Protecting Brand Value
protecting-brand-value
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My daughters have created an imaginary conglomerate: Winston’s. I often overhear them workshopping slogans for this brand. Some of their slogans seem somewhat questionable, such as “Winston’s food, always edible, rarely poisonous.” Like many companies real and imagined, Winston’s has spent a lot of time in brand building. Now that it is creating this brand value, what are the legal steps it should take to protect it? 

For most companies, a simple and essential step to protecting brand value is to register the company’s trademarks with the United States Patent and Trademark Office (USPTO). Doing so can provide significant benefits, is a fairly straightforward process, and is relatively inexpensive. And since benefits may start upon the application to register the brand – which can be before any public use of the brand – it is better to start sooner rather than later. Here are a few of the important benefits of registering a trademark with the USPTO:

1. The USPTO Will Block Later Applications

Once an owner has a registration – or even just a pending application – the USPTO will block subsequent confusingly similar applications. The USPTO reviews pending applications and rejects those that are for the same or a confusingly similar mark for related goods or services. However, without the registration, a later adopter of the same mark could potentially register first, and prevent the expansion of rights of the more senior unregistered user. 

2. A Fast Way to Get Infringing Content Down

Facebook, Google, YouTube, LinkedIn, eBay, and similar sites are essential tools of modern commerce. They all have policies about pulling down infringing material. In the event of a dispute, having a registration in place is a fast and efficient way to prove your rights to these companies so they will pull down the infringing content. Not having your mark registered can add significant delays and hurdles in getting any of these sites to act against an infringer. 

3. Nationwide Priority 

When you start using a trademark in commerce, you begin to acquire trademark rights in the geographic location of use. In contrast, a trademark registration confers nationwide priority rights. Essentially, instead of merely having geographically restricted rights created through trademark use, a federally registered trademark is deemed to have nationwide use. This can save significant expense in the event of litigation, because a registrant does not have to prove that it has created goodwill through use in the entire United States. 

4. A Registered Mark Can Become “Incontestable”

After five years, the owner of a registration can usually make the registration “incontestable.” This is extremely useful, because in the event of a trademark dispute, one tactic used by litigants is to try to cancel the registration held by the other side. There are several grounds often used to try to cancel a registration, including that the registered mark is generic or descriptive, or that the petitioner bringing the proceeding has prior rights over the registrant. However, once a registration has become “incontestable,” some of these grounds can no longer be used. This can materially change the leverage of the parties in any trademark dispute. 

5. The World Is on “Notice” 

The USPTO maintains a database of all registered marks. A registration creates “constructive notice” to any third party of the existence of those trademark rights. In the event of an infringement action, that later user cannot defend on the ground of innocence, good faith, or lack of knowledge of the registered mark. Further, any third party considering adopting a new mark who checks the database could see the existing trademark, and that may persuade that person to choose something else. This way, with no additional work on the part of the owner of the registration, a conflict is avoided before it starts.

6. Litigation Leverage

A federal trademark registration establishes federal jurisdiction in a trademark infringement action. It grants the registrant the right to file a trademark infringement lawsuit in federal court and to obtain monetary remedies, including the infringer’s unlawful profits, damages, costs, and, in some cases, treble damages and attorneys’ fees. Accordingly, having the registration in place before a dispute begins can dramatically increase the leverage a party has in trying to resolve the dispute.

Generally

In addition to the above, registrants can authorize US Customs to prevent counterfeit goods from coming in, use their registration or application as a basis for filing foreign applications, and if the company eventually starts to wind down a product or service, sell the registration and goodwill as an asset. Even though Winston’s may not yet have any products to market, and may want to start with a focus on quality control, if it is serious about protecting its brand value, it should strongly consider filing to register its trademark. For any company serious about protecting its brand, there is very little reason to delay filing to register with the USPTO.   

JSL

Jason Sanders Law provides results-oriented legal advice in areas of intellectual property, corporate formation and growth, commercial transactions, and dispute resolution. Our clients include companies and individuals in media, software, marketing and advertising, fine arts, entertainment, design, food and beverages, and fashion, among other industries.