A trademark registration on the Principal Register of the United States Patent and Trademark Office (USPTO) affords the owner several benefits under federal trademark law. Lawyers know them and clients have heard about them. However, practically speaking, business owners, especially those operating in today’s online world, need to know why they should spend the time, effort, and money to obtain a federal registration. While a common law trademark may offer some leverage and/or additional protection in the below described situations, a federal trademark registration is far superior and likely to strengthen your position.
This is a list of the top five situations where a federal trademark registration would be extremely helpful. It should assist any business owner when doing a cost/benefit analysis regarding trademark registration and protection.
Unauthorized Domain Name Registration and/or Use
You have just failed to renew the domain name corresponding to the brand of goods or services you sell. In the alternative, a third party has pirated the domain name, a third party is cybersquatting on the domain name or one that is confusingly similar, or a former employee has absconded with the domain name. While a conversion claim may be available, cybersquatting laws under the Anti-cybersquatting Consumer Protection Act (ACPA) or arbitration through the Uniform Dispute Resolution Policy (UDRP) favor owners with a trademark registration.
Unlawful Online Keyword Advertising
You notice, or someone alerts you to the fact, that when you type your brand into a search engine, sponsored advertisements containing your business name or brand appear in the heading and/or text of the online advertisements. Someone has bid on your brand as a keyword. While many of the various search engines, like Google®, have implemented processes for remedying such a problem, a federal trademark registration is usually required. Moreover, more extensive remedies for trademark infringement or dilution under the Lanham Act are available to federal trademark registrations.
Prohibited Use on an Auction Website
Counterfeit products displaying your brand are being auctioned and sold online at websites such as eBay® without your permission. Having a federal trademark registration not only allows you to benefit from the website operator’s internal controls and processes for handling these situations, which may include removing the auctioned items. You also have additional leverage against the provider of the products themselves (not to mention additional claims for damages) with a federal trademark registration.
Unauthorized Use on a Website
You discover that consumers are purchasing the branded products you sell from another, mistakenly believing that you are the source of the products. Trademark infringement, which occurs when a third party uses your mark to create a likelihood of consumer confusion as to the source of the products or services in order to profit, occurs on the Internet as much, if not more, than it does in the brick-and-mortar world. The benefits of constructive notice, the availability to sue in federal court, and the presumptions of validity and ownership that accompany a federal trademark registration will enhance your position. Moreover, being able to use exposure to $100,000 statutory damages as leverage is also helpful.
Sale or Licensing Opportunity
Prospective purchasers of your business often attribute as much value to intangible assets, such as a trademark and the goodwill associated with it, as they do to tangible assets. As such, having a federal trademark registration may provide additional value and therefore incentive to an entity looking to buy you out. In the alternative, having the ability to license the use of your federal trademark registration in return for a fee may also be enticing to the owner of a brand.
Ultimately, there are numerous benefits to a federal trademark registration. In addition to the above list, there are various other situations where a business owner would be well served to benefit from such a registration. In each of these situations, the first question an attorney would ask after hearing about the matter would be: Do you have a federal trademark registration? The above list may be enough for you to ensure that, in case you face any of these situations, you can answer with a resounding “YES.”