15 U.S.C. § 1125(a) creates a civil cause of action for claims of false designation of origin and false advertising. This provides federal protection for unregistered marks. Marks not registered with the United States Patent and Trademark Office (USPTO) may be protected at the state level by common law or statutes associated with unfair competition. Most states have adopted either the Uniform Deceptive Trade Practices Act or the Model Trademark Bill.
If you do not register your trademark, you will have legal rights only within the geographic areas where you operate. This means you may be able to stop a subsequent user of the mark, even if it is a bigger company, from using the mark in your geographic area only. You can claim trademark rights in your unregistered trademark as long as it is distinctive and identifies or distinguishes your products or services. A trade name for your business is not the same as an unregistered trademark and is not given the same protections under federal trademark law.
Although the range of protection is limited to the region where you use your unregistered trademark, you can protect an unregistered but valid trademark from infringement and dilution under common law. This means you can send a cease and desist letter to try to stop someone from using the trademark without your license.
If you want to bring a lawsuit, however, you will have to prove that your mark is a valid trademark, usually only in state or local courts. You can bring the lawsuit in federal court only if the infringer lives in a different state and the amount in controversy is more than $75,000, or if your case depends on interpreting the Lanham Act or other federal law.
Being the first person to file an application to register a trademark does not guarantee that you will get priority over the trademark. Instead, the date on which a mark was first used determines the right of priority to the mark. This means that you can get trademark rights limited by territory even if you are a tiny, lesser-known business with an unregistered trademark. However, the filing date of a registration is considered constructive use of a mark, and it gives priority over a later date of actual common law use in commerce if the registration application results in a registration.
Benefits of Registering a Trademark
The laws surrounding unregistered marks are derived from principles of unfair competition or unfair business. Specifically, it is considered unfair for somebody to trade on the goodwill you have built up around a mark in order to sell competing goods or services. A famous unregistered trademark can be protected from dilution.
However, there are numerous advantages to registering a trademark that you have used in interstate commerce. These advantages include the right to bring a lawsuit against an infringer in federal court, incontestable status after five years of registration, presumption of ownership, enhanced remedies, and constructive notice of ownership to others around the nation. Incontestability can be helpful because it means that a trademark can no longer be attacked for simply being descriptive, even if it is merely descriptive.
Registration can be a great help when fighting someone for a domain name. Moreover, a small business can become large through online sales. Registration of a trademark can be valuable later, even if its value is not immediately apparent to a small business. A trademark is a form of intellectual property, and as such, it is considered an asset that adds value to a business.