Trademark law is derived from common law that was intended to prohibit companies from competing in the market using unfair and unethical business practices. Trademark law prevents the unauthorized use of a mark in commerce that might cause confusion among consumers as to the true source of goods and services. It also prevents competitors from diluting the reputation and "good will" the product or service has gained with consumers. A business can sue another business for trademark infringement, even if the trademark is registered, if the business bringing suit can prove an earlier date of "first use" of the mark and that it has suffered some sort of damages as a result of the infringement.
Creation of Trademark Rights
A business can acquire certain legal rights in a trademark simply by using it to uniquely identify its brand, goods or services in the public marketplace, even if it never registers the trademark. The strongest claim to legal rights in a particular trademark will go to the business that first uses the mark on its goods or services in commerce. The first user of the mark is determined by proof of the date of “first use” in the marketplace, the distinctiveness of the mark, the goods or service at issue, the geographic area of use and whether or not the mark was formally registered. An enterprise planning to begin using a particular mark is expected to conduct a reasonable search to determine if its proposed trademark would tend to infringe on marks already in use by other businesses.
A business can register its trademark with the state trademark registry in the state where its business is regularly conducted or with the United States Patent and Trademark Office. Alternatively, it may show claim on the mark simply by using it in the marketplace; entitlement to common law rights in a mark are gained just by publicly using the mark. Formal registration of a mark with a state or federal repository is not necessary, but it will create a public record documenting that business’s date of "first use" of a particular mark and put the public on notice of that business’s claim of rights in a mark. However, registration may not be used to disprove a earlier claim of first use by another business. Even if a mark was formally registered, a business can still be sued for infringement if a competitor can prove an earlier "first use" date. Courts uphold the rights in a mark for the business successfully proving the earliest date of first use.
Valid Trademark Requirements
Not just any word, phrase or symbol can be used as a trademark. There are requirements that a mark must satisfy to be registered and considered a valid trademark. The primary requirement is that the proposed trademark be able to qualify as distinctive. A distinctive mark is one that is unique in some way. This type of mark will receive the strongest legal protections based on its unique aspects. A generic mark is one that is commonly used in a trade to identify a certain type of service or product and that could be easily confused with a similar mark due to the common trade use. Generic marks cause confusion for consumers as to the true source of the goods, and as a result this type of mark receives the least legal protections.
The legal protections and rights afforded under trademark law often differ depending on whether the mark has been registered with a state office or the U.S. Patent and Trademark Office, or not registered at all and recognized under common law. The business may only have protections and rights in a limited geographical area or specifically the area where the business routinely uses the mark in commerce. Therefore, another enterprise conducting a similar business in another state may also have legally recognizable rights in an extremely similar mark based on its ability to prove a date of "first use" of the mark in that differing state.