How You Develop Your Rights Under Trademark Law

A common misconception I hear about brands and trademarking your brands is the idea that you have to file a formal trademark (or service mark) application for your brands to be protected by trademark laws. On a practical level, this is mostly true, but it isn’t entirely true.

Rather, you begin to form some common-law rights to a brand when you:

  1. put it into use in the marketplace (for most of us, that’s on the internet). A domain is a good example here, and then…
  2. you continue to use it, investing a little money and a little more time into it, and making (hopefully) a lot of money in the marketplace with it, and…
  3. by continuing to claim to be the owner of it in the marketplace or by defending it.

When you do these three things, you’re already establishing some common-law claims and rights to your brand, even internationally.

Then, you can get substantially enhanced and more easily defendable rights to a brand when you continue by:

  1. applying for, and hopefully receiving ;), an approved registration of the trademark by a registering authority (e.g., by the USPTO in the US).

The “Little Internet Problem” with Trademarks

Nowadays with the giant blossoming of the internet, the world is our marketplace! And this can create a problem for us if we try to rely solely on our common-law rights to our brands and tradenames. If we wait too long, other businesses (and proto-businesses) online may swoop in and register a mark before we do, even if their common-law claims were weaker than ours. It can and does happen, more often than you think.

And our little internet problem with trademarks is made worse because of how domain names are registered, owned, bought and sold on the internet. As you’re certainly aware, nearly anyone can go to any number of domain registration sites and for a little bit of money register any dot-com, dot-net or dot-biz that happens to be available via ICANN.

Without getting into too much detail here, the domain-name registration process has developed very separate and detached from the trademark registration process. In the US and elsewhere, this has been heavily litigated over the years but even with ICANN’s “streamlined” procedures, it’s still can be a bit of a mess.

To keep things simple, remember this:
Generally, in a global marketplace like the internet, an approved and actively registered trademark will legally trump other unregistered or common-law marks in the same industry or classes. This includes the rights of someone that has bought a domain name for the sole purpose of turning a profit on the resale of it.

So, especially lately, I’ve been coaching online business owners to sidestep the “little internet problem with trademarks” by doing step #4 above (applying for a trademark) earlier than I used to.

Still …

I will not coach you to totally throw caution (or your hard-earned money) to the wind.

Instead I’ll share with you some simple and practical information to help you come to an informed decision as to when you may want to apply for trademark registration.

Before You Apply for Trademark Registration

Looking back, especially recently, many of us online business owners have wasted our hard-earned money by applying for trademark (or service mark) protection too early. These “early” marks are often untested in the marketplace and we’ve never actually made any money to justify our seeking to register it.

Sometimes the mark is so weak or vague that, even if it’s approved by the registering office, it ends up being very difficult for us to defend it legally after we’ve registered it.

And, because our mark hasn’t made us any money, we also have no money to legally defend it. (Hello, Catch-22! 😉)

To resolve these issues, BEFORE you go looking for a trademark attorney or agent, I recommend you do the following TWO items FIRST:

Item 1: Before You Trademark

My first strongly recommended prerequisite for you BEFORE seeking the help of any attorney or agent to file a trademark application is that your business already be formed and registered as a business entity (e.g., an LLC, corporation, etc.).

When you get your business entity in place before you apply for a trademark then, as you can probably guess, your BUSINESS can be the APPLICANT in your TM application.

Without going into too much detail here, doing things in this order (that is, step 1, organize business entity; step 2, then apply for trademark protection), will save you a bunch of hassle later, will probably improve your chances of getting your TM application approved, and definitely will help you legally defend it later. It will also help in selling your mark or your entire business later!

But Are You Ready For a Business Entity?…

If you want a bit of free coaching from me to help you figure out if you’re ready for a business entity (an LLC, corporation, Ltd., etc.), then check out my [Article or Freebie?] about that [HERE].

Item 2: Before You Trademark

My second strongly recommended prerequisite is to follow my preliminary trademark income rule of thumb, which is that your online business is grossing over us$10,000 before you seek the help of a trademark attorney in seeking a trademark.

That is, in most cases, you’re going to want to achieve at least that total-revenue threshold before you be ready to justify the expense of applying for a trademark and getting it done right.

This first application probably would be to seek the registration of your business name or website name (or personal name in certain professional fields), at least to start.

Trademark Attorney vs Agent

I have a small confession to make. I now consider myself an online business owner first, and an attorney second.

Also, I’m not interested in providing you any legal services or serving as your attorney on your trademark registration application.

For these reasons, you can guess I’m fairly unbiased when I tell you that:

UNLESS you’re an attorney already…

OR you’ve already been involved in, say, 5 or more trademark applications in the last ten years AND you feel comfortable doing basically all the preliminary research on your own…

…then I have to recommend you seek the help of a qualified trademark attorney to help you file your TM application rather than going the DIY route and using one of the many non-attorney TM filing agents out there (at least for now).

Trademark law can be sticky business and is far more complicated than you might imagine. It also can be very time-consuming and expensive if you get it wrong. A good trademark attorney will also be able to help you later if or when it becomes necessary to defend your trademark(s).

Using the Trademark ® Symbol

Unlike with copyright, and with the use of the copyright © symbol (which you can find out more about in this Copyright Article of mine), under nearly every applicable trademark law, you legally can’t and shouldn’t use the “registered trademark” symbol (that is, the ® symbol) UNLESS and UNTIL your trademark application has been fully accepted and your trademark registration is approved.

What about using the “TM” and “SM”  symbols? … (you might be asking). … These symbols (I’m sure you’ve seen them before) usually stand for a trademark (“TM”) or service mark (“SM”) that is not yet registered with a registration authority, but whose “owner” is claiming some local or common-law rights to its use by the three steps I outlined at the beginning of this article.

So, you can use “TM” or “SM” on your up-and-coming brands, if you want to. BUT, don’t let your use of these allow you to think that your brand is secure. And don’t let it slow you down in your preliminary-trademark work once you’re business has met the two requirements I listed above (gross income and incorporation).

ALSO, by using “TM” or “SM”  you may be triggering a registration race if there happens to be someone out there on the internet who is using the same or a similar mark in your industry and has the resources in place to register the mark before you do.

If you think this last reason (a possible registration race) might apply to you, then you may want to wait to use one of these symbols until you have your registration application submitted and pending.

Trademark Help Sheet

Would you like to get all the info about trademarks in this Article boiled down for you in a one-page Cheat Sheet that you can print and follow? If so, for a limited time I’m making that available to you for free [HERE].

 

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