Common Law Vs Federal Registration: Who Wins?

In the United States, common law trademark rights are based on the priority of use of a mark within a certain territory. These rights are not governed by statute but are instead developed under a judicially created scheme of rights governed by state law. While federal registration is not required to establish common law rights, it is recommended as it gives trademark owners substantial additional rights. A common law trademark may prevent another business from selling a similar product under the same name in the same geographic area. However, it is challenging to enforce common law trademark rights due to the lack of a public record of the trademark or its usage history. On the other hand, federal trademark registration provides nationwide protection and is listed in the USPTO database, deterring others from adopting similar marks. While federal registration does not guarantee the exclusive right to use a mark in all circumstances, it empowers the Patent and Trademark Office (PTO) to police the mark by rejecting subsequent applications. Nevertheless, no mark is entirely immune from challenges by prior users, even if it is federally registered and incontestable. The Trademark Trial and Appeal Board (TTAB) and the Federal Courts share the authority to cancel federal trademark registrations issued by the USPTO. A petition for cancellation can be filed at any time after the grant of federal registration, but the grounds for cancellation are limited for registrations older than five years.

Common law trademark rights

In the United States, trademark rights are acquired through the actual use of the mark in commerce. This means that if a product is sold under a brand name, common law trademark rights have been created, especially when consumers view the brand name as an indicator of the product's source. These rights are not governed by statute but have been developed under a judicially created scheme of rights governed by state law.

Federal registration is not required to establish common law rights in a mark, nor is it required to begin using a mark. However, it is almost always recommended as it gives trademark owners substantial additional rights not available under common law. These include the right to bring a lawsuit concerning the trademark in federal court and the ability to use the federal trademark registration symbol (®).

To obtain federal trademark registration, one must file an application with the USPTO and have it approved. A trademark search should be conducted beforehand to ensure that the mark does not infringe on someone else's federal, state, or common law trademarks. The Trademark Trial and Appeal Board (TTAB) and the Federal Courts share the power to cancel federal trademark registrations issued by the USPTO. A petition for cancellation of a trademark registration can be filed at any time after a federal trademark registration has been granted, but if the registration is more than five years old, the grounds for cancellation are limited.

Cancellation of federal trademark registration

Cancellation of a federal trademark registration is a complex process and is shared by the Trademark Trial and Appeal Board (TTAB) and the Federal Courts. A petition for cancellation can be filed at any time after a federal trademark registration has been granted by the USPTO. However, if the registration is more than three years old, the grounds for cancellation are limited.

A petition to cancel a registration of a mark, stating the grounds, may be filed by any person who believes that they are or will be damaged by the registration of a mark on the principal register. The petitioner must demonstrate a legitimate interest in the case and meet the burden of making a "prima facie" case of abandonment via a preponderance of the evidence. This means showing that the defendant has terminated the use of the trademark with no intention of resuming usage, or that the registrant has not actively used the trademark for a period of three consecutive years.

The USPTO is primarily concerned with maintaining and protecting the trademark rights of worthy owners. If the USPTO determines that an existing owner of a trademark does not have the right to the trademark, it will strip the applicant of the mark. A junior applicant can file a petition for cancellation if they believe a senior applicant is negatively affecting their ability to register their own mark.

It is important to note that federal trademark registration does not guarantee the exclusive right to use the mark in all circumstances. Common law trademark rights are based on the priority of use of a mark within a certain territory. These rights are limited to the geographic area in which the mark is used. Obtaining a federal trademark registration can strengthen common law rights and provide additional benefits, such as nationwide constructive notice of registration and the ability to file a lawsuit in federal court to enforce those rights.

Grounds for cancellation

Cancellation of a federal trademark registration does not invalidate the trademark itself. A petition for cancellation can be filed at any time after a federal trademark registration has been granted. However, if the registration is more than five years old, the grounds for cancellation are limited.

The most common ground for cancellation of a trademark registration that has been registered for more than five years is that the registered trademark is generic for the goods and/or services described in the registration. For a trademark to be cancelled on this ground, the entire mark must be generic.

Another ground for cancellation is that the registered mark has never been used in commerce in connection with the goods or services recited in the registration. In this case, the Federal Trade Commission may apply to cancel the mark.

