Trademarks are governed by both State and Federal law. However, the Federal law provides the most extensive protection available. Still, common law trademark rights and State common law actions are still available.
Assuming that a mark is distinctive and qualifies for protection, there are two ways that rights in a trademark are acquired: (1) first to use the mark in commerce; and (2) first to register the mark with the United States Patent and Trademark Office (USPTO).
Under the common law, the basis of getting rights in the trademark is by the use of the mark. You must use the mark in a particular territory. Use is the primary basis of getting rights in the mark. The use must be as a trademark, not in some other manner. The mark must be used in the course of business. Use of the mark means the actual sale of a product to the public with the mark attached.
Under common law, the first to use the mark is the owner of the mark. The owner may be an individual, Corporation, Partnership, Limited Liability Company, or other legal entity. However, common law trademark rights are not preferred, as they extend only to the places where a trademark has been used in commerce and areas in which there is a reasonable expectation of expansion.
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. Moreover, if the mark is descriptive, there may be a period of time in which the mark is used in commerce before it acquires a secondary meaning. During this period the mark is not entitled to protection. Only until the mark acquires secondary meaning is the mark protected by trademark law.
Common law rights are severely limited because they are restricted to the geographical area where the mark was used or reasonably expected to be used (the natural zone of expansion). 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.
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 seek a Federal registration with the United States Patent and Trademark Office (USPTO). - {CHAPTER'S} 0:00 Introduction 0:05 COMMON LAW TRADEMARK RIGHTS 1:02 First to Use = Owner 2:00 COMMON LAW RIGHTS RESTRICTED! 2:41 FEDERAL REGISTRATION PREFERRED
