Benefits of federal trademark registration (principal and supplemental registers)

Benefits of Federal Registration on the Principal Register

Trademarks may be federally registered on the principal register if they are distinctive, and otherwise qualify for federal registration. Here are some of the benefits of federal registration on the principal register:

1. A certificate of registration is prime facie evidence of (a) the validity of the registered mark and of the registration of the mark, (b) the registrant’s ownership of the mark, and (c) the registrant’s exclusive right to use the registered mark in commerce on or in connection with the goods or services.

3. Registration of the mark provides constructive notice of the registrant’s claim of ownership.

4. Right to use ®. This puts the world on notice of registration of your mark, and that you are a sophisticated trademark user. Also, no profits or damages may be recovered in a trademark infringement action unless the defendant had actual notice of the registration.

5. An infringement action may be brought in Federal court.

6. Right to injunction and have an infringer’s use of a conflicting mark immediately terminated.

7. Right to have counterfeit goods seized.

8. Entitled to recover profits, damages, and costs of the action. Plaintiff needs only to establish sales, defendant must establish deductions. Damages may be trebled by the court.

9. Court may order destruction of advertising materials and containers which include the infringing mark.

10. Infringing imported goods can be seized by customs.

11. Our experience is that users of conflicting marks are much more responsive and willing to resolve a conflict if the challenging trademark has been federally registered. This save significant cost and effort.

Benefits of Federal Registration on the Supplemental Register

Trademarks which are merely descriptive or otherwise not distinctive may not be registered on principal register, but they may in many cases, and if the mark is capable of becoming distinctive, be registered on the supplemental register. Here are a few of the benefits of registration on the supplemental register:

1. Right to use ®. This puts the world on notice of registration of your mark, and that you are a sophisticated trademark user. Also, no profits or damages may be recovered in a trademark infringement action unless the defendant had actual notice of the registration.

2. An infringement or unfair competition action may be filed in Federal court.

3. Entitled to recover profits, damages, and costs of the action. Plaintiff needs only to establish sales, defendant must establish deductions. Damages may be trebled by the court.

4. Court may order destruction of advertising materials and containers which include the infringing mark.

5. Applicant may seek registration on the principal register after mark has acquired secondary meaning.

6. Registration on the supplemental register does not constitute an admission that the mark has not acquired distinctiveness.

How to obtain federal trademark registration

I am frequently asked how to obtain and maintain federal trademark registration. Here are the steps:

1. Identify several potential trademarks. Try to be creative, and avoid marks that are descriptive of the products or services being sold. Marks that are merely descriptive are not registerable on the principal trademark register of the Patent and Trademark Office (PTO), and they are more difficult to protect and defend.

2. Run a knock out search on all of the potential marks identified. The knockout search should include google searches, and a search of the PTO database. Remember that the PTO will not register trademarks that are confusingly similar to other trademarks registered in the PTO, or which have been previously in use in the United States. Likelihood of confusion extends well beyond identical marks, so the failure to find an identical mark to one of the marks you are considering does not mean the potential mark is acceptable to use.

3. From the marks that make it past the knockout search stage, select the best one. Have a comprehensive search done for the selected mark. Comprehensive searches are a critical step to avoiding infringement on others’ marks, and avoiding refusals to register by the PTO. However, they are also expensive. That’s why knockout searches are done first to limit the field of potential trademarks. Comprehensive searches are not perfect, and there is room for error, but they can significantly reduce the risk of infringement and refusal to register a trademark.

4. File an application for registration. An application may be an “intent to use” application, if the mark is not already in use, but the applicant has a bona fide intent to use the mark, or an “actual use” application, if the mark is already in use in commerce. Applications filed for goods and services must fall into one of the predetermined categories or classes of goods and services. The filing fee is based on the number of classes the goods and services fall under for a particular trademark.

5. Wait for a response from the PTO, and respond to office actions. The PTO will conduct a substantive examination of the trademark application. The examining attorney may determine that the application is fine, and the application will proceed to the next step toward registration. Alternatively, the examining attorney may find some procedural or substantive issues in the application, and issue a formal or informal office action. Office actions require a response within six months of the date on which the office action is issued. If no response is filed, the application will be abandoned by the PTO.

