Common Law Trademarks or "Usemarks."

By Duane J. Higgins, ceo
xtradot.com

I'm not an attorney and I don't play one on the Internet. However, I have to admit it's kind of fun to play desktop attorney and write about whatever I want. That being said, this is a column about common law trademarks. Some are probably questioning why I use the term "usemarks" in my title. The easy answer is that common law trademarks are sometimes called first use marks.  This additional information comes from the USPTO.gov website:

"What are "common law trademark" rights:

Federal registration is not required to establish rights in a trademark.  Common law rights arise from actual use of a mark and may allow the common law user to successfully challenge a registration or application.

Common law trademarks are of particular interest to me as I have owned upwards of ten thousand domain names through the years. In addition, I have certainly obtained common law trademark rights with many of the names through the use of the domain names and product/company names in commerce.

Let me start by mentioning that Yahoo recently spent about a billion dollars for a company called Tumblr.  CEO Marissa Mayer suggesting that 75% of that cost was for the social blogging site's "cachet" with the young trendy set. In Yahoo's quarterly report filed this week Yahoo revealed that  $752 million of Tumblr's value is "goodwill."

What exactly is Ms. Meyer referring to? Clearly she is referring to something that is far removed from the Tumblr tangible assets, contracts, software etc?  If that is the case- then were talking about a non-quantifiable asset that is valued at $752 million by Marissa Mayer!  Am I the only one that finds that interesting?

So is Marissa Myer referring to the Tumblr brand? The Tumbler brand that is of course protected by the Tumbler trademarks?

There are of course federally registered trademarks on Tumblr. However, what if there wasn't?  Is there  a chance that the Tumblr brand and "cachet" would be just as valuable at this point in the companies life?

Federally registered trademarks are of course enormously important and are critical to the smooth functioning of our worldwide intellectual property system. One of the most valuable mechanisms resulting from the Federally registered marks  are important procedural advantages in court, such as a presumption of validity for a plaintiff’s trademark.

But (like most of us) what if you don't have a federally or multinationally registered trademark? Where do you stand (legally) with the use of your business/service name in commerce?

Here's some information you might find interesting regarding ICANNs Trademark Clearinghouse (TMCH) and their position regarding common law trademarks:

Nearly all of the discussions regarding ICANNs newly launched "Trademark Clearinghouse" have been regarding registered trademarks. However, it's important to note that "Common Law" trademarks are eligible for the TMCH as well.

Also keep in mind that inclusion of any trademark in the "Trademark Clearinghouse" is a rights protection mechanism in and of itself. From the Trademark Clearinghouse site:

The Trademark Clearinghouse (TMCH) is the most important rights protection mechanism built into ICANN’s new gTLD program. Its' a centralized database of verified trademarks, that is connected to each and every new gTLD that will launch.

From the TMCH website regarding court validated marks:

Court validated marks refer to a mark that has been validated by a court of law or other judicial
proceeding at the national level, such as unregistered (common law) marks and/or well-known
marks. In the case of a mark validated by judicial proceedings, the judicial authority must have existed as a competent jurisdiction as of the date of the order or judgment. Any referenced authority must have the indicia of authenticity and must on its face confer the specified rights (i.e., the documentation must be sufficient to show validation of the mark without the need for the Clearinghouse to consult outside resources).

And now from the USPTO (United States Patent and Trademark Office)  website:

What are "common law" rights?:

Federal registration is not required to establish rights in a trademark.  Common law rights arise from actual use of a mark and may allow the common law user to successfully challenge a registration or application.


From Wikipedia:

...An unregistered mark may still receive common law trademark rights. Those rights, for example, may extend to its area of influence—usually delineated by geography. As such, multiple parties may simultaneously use a mark throughout the country or even state. An unregistered mark may also be protected under the federal "Lanham Act" (15 USC § 1125) prohibition against commercial misrepresentation of source or origins of goods. Unregistered marks are also protectable in the United States under Lanham Act §43(a).

 From Bitlaw.com:

Trademark rights arise in the United States from the actual use of the mark. Thus, if a product is sold under a brand name, common law trademark rights have been created. This is especially true once consumers view the brand name as an indicator the product's source. Federal registration is not required to establish rights in a trademark.  Common law rights arise from actual use of a mark and may allow the common law user to successfully challenge a registration or application.

From WorldTrademarkReview.com:

Common law and Lanham Act protections afforded to unregistered trademarks provide a wealth of remedies since they are premised on use rather than registration.

Also, from that site:

In the United States, protection is available
for unregistered marks under common law
and the federal statute known as the
Lanham Act (§ 43(a)(1), 15 USC § 1125(a)(1)
(1989)). The owner of a valid but
unregistered mark can seek recourse against
the copyist in state and federal courts.

Also,

Common law and federal law provide the
owner of unregistered trademark rights with
bases for remedies to infringement.

This is from TraverseLegal.com:

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.

This is from Lsntap.org (Legal Services National Technology Assistance Project)

According to case law:

• A party may obtain a common-law trademark or service mark on any terms it uses in commerce, though absent federal registration, common-law status generally limits its protection the geographic area in which the term was used. Accordingly, to bring a claim under the Lanham Act, federal registration is not required, “but the scope of any common law rights vindicated would be limited to areas where the mark is in use.”

Just some information to keep in mind when you register or use a particular domain name for business, service or a product  in commerce. Attorneys will generally recommend the Federally registered mark for the maximum protection.  But keep in mind that a strongly established common law trademark or "usemark" can also serve as a deterrent to abusive practices by other parties.