All too often companies choose a name or brand for products without performing a detailed trademark search to discern if that name is already subject to a mark used in commerce. Those companies may have few options if later sued by a competitor with a prior registration. Registering a trademark with the United States Patent and Trademark Office (USPTO) is the primary goal, and for good reason.
The federal registration and Lanham Act have substantially modified common law trademark infringement claims. Federal registration with the USPTO bestows substantial benefits designed, in part, to facilitate defense of the mark on a national level. Registration of a trademark gives the holder nationwide priority. Without registration, the holder may have limited rights to the mark geographically. Registration expands protections on a national level.
For the unsuspecting company that chooses a mark without prior research, it may find that a registration already applies and, so, it has few options left. More commonly, a company adopts a brand but fails to register. Sometime later, a new entity across the country chooses that same brand but promptly registers the mark with the USPTO. That new company probably cannot stop all use of the prior mark in certain geographic territories, but federal registration will prevent the senior holder from expanding its business into new territories. That substantial handicap could be avoided with some initial effort.
Of course, registration also grants holders the following significant protections: the right to sue in federal court; the ability to recover treble damages and costs; protection from unlawful imports; presumptions in favor of the holder when prosecuting infringement claims in federal court (including, at times, a presumption that the mark is not descriptive); and protections against cyber-squatters. So parties on the receiving end of a trademark claim are already behind when the plaintiff has prior registration.
What happens if you lose the footrace to the USPTO and someone registers before you? All is not lost. You can file a petition for cancellation with the USPTO. Grounds for cancellation include, for example: prior use, or prior rights, in an identical or confusingly similar mark; abandonment; claims that the trademark is merely descriptive; the mark was obtained through fraud; the mark misrepresents the source of goods; or the mark suggests a connection that does not exist. You can also defend your mark based on prior use, which must be established with sound evidence. If you receive a cease-and-desist letter or notice of a competing, similar mark, immediate efforts should be undertaken to establish prior use and define the applicable territory broadly.
In short, you eliminate potential costs and liabilities through detailed investigations before using a mark in commerce. No company should assume that a mark is available without a thorough records search. Although we always suggest consultation with experienced trademark counsel (particularly for design marks), the USPTO includes several helpful databases and resources that give even the uninitiated a head start.