USPTO for incontestability and renewals. There are specific dates when these must happen, and the USPTO is not responsible for reminding you. Interestingly, the do-it-yourselfer I talked to doesn’t realize that his trademark went abandoned because he failed to renew it. If you hire an expert, Step 2, they will monitor your mark for these dates so they’re not missed. You should also monitor for use of the same or similar marks by others because such use will weaken your mark.

Step 5, really Step 1 if you don’t have a mark now, is to pick a strong mark. I will discuss what is a strong mark and how to pick it in next week’s article.

The Takeaway

As I discussed in the first article in this series, intangible assets are more valuable to your business than tangible assets. Intellectual property rights make up most of your intangible assets. Of these, trademarks are typically the most valuable. Every business has trademarks, and they need to be fully protected. Don’t wait to protect yours. I am presently representing several companies that waited, and now they must deal with refusals by the USPTO because someone else beat them to it. Act now to avoid problems.

If you want to talk about your trademarks and what you should be doing, give me a. call at 248-433-7381 or schedule an appointment to talk.

Bill Honaker
By Bill Honaker, The IP Guy

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.

To get answers to your questions click here. To schedule a time to talk, you can access my calendar by clicking here, email, or call me at 248-433-7381.

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