As a new startup, you may believe that once you’re able to grab your coveted “dot com” domain name or your graphic designer creates a logo, you can cross the trademark box off the checklist. Not so fast. Failing to conduct a proper trademark clearance search or opting not to get a trademark registration can be risky, and you might wind up having to pull products from shelves, rebrand entirely or even face legal action.
What is trademark clearance?
While you may think that the new name you dreamed up is unique and original, someone else may have already thought of it and may be using it within your field. The fact that you did an online search on the U.S. Patent Trademark Office’s database and didn’t find any marks that are identical to your name, doesn’t necessarily mean the mark is available to use. Under U.S. law, someone may own “common law trademark rights” without a registration from the U.S. Patent and Trademark Office. Common law trademark rights are acquired through use of a mark, so even if someone doesn’t register their brand with the Trademark Office, they may own trademark rights in the U.S. and could assert those rights against you if you adopt a confusingly similar trademark. Also, your trademark doesn’t need to be identical to be problematic. A confusingly similar mark used with related goods or services can also pose an obstacle. While checking the U.S. Patent and Trademark Office database is a good start, it is not a guarantee that your desired name is available. Proper due diligence in the form of a trademark search and opinion from legal counsel is recommended to reduce the risk of being on the receiving end of a cease and desist letter that may require you to drop your name and adopt a different trademark.
Why bother to register my trademark?
After you spend so much time, effort and money coming up with a perfect name and look for your product or service, you don’t want your competitors to use your brand or even come close to it. Obtaining a trademark registration is a great tool to prevent that from happening. You can register your brand at the state level, with the Secretary of State’s office, or federally, with the U.S. Patent and Trademark Office. Registration at the state level protects your brand in the state that you registered with, while federal registration gives you exclusive rights to your mark in all 50 states and U.S. territories. Applications can be filed online and applicants do not need an attorney to do so, although legal advice may help avoid pitfalls.
I already filed my corporate records, why do I need a trademark registration?
Many business owners mistakenly believe that a company name is synonymous with a trademark. A corporate name is the legal name of the business entity that appears on the articles of incorporation or bylaws filed with a Secretary of State’s office. Think, for example, of Anheuser-Busch, LLC. A trademark, on the other hand, is the word, design, slogan or combination thereof that you use to name your product or your service, such as BUDWEISER®, a trademark owned by the company named Anheuser-Busch, LLC. While your company name may incorporate your trademark (e.g., The Coca-Cola Company), the mere fact that you legally incorporated your business does not give you any trademark rights in that name of parts thereof. You will need to seek separate trademark protection if you wish to have exclusive rights over a certain name.
I was able to grab my “dot com,” so I’m good.
This is another common misconception. In the crowded “dot com” world, it is a small victory to realize that your desired domain name is available to register. But a domain name registration is not the same as a trademark registration. If all you have is a domain name registration for www.MYBRAND.com, a third party could start using the name MYBRAND before you do or could even file a trademark application before you do. They could, therefore, acquire rights in the name before you do, ultimately preventing you from using your www.MYBRAND.com domain name.
We totally get it! But it doesn’t make sense to invest time and resources developing your brand and then fail to protect it. With the many challenges and expenses new businesses face, it’s easy to postpone investing in intellectual property protection. This delay, however, may end up being more costly and overwhelming than the preventive steps discussed above. When it comes to trademark rights, the old adage is true that an ounce of prevention is worth a pound of cure. By failing to clear your brand, you may unintentionally infringe on someone else’s rights, and by waiting too long to protect your own trademark, someone else may beat you to it.
Flavia Campbell is a partner with Lewis Roca Rothgerber Christie. She focuses her practice primarily in the areas of trademarks and copyrights.