Many businesses and individuals do not know that trademark rights arise not only from registration with the United States Patent and Trademark Office, but from simply use of a trademark in connection with goods or services. These rights, or common law trademark rights as they are known to lawyers, come from the continuous prior use of a mark in commerce. But common law trademark rights are not preferred, as they extend only to the places where a trademark has been used in commerce. Additionally, they do not offer the benefits of federal registration with the United States Patent and Trademark Office, such as the ability to recover profits, statutory damages, attorneys fees, treble (triple) damages for willful infringement, national priority, and the right to use the ® to give notice of rights in a mark.
Common law rights require prior actual and continuous use in commerce. To prove common law rights in a mark, one must show that it was the first to use the mark within a geographical area. Courts look at many factors in determining whether one has acquired common law rights in a mark: widespread distribution, public association with the mark, whether consumers associated the mark with the source of the goods, whether the mark has become distinctive, and whether the mark owner has exercised control over the quality of the goods and has used the mark in a trademark sense.
Common law rights are severely limited because they are restricted to the geographical area where the mark was used. Common law rights, when recognized, will protect a mark holder as against infringement only within that specific geographical market. If another mark-user comes along and registers the same mark on the federal level, the subsequent registrant will have rights in that mark in all areas but the limited geographical area where the prior mark-holder had used the mark in commerce, or the area where the common law mark holder would reasonably be expected to expand. Simply put, federal registration is preferred if one seeks nationwide protection for a trademark because it will put the entire nation on notice of your claim of trademark rights in the mark.
Do not be deceived by the term “rights” when in association with common law rights. Common law rights are a right of last resort. If you are seeking trademark protection on the internet and across the nation, it is best to contact an attorney and seek a federal registration with the United States Patent and Trademark Office.