By: Jim Dossey, MS, MBA, JD, Registered Patent Attorney
Trademarks serve two purposes – first, they protect customers from being confused or deceived about the source of goods or services in the marketplace. Trademarks help customers know that a particular item is made by the same producer as other similarly marked items that they liked or disliked in the past.
Second, trademarks encourage merchants to stand behind their goods and services because they help assure the merchant "reaps the financial, reputation-related rewards associated with a desirable product." In other words, a merchant will put tremendous time, money, and effort behind marketing their brand… trademarks help protect that investment. Trademarks help merchants prevent competitors from using the same or confusingly similar marks in a way that will confuse customers about the source of the good or service.
A fundamental principle of trademark law is that trademark rights only arise on actual use in the marketplace by the merchant. Unlike patents and copyrights which are limited to a certain number of years, trademark rights are indefinite as long as the trademark owner continues to use the mark, the owner does not abandon the mark, and the mark continues to identify the source of the product or service. Trademark owners must defend their trademarks against unauthorized use to protect against deemed abandonment of the mark or dilution of the trademark value.
Three types of trademarks exist: "common law", state level trademarks, and federal trademarks. "Common law" trademark rights protect the use of the marks wherever they are used in commerce; however, "common law" trademark rights are limited to the specific geography where the mark is used. "Common law" trademark rights arise automatically and require no state or federal registrations. Merchants can immediately start using the (TM) symbol for products and (SM) for services to show that they are claiming the "common law" trademark.
Texas also provides state-level trademark registration through the Texas Secretary of State. Compared to a "common law" trademark, the state-level trademark protects the mark across the entire state, not just where the goods and services are sold. Texas state-level trademarks are relatively inexpensive, costing approximately $50 (plus legal fees).
Federal trademarks are provided through the United States Patent and Trademark Office. Federal trademarks provide nationwide priority for marks that are registered on the Principal Register. Although federal trademarks provide nationwide protection, they do not pre-empt existing "common law" rights of current users of the mark. In other words, a federal trademark owner cannot stop companies from using the mark if they were using it prior to applying for the federal trademark, but the federal trademark will give priority everywhere else.
Because federal trademarks are relatively inexpensive (approximately $275 plus legal fees), most merchants opt for federal trademarks rather than state-level trademarks. Once the trademark is federally registered, the owner can use the (R) symbol to notify others that the mark is claimed on a federal level. Business owners should consider federal registration of their mark as soon as they start actual use (or have a clear intent to use) the mark in the marketplace.
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