On your MARK….get set…tradeMARKS!

A colleague recently inquired about the use of SM, TM and ® as superscripts to marks that designate products and services. More specifically, when is the application of these superscripts appropriate to designate a businessperson’s commodities in the ‘stream of commerce?’ But first, let’s back up and familiarize everyone with several basics of United States trademark law: (i) classification by subject matter; (ii) the concept of mark use; and (ii) rights acquired by mark registration.

Initially note with respect to subject matter, that there are two kinds of marks in the United States: trademarks and service marks. Trademarks designate products such as beverages and clothing, while service marks designate services such as hairdressing and carpentry. Some trademarks can designate products and services at the same time if they are used in the manner required by law.

Furthermore, in the United States ownership and rights to a mark that designate goods and services is established and maintained by use of the mark. The mark must also be used continuously in a commercially reasonable volume and manner. This fundamental rule contrasts sharply with the law in most countries: In these countries the first entity to obtain a government registration of a mark is the rightful owner and not the entity that first used the mark commercially. An example of disasters that may occur if one is not aware of this important difference is as follows: A United States company uses its trademark in the United States and in Germany without registration in either country. In the United States the mark is used continuously and appropriately, and consequently certain rights in the mark arise in the United States. This same mark is used in a similar manner, and from a similar point in time, in Germany. After these events an independent German businessperson registers the same mark in Germany without use. The result? The German businessperson owns all the rights to the mark in Germany, although the U.S. business person used the mark in Germany prior to the German registration!

Another important concept of United States trademark/service mark law is the acquisition of rights to a mark without federal registration. If the mark is used in an appropriate manner, the business person acquires what are known as common law rights. In fact there are numerous court decisions in which neither business owner has actually federally registered the mark. In those cases the person who uses the mark first in time definitely holds the advantage, assuming other conditions are met.

What happens in the United States when earlier acquired common law rights collide with later federal registration of the same mark by a second entity? The importance of mark use is so embedded in United States law that the prior unregistered mark user will nevertheless retain some geographic rights. However, this prior user acquires fewer rights to a mark than it would otherwise own if it had federally registered the mark. For example, the owner of the registered mark can now use the mark anywhere in the United States. Meanwhile, despite earlier use the unregistered owner can only use the same mark in the actual geographic area in which it was in fact used. This prediction assumes that other conditions are met, such as the goods and/or services of the owners are related or identical to each other.

© 2011 Adrienne B. Naumann
Ms. Naumann does not endorse or sponsor the advertisements at adriennebnaumann.wordpress.com

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