Additionally, a petition to cancel a registration of a mark may be filed by any person who believes they are or will be damaged by the registration of the mark, including as a result of a likelihood of dilution by blurring or dilution by tarnishment. This petition must state the grounds relied upon and be accompanied by the payment of a prescribed fee.

It is important to note that trademark rights in the United States arise from the actual use of the mark, and common law trademark rights can be established simply by using a trademark in one's business. These rights are limited to the geographic area in which the mark is used. Federal registration of a trademark is not required to establish common law rights, but it provides additional benefits such as nationwide constructive notice of registration and the ability to file a lawsuit in federal court to enforce those rights.

Petition for cancellation

A petition for cancellation of a trademark registration can be filed at any time after a federal trademark registration has been granted by the United States Patent and Trademark Office (USPTO). However, if the registration is more than five years old, the grounds for cancellation are limited. The Trademark Trial and Appeal Board (TTAB) and the Federal Courts share the power to cancel federal trademark registrations issued by the USPTO.

A petition for cancellation can be filed by anyone who believes they are or will be damaged by the registration of a mark on the principal register. This includes damage as a result of the likelihood of dilution by blurring or dilution by tarnishment. The petitioner must state their grounds for cancellation, which may include non-use, abandonment, genericness, descriptiveness, likelihood of confusion, fraud, bad faith, or prior rights.

It is important to note that trademark law can be complex, and an attorney can provide guidance and ensure that correct procedures are followed. The filing fee for a trademark registered in three classes would equal $1,800, and these fees cannot be refunded. Once a petition is filed, the respondent will have 40 days to file an answer. If no answer is filed, the TTAB will issue a Notice of Default, giving the respondent 30 days to convince the Board not to enter a judgment against them. If neither notice receives a response, a default judgment will likely be entered, and the trademark in question will be cancelled.

It is also important to remember that cancellation of a federal trademark registration does not invalidate the trademark itself but rather the legal standing of a trademark, opening it up for legitimate use by another party. Additionally, having a trademark registration does not guarantee the exclusive right to use the mark in all circumstances. Under common law, trademark rights within a certain territory are based on the priority of use of a mark within that territory.

Trademark law complexities

Trademark law is a complex area of intellectual property law, and it is often challenging to navigate its intricacies. One such complexity arises when examining the interplay between common law marks and federal trademark registrations. While it is commonly assumed that a federal trademark registration confers exclusive rights to use a mark, this assumption is not entirely accurate. The reality is that even a valid and incontestable federal registration does not guarantee the absolute right to use a mark in all circumstances. This is because, in the United States, trademark rights are primarily established through the actual use of the mark, as outlined under common law.

Common law trademark rights are territorial and based on the priority of use within a specific geographic area. These rights are acquired simply by using the trademark in commerce, without the need for formal registration. For example, if a company sells a product under a particular brand name only in California, their common law trademark rights exist solely within that state. Another company using the same mark in New York, without knowledge of the California company, would not be infringing on their trademark rights. However, if the New York company attempted to sell their product in California, the common law rights of the California company would prevent them from doing so.

The complexity arises when a federal registrant is not the first user of a mark in a particular territory, and an unregistered prior user, or common law user, may have superior rights within that territory. In such cases, determining the rights of the parties becomes intricate and requires a meticulous evaluation of complex facts and laws. While federal registration provides additional benefits, such as nationwide constructive notice and the ability to file lawsuits in federal court, it does not automatically supersede common law rights.

Adding to the complexity, a petition to cancel a federal trademark registration can be filed with the Trademark Trial and Appeal Board (TTAB) or the Federal Courts at any time after the registration has been granted. However, if the registration is older than five years, the grounds for cancellation are limited to specific circumstances, such as the mark becoming generic or descriptive of the goods or services it covers. This process further highlights the intricate nature of trademark law, where even a federal registration may be subject to cancellation under certain conditions.

In conclusion, the interplay between common law marks and federal trademark registrations underscores the complexities of trademark law. While federal registration provides enhanced protection and benefits, it does not guarantee absolute exclusivity. Common law users with prior rights within a specific territory may challenge federal registrants, leading to intricate legal evaluations. The possibility of cancellation proceedings further emphasizes the dynamic and multifaceted nature of trademark law. Navigating these complexities often requires the expertise of trademark attorneys, underscoring the importance of seeking specialized legal guidance in this area.

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