Registered vs. Unregistered Trademark

By Tom Speranza, J.D.

Registered vs. Unregistered Trademark

By Tom Speranza, J.D.

A trademark consists of words, symbols, designs, images, and colors used by a business to identify its products and services in the marketplace. A trademark has two purposes:

  • To inform potential customers that the product or service originates from a single company or source
  • To distinguish one company's products and services from those sold by its competitors

Woman with sparkly nails writing "Trademark" on poster with related words surrounding it

Basically, a trademark exists to prevent consumers from being confused about who has manufactured a product. The Rice Krispies trademark tells the world that the rice-based breakfast cereal is manufactured and distributed by Kellogg's, while the Cheerios trademark informs consumers that the oat-based cereal is manufactured and distributed by General Mills.

In the United States, a trademark can be registered with the U.S. Patent and Trademark Office (USPTO), but there's no legal requirement for doing so. A business can decide to build rights in a trademark simply by using it in commerce. Unregistered trademarks—also known as common-law trademarks—have the same two functions mentioned above, but they confer a different bundle of legal rights and are distinct from registered trademarks in several important ways.

Expense

First and foremost, operating your business with an unregistered trademark is, at least initially, simpler and less expensive. There are no federal filing fees to pay or money spent on intellectual property lawyers. It still makes sense to engage a well-known commercial search firm to confirm the availability of your trademark before you start investing in things such as signs, advertising, packaging, and stationery, but the startup costs are otherwise minimal.

Geographic Scope

A trademark registration with the USPTO gives your business national rights in the mark and also makes it eligible for protection in other countries using an international application filed with the World Intellectual Property Organization. A business's rights in an unregistered, common-law trademark only extend to the geographic area of the market for the business's products and services. This is usually measured by the physical location of the business's customer base and the geographic reach of its advertising.

Priority Date

Trademark rights depend on priority—you can only stop someone else from using a similar mark if your use started before the infringer's use. Registering a mark with the USPTO gives your business national rights as of a definitive priority date:

  • If you file an intent-to-use application, the priority date is the day you submit the application, even if, for example, you don't start using the trademark in commerce until three years later.
  • If you file a use-based application, your nationwide priority date is the day your registration is issued.

Legal Implications

A trademark registration confers some other important legal advantages:

  • A USPTO registration gives you automatic access to federal court if you sue an infringer. With a common-law trademark, you cannot use federal courts unless the infringer is located in a different state and your claim for damages exceeds $75,000.
  • Under the Lanham Act, a plaintiff can obtain statutory damages for infringement of a registered mark between $1,000 and $200,000 for each use of a "counterfeit mark." If the infringement is found to be willful, the statutory damages can be even higher. The Lanham Act also gives a plaintiff the right to seek reimbursement of attorneys' fees from the defendant.
  • After five years of continuous use, a registered mark becomes "incontestable," meaning that a defendant in an infringement case cannot counterclaim that the plaintiff's mark is "merely descriptive" and, therefore, invalid.
  • The owner of a registered mark is entitled to use the "R in a circle" symbol (®) on its mark, while a common-law mark can only carry the superscript "TM" symbol.

Notice to the World

A registered mark puts the world on notice that your business claims it as a mark for its products and services. Because your mark is public information easily found online in the USPTO's database, potential competitors will be less likely to adopt a trademark that is confusingly similar. An unregistered trademark is usually not well known and only has a small footprint in the U.S. marketplace.

If your business is thinking of launching a new trademarked product or service, an experienced intellectual property lawyer can help you weigh the pros and cons of investing in a federal trademark registration.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.