The legal basis for protecting trademarks derives from a combination of state common law and federal statutory law. Actual use of most kinds of trademarks establishes protectable trademark rights under common law. However, if the use is made in interstate commerce, the user may apply for federal trademark registration in the United States Patent and Trademark Office (USPTO). Federal registration offers important substantive rights such as constructive notice and prima facie evidence of ownership and validity.
Establishment of Rights
Trademark rights are established by either actually using the mark or by filing a proper application to register the mark in the USPTO stating that the applicant has a bona fide intention to use the mark in commerce. Registering with the USPTO is not necessary for establishing trademark rights. However, registration of a mark helps secure benefits such as giving notice of a claim to the mark, having evidence of ownership of the mark, being able to invoke federal court jurisdiction, being able to use the registration as a basis for obtaining registration in foreign countries and being able to prevent the importation of infringing foreign goods.
Two Types of Rights in a Mark
There are two types of rights in a mark — the right to register and the right to use. Generally, the first party who either uses a mark in commerce or files an application with the USPTO has the ultimate right to register that mark. The USPTO’s authority is limited to determining the right to register. The right to use a mark can be more complicated to determine, which is particularly true when two parties are using the same or similar marks without knowledge of one another and neither has a federal registration. Only a court can render a decision about the right to use, such as issuing an injunction or awarding damages for infringement. Federal registration does provide a significant advantage in court proceedings.
Benefits of Federal Registration
The federal trademark registrant is presumed to be the owner of the mark for the goods and services specified in the registration. Also, a federal registration contains the date of first use. This date is presumed valid and acts as notice to a subsequent user. Additionally, when pursuing a trademark infringer, the trademark registrant is also entitled to additional damages provided for under the federal trademark statutes, which include attorney fees and punitive damages.
Territorial Nature of Trademark Rights
Trademark rights are territorial in nature. Protectable rights in a country depend on compliance with the laws of that country and do not ordinarily extend to another country. Thus, trademark use outside the United States creates no priority rights or rights to protection in the United States. Similarly, a business can establish trademark rights in the United States even when the identical mark is owned by another business in a foreign country.
Duration of Rights
Trademark rights can last indefinitely, unlike copyrights or patents, if the owner continues to use the mark to identify its good or services. The term of a federal trademark registration is 10 years, with 10-year renewal terms. However, between the fifth and sixth year after the date of initial registration, the registrant must file an affidavit setting forth certain information to keep the registration alive. If no affidavit is filed, the registration is canceled.
Owners of Foreign Trademark Registrations
An important exception to the principle that trademark protection derives from use has been carved out for owners of foreign trademark registrations who can obtain a U.S. registration under the Lanham Act without making use of the mark in the United States. However, the owner of the foreign registration must allege, at the time of filing, a bona fide intent to use the mark in the United States.
Jurisdiction of U.S. Courts Outside of the United States
While trademark rights are territorial in nature, under certain situations, the Lanham Act is given extraterritorial effect by a U.S. court. It is well-established that U.S. courts have jurisdiction to enforce the Lanham Act extraterritorially in order to prevent harm to U.S. commerce.