6. The trademark will be published in a government publication called the Official Gazette, after the examining attorney has completed the review process, and all issues raised by the examining attorney in one or more office actions have been resolved. Publication in the Official Gazette puts the world on notice that the trademark will be registered. Anyone who believes that he or she will be damaged by registration of the mark may file an opposition proceeding during the thirty day publication period. If an opposition proceeding is filed, the applicant must respond and work through the opposition proceeding process, which is essentially a mini-litigation or administrative proceeding.

7. Notice of Allowance and registration. After publication, and assuming either an opposition is not filed or any opposition proceeding has been favorably resolved, if the application was an “actual use” application, the trademark will be registered. If the application was an “intent to use” application, the examining attorney will issue a notice of allowance, which triggers a six month period during which the applicant must submit to the PTO evidence of use of the trademark.

8. Declarations of continuous use and incontestibility. Between the fifth and sixth years after registration, the applicant (now registrant) must file a section 8 declaration certifying that the trademark is still in use. If the section 8 declaration is not filed, the PTO will cancel the registration. In addition, during the same time period, the registrant may file a section 15 declaration seeking incontestability of the trademark. If the trademark meets the requirements for a section 15 declaration, the registered mark becomes incontestable, this means that the registration of the mark may not be challenged, except on limited grounds.

9. Renewal of Registration. Between the ninth and tenth years after registration, and between the ninth and tenth years thereafter, a section 8 declaration must be filed to avoid cancellation of the registration by the PTO, and a section 9 declaration must be filed to renew the registration of the trademark.

There is obviously much more to choosing and registering a trademark, but these are the fundamental steps and process.

Early trademark registration is significant for protecting trademarks in domain names according to a UDRP decision denying transfer of musicmaker.com

Early trademark registration is significant for protecting trademarks in domain names according to a UDRP decision denying transfer of musicmaker.com. The respondent in the UDRP (Uniform Domain Name Dispute Resolution Policy) proceeding, The Music Connection, located in Reston, VA, offers custom music CDs and digital downloads. The company registered the domain name musicmaker.com on November 11, 1996.

The complainant in this case, MAGIX Software, a German company, offers software, mobile apps, and online services for music and video hobbyists. The most successful product of the company is MUSIC MAKER, a digital audio stream workstation. The product is now internationally known and used. The complainant registered the trademark MUSIC MAKER in Germany in 1994, and in the United States in 1997, with a date of first use in the United States of June 4, 1995. However, the mark was not published for opposition, and therefore made a matter of public record, until July 15, 1997, after musicmaker.com was registered.

The panelist in its decision to deny the complaint to transfer the domain name said that because the trademark MUSIC MAKER was not published in the United States until after musicmaker.com was registered, he was unable to infer that The Music Connection should have been on notice of any rights that would have prevented the registration of musicmaker.com.

The complainant likely could have prevailed on the complaint if its mark had been distinctive and federally registered prior to the registration of the domain name. Although the panelist ultimately made his decision based on the lack of bad faith registration and use, early trademark registration may have been sufficient to overcome that part of the decision as well. (MAGIX Software GmgH v The Music Connection, D2015-1216).

Watch for employee registration of domain names using employer trademarks

According to one source (http://www.statisticbrain.com/employee-theft-statistics/), the annual amount of employee theft from US businesses is $50 billion, and seventy five percent of employees have stolen at least once from their employer. It’s no surprise that employers have security cameras in stores, and policies in place to reduce the amount of employee theft. What is surprising is that employers are not more careful with other assets.

Although perhaps not technically theft, there is a new employee risk
relating to employer assets in the online world. Some seemingly clever employees have chosen to register their employe
r’s trademarks as second level domain names to enhance the value of the domain names. With registration of the domain names in hand, the employee’s intent may be to sell the domain names back to the employer, offer them on the domain name market to someone seeking a high traffic domain name, or hold them for some misguided leverage against the employer in the future. Any of these  strategies should not be acceptable to an employer as a trademark owner, and appropriate action should be taken.

