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By Purple Fox Legal

February 22, 2023

Trademarks are an integral aspect of protecting a company’s brand and reputation. They serve as a symbol of the origin of goods or services, an indication of quality, and a representation of the company’s reputation. 

In short, a trademark is any word, phrase, symbol, design, sound, signal, or combination of these things used to distinguish a company’s goods or services from other companies’ goods and services. However, understanding the different types of trademark rights and registrations can take a lot of work. This article will delve into the distinctions between common law trademark rights, state trademark registrations, and federal trademark registrations. 

Common law trademark rights are rights that are acquired through the use of a mark in commerce. These rights exist even without registration and provide protection only within the geographic area where the mark is used. On the other hand, state trademark registrations are obtained through registering a mark with the state government and provide protection within the state where the mark is registered. Meanwhile, federal trademark registrations are obtained through registering a mark with the United States Patent and Trademark Office (USPTO) and provide protection throughout the United States.

Each of these trademark registration options has its own set of advantages and disadvantages. Common law trademark rights are less formal and cost nothing compared to state or federal trademark registrations. However, they provide less protection, as they are limited to the geographic area where the mark is used. State trademark registrations are less expensive than federal ones, but they provide protection only within the state where the mark is registered. Federal trademark registrations are the most expensive and formal of the three options, but they provide the most protection, covering the entire United States.

Businesses need to clearly understand the various trademark registration options available to make an informed decision about how best to safeguard their brand and intellectual property.

Common Law Trademark Rights

Common law trademark rights (or unregistered trademarks) are available to any individual or business that uses their mark in commerce. These rights arise automatically without having to file paperwork with a government agency. 

Common law trademarks give you the right to use your mark exclusively within a geographic area and prevent others from using trademarks that could confuse consumers. However, common law trademarks do not provide nationwide protection; they only protect your mark within the areas where you are using it. Additionally, protection of a common law trademark depends on whether your business was the first to use that trademark in a specific geographical area and whether any similar trademarks have been registered with the USPTO. 

Prior use of and prior federal registrations covering the same or a similar trademark to your business’ can prevent you from using the trademark you want to use and may also result in trademark infringement of others’ intellectual property.

While a common law trademark may offer limited, local protection for a business, its limitations in terms of geographical coverage and enforceability make it an inadequate long-term strategy for protecting a brand.

State Trademark Rights

State trademark registrations provide protection for marks within a particular state and may also be used as evidence of your use of the mark in other states. State registration provides little protection beyond what is provided by common law trademarks, which is why they are typically not recommended by trademark attorneys.

The requirements for registering a state trademark may vary from state to state, but in general, you will need to complete a form, provide a specimen or drawing of your trademark, and pay a filing fee for each class of goods or services being registered.

One advantage of registering a trademark with the state is that it is less expensive than registering with the USPTO (federal registration). You will typically save approximately $200 for each class of goods or services being registered. 

Federal Trademark Rights

Federal trademark registrations offer nationwide protection and allow you to bring infringement cases in federal court if necessary. The USPTO grants federal trademark registration certificates to individuals and business entities after each application goes through a lengthy and rigorous review process. If the USPTO approves your trademark application, it is your responsibility to renew your registration periodically and submit the appropriate renewal fees to the USPTO.

In addition to providing national protection for your mark, federal registration also allows you to use ® next to your mark and gives you access to additional remedies should someone infringe upon it. 

So far, in 2023, there have been over 98,000 federal trademark registrations issued in the United States and over 176,000 applications filed. To give this registration count some context; you should consider that the average number of new registrations in the past three years has been nearly 430,000 per year.

There are four main requirements that need to be fulfilled before a trademark can be registered with the USPTO:

1. The trademark application must be filed under the actual owner’s name. 
2. The applicant must indicate the entity type (individual, corporation, etc.) and their national citizenship. Note: Only one individual or one business entity should be listed as the trademark owner. There should never be multiple trademark owners listed because a trademark is meant to identify a single source of any particular good or service.
3. The application must be based on either actual use or a bona fide intent to use the trademark in commerce. Note: If you submit an intent-to-use application and it is approved by the USPTO, you will be required to submit a specimen showing actual use before the USPTO will issue a trademark registration certificate.
4. When the application is based on actual use, a trademark drawing and a specimen of its use in commerce must be submitted.

New business owners must pay a filing fee of $250-350 per class of goods or services and can expect an average processing wait time of 8.5 months for new federal trademark applications. 

Why You Should Obtain a Federal Trademark Registration

While common law trademarks offer basic protections for small business owners within limited geographic areas, registering for federal trademarks with the USPTOm can provide much greater protection throughout the United States. Federal registrations offer maximum legal protections for those who qualify. By understanding the level of protection and enforcement ability for each type of trademark, small business owners can ensure that their marks remain safe from misuse or infringement by third parties.

Also, be sure to check out our article highlighting the most common trademark registration mistakes and how to prevent them!