Many individuals and business owners believe that they will have time to file for a trademark after they have embarked on their brand’s journey. However, they fail to understand the consequences that may result from not taking proper legal steps and obtaining trademarks from the beginning. Some of these same individuals believe that if they are able to obtain a certain business name (i.e. LLC or Corp) then the trademark should be available. Nevertheless, this is not the case. The business name and trademark are not associated. A business name can be incorporated if there are no other businesses with the SAME EXACT name in that state. On the other hand, when a trademark search is conducted, if a mark in the same class looks or sounds similar to the mark being searched, then there is a high probability that the trademark office will reject the mark based on likelihood of confusion.
There are other grounds under which the trademark office can reject a trademark. Some of the most common reasons for rejections are likelihood of confusion, the trademark is merely descriptive, and the trademark is primarily merely a surname. Even if a proper trademark search is conducted, there is a slight chance that the mark being filed may not be approved by the examining attorney at the United States Patens and Trademark Office (“USPTO”). Nonetheless, I still believe that trademark searches conducted by a knowledgeable trademark attorney are pretty telling of the outcome.
If an owner of a mark cannot obtain a trademark, even if they apply for registration in the early stages of the business, then the owner of the mark doesn’t loose too much money in production and/or marketing costs if they need to rebrand. Nevertheless, if an owner of the mark cannot obtain a trademark for its brand and has already invested a lot of money, time and effort into growing the brand then there is a chance that, (a) they will need to rebrand (lose a lot of money and time), (b) third parties can monetize off their marketing and business efforts without the owner having the ability to protect its intellectual property rights and product/service value in commerce and (c) they can be sued for infringement. If litigation for trademark infringement arises, the damages can cost the company hundreds of thousands of dollars, if not more.
Recently I have encountered multiple cases in which my client’s marks were filed by third parties in spite, due to a personal conflict and/or attempt to sabotage. Hence, it cost my clients triple the amount of money to recover their trademarks in this situation than what it would have cost them to file for a trademark if they would have done so at the onset of using the mark.
It is important to remember that a trademark can be filed when it is already in use or there is intent to use the mark in the future. For legal purposes and purposes of priority, marks that are filed under “intent to use”, the priority date starts the date the mark was filed with the USPTO. Nevertheless, if the mark is filed only when the goods/services go into commerce then the priority date is the date the mark was first used. Hence, for companies building a brand, it is important to file sooner than later because another similar mark can be filed in the interim and may cause the company the need to rebrand or the need to bring legal proceeding to regain ownership of its intellectual property. Rebranding and finding a new brand name/logo can be very time consuming. Therefore, business owners need to do everything in their power to avoid falling into the foregoing pitfalls.
In conclusion, it is important to point out that in the U.S. it is not who registers a trademark first but who starts using the mark first (earliest priority date) and as a result a proper trademark search and obtaining a trademark registration, prior to investing a substantial amount of money into a brand can save a company tons of capital. Thus, for a company to succeed and overcome any unnecessary bumps in the road to success, they must trademark their marks and follow legal protocol to establish their business correctly.