A Trademark is a name, symbol, or device that identifies the source of a product or service. Registering your Trademark provides some distinct benefits in protecting your brand. Trademarks protect a brand in all 50 states when filed in the United States. So why would a small business owner want to incur the time and expense to file and obtain a Trademark with the United States Patent & Trademark Office (USPTO)? Most small businesses start by filing with the Secretary of State to form a LLC, Corporation, or other entity type. In this article, I will lay out the top four reasons to Trademark a business name or a logo.
- Growth. The first and most common reason a business should consider a Trademark is when the business is anticipating that it may grow beyond the state where it first started. Filing a Trademark ensures that you have rights to the name or logo in states and geographies across the country. For example, let’s say you file a LLC in North Dakota but plan to grow into Minnesota and South Dakota. Someone else in Minnesota or South Dakota could start a business under the same name after filing for your LLC in North Dakota. There is nothing legally (unless you have Trademark rights) stopping someone in another state from starting a business with the same name. If someone did this, it would prohibit you from using your brand in that state. The person in the other state may start the business with the same name completely in good faith. If you want to stop people in other states from using the name, you should file a federal trademark.
- Competitive Industry. Suppose your business is in a competitive industry in which there are many similar brands. In that case, it is not uncommon where one brand is so similar to another such that there may be allegations of infringement. An example of this may be when one company’s logo is similar to another company’s logo within the industry. For example, let’s say you own an optometry practice and do business only in Fargo. Further, let’s say that your logo incorporates the shape of a set of eyeglasses. A competitor in Fargo may also decide to use a logo with a similar-looking set of eyeglasses. Having filed a Trademark makes it much easier to stop your competitor from using that logo, which may be confusingly similar. If you don’t have a registered Trademark, you may still have common law Trademark rights, but it is typically harder to enforce such rights.
- Risk of Infringement Disputes. Even if you don’t register a Trademark, you still may have common law Trademark rights. This doesn’t mean someone else in another state is aware of your business and won’t file a federal Trademark for the same name. Even though such a person could not stop you from using your brand in your geography, it could still distract you from focusing on your business. Filing a Trademark can sometimes be a method to preempt this scenario. For example, let’s say you do business in North Dakota and Minnesota but have never filed for a Trademark with the USPTO. Now let’s say someone in Florida decides to start a business in the same name and is unaware of your business. Suppose the person in Florida decides to file for a federal Trademark and the application is granted to the person. In that case, that person could potentially have a Trademark on your business name, despite you being the first to use it. Now you still fully have the right to use the name in the geography in which you do business, but expanding may require hiring an attorney to determine how you can move forward without causing infringement accusations. Further, the Florida person might also later discover your business and make allegations of infringement. In either case, you will likely have to spend some money on an attorney to sort out the potential allegations of infringement. Hiring an attorney after the fact will likely be more costly than what it would take to file for a Trademark.
- Website URL. One rarely known Trademark benefit is the ability to keep third parties from holding onto domain names that reflect your brand and “holding them hostage” for excessive prices. The Internet Corporation for Assigned Names and Numbers (ICANN) has a Uniform Domain-Name Dispute-Resolution Policy (UDRP). Suppose someone else is using a URL that is confusingly similar to your Trademark. In that case, the World Intellectual Property Organization (WIPO) has a process which you can use to enforce the terms of UDRP and reclaim the disputed URL for a reasonable cost. For most URLs this process can apply.
Fargo Patent & Business Law is an intellectual property and business law firm. If you have questions about Trademarks, other intellectual property, or other business issues, we are always happy to talk to you.
The information provided in this article does not and is not intended to constitute legal advice. All information, content, and material is for general informational or educational purposes only. Information provided may not be the most up-to date legal information, and it is recommended that readers contact their attorney to obtain advice on any particular legal matter.