Trademarks, and the associated goodwill, are valuable assets of employers. Many employer trademarks have been in existence for years, and based on extensive use and effort, have become significant tools for consumer awareness, brand loyalty, and quality consistency. Misappropriation and misuse of trademarks can be very costly for employers, and can damage the valuable goodwill associated with the marks. Having employees compromise the value of the trademarks should be taken seriously.

Although employees owe a general duty of loyalty to their employers, it is not always clear whether the rules for employees registering domain names are different than for an independent third-party registering domain names that include the employers trademarks. Attempting to discipline an employee for using a trademark in a domain name may not be an easy case. Probably the best course of action is for employers to adopt broad policies relating to employee use of trademarks, specifically as they relate to domain names. Also, employers need to be vigilant in monitoring the use of their trademarks in domain names, and in any other way that might impact or compromise the integrity of the goodwill of the marks.

Protect your brands – It’s time to register trademarks in the trademark clearinghouse

It’s time to start thinking more seriously about protecting your brands and trademarks in the online world.  Businesses expend significant time and resources developing and protecting brands in the physical world, but are not as careful in the online world.  Brands are frequently included in domain names, and are often the dominant part of domain names.  Although domain names may not by themselves communicate a strong message, because they are simply an address for a website, they are the gate through which consumers get to your business, and they directly impact the goodwill of your brand.  

Cybersquatting is as active today as ever, and it is going to get much worse.  Under the old regime of a few top level domain names (the name to the right of the dot, such as .com or .org), cybersquatting was a concern.  But with the introduction of thousands of new generic top level domain names (ngTLDs), the potential for misuse of brands will increase exponentially.

There were 1,930 applications submitted for ngTLDs (prior blog post) in the first round, and of those 1,930 applications, 417 ngTLDs have launched, and almost 1,200 are in the contracting stage, which means they will be available for launch soon.  Some of the ngTLDs that have launched include .homes, .auto, .loans, .global, and .toys.  It is anticipated there will be additional rounds of applications for ngTLDs.

Some of the risks to your brand if you do not protect against cybersquatting include sale of counterfeit goods, phishing, loss of goodwill, and brand tarnishment.  Recently thousands of websites were forced down because they were selling counterfeit Oakley products.  The websites in many cases included the brands of others.  In the complaint filed by Oakley Products, the plaintiff alleged that bogus websites are estimated to receive tens of millions of visits per year and to generate over $135 billion in annual online sales. The U.S. government seized over $1.26 billion in counterfeit goods in 2012, up from $1.11 billion in 2011.  The magnitude of the problem is huge.

Phising occurs when a cybersquatter posts a bogus website using a domain name similar to a brand owner’s trademark, and collects data and personally identifiable confidential information.  Loss of goodwill can occur in many ways including having a variation of a brand or trademark used on multiple websites that are not owned or controlled by you, the brand owner.  Cybersquatters do not only display brands in domain names, but they display the brands on bogus websites.  Tarnishment can occur when a website is posted using a brand, or variation of a brand, and the website displays inappropriate and or provocative images or content inconsistent with the goodwill associated with that brand.

Part of any strategy dealing with cybersquatting should include registering, in the trademark clearinghouse, federally registered trademarks.  I have viewed this as so critical that our law firm has become a trademark agent of the trademark clearinghouse, so we can submit trademarks to the clearinghouse without having to use a third party service.  When a trademark is accepted in the trademark clearinghouse, the brand owner may register domain names under ngTLDs during the sunrise period.  The sunrise period is a period for registration of domain names before the general public can register domain names.

In addition, following the sunrise period, there is a claims period.  During the claims period trademark holders will receive notice of any domain names that are registered under a ngTLD by a third party.  This will provide an opportunity to take appropriate action early in the process.  The person registering the domain name will also receive notice that the domain name being registered is the trademark of another person or business.  Hopefully, this will have some deterrent effect, although that is not likely.

There are other strategies available as well, but for now, the best action to take is to file valuable federally-registered trademarks in the trademark clearinghouse to obtain some protection against cybersquatters under the potentially millions of new domain names under the ngTLD that are increasing weekly.  Although not all brand owners will want or need to take aggressive steps, filing in the trademark clearinghouse should be part of a good domain name management strategy.  Unfortunately, doing nothing and hoping for the best is naïve and will weaken the value of your trademark.