Many businesses ask if they need a federal trademark to protect the name of their company, or their brand name, or a logo. While usually it is better to have the extra protection that a federally registered trademark provides, there are reasons why businesses choose not to file for federal protection. The following are three questions that businesses have asked, and our answers.
1. I already filed a trademark in Arizona – why would I need a federal trademark registration?
Arizona, like other states, offers registration of trademarks at the state level. There is a small fee, and in my experience, they approve every single application, even when the trademark in Arizona is similar to an existing state trademark or federal trademark. Why do they approve similar trademarks? The reason is that the Arizona standard for approving a trademark is not the correct standard for trademarks. The Secretary of State is doing her job. It is the Arizona law that sets the wrong standard for trademarks.
An Arizona Tradename and Trademark Handbook from the Arizona Secretary of State’s Office cites the Arizona law for approving trademarks: “The Secretary of State shall not file an application for the registration of any trade name, title or designation if it is not distinguishable on the record from any other name previously filed and on record with the Secretary of State” A.R.S. § 44-1460.01(B)
The Arizona standard to register a trademark asks if the trademark is “distinguishable on the record”. This is not the standard needed to enforce a trademark and stop someone else from using your trademark. Distinguishable on the record only means that when the Arizona Secretary of State’s Office looks at the two trademarks, they can find a difference. The standard, however, for enforcing a trademark is to show that the new trademark is “likely to cause confusion” with consumers. Likely to cause confusion means that when a consumer sees one trademark, and then later sees the other trademark that the consumer is likely to think that the companies using those trademarks are the same company or affiliated with each other in some way. When a trademark is filed and approved in Arizona, it may be “distinguishable on the record” but the trademark can still be “likely to cause confusion”. As an example, the Arizona Trademark Handbook says: “‘Capital Builders’ is distinguishable from ‘Capitol Builders’” (emphasis added). This means if you built a business reputation in Phoenix Arizona as “Capital Builders”, for home builders that the Arizona Secretary of State will not reject a trademark application for “Capitol Builders” to be used by a competing home builder. These names, however, are likely to confuse consumers into thinking that the two companies are the same even though the two names are “distinguishable” on the record.
The difference in standards between approval and enforcement of trademarks in Arizona often leads Arizona businesses to believe they have exclusive rights when they do not. A federal trademark registration, however, is only granted after examination based on the “likelihood of confusion” standard and also provides an advantage in court when suing to enforce the trademark.
As intellectual property attorneys, we advise some clients to rely on an Arizona Trademark alone. But that advise is only given after understanding the client’s goals and the risks and benefits of both Arizona State and Federal trademark filings as part of their intellectual property strategy.
2. I have been using my trademark for 10 years without a problem, why would I need to file a trademark registration now?
In some cases there will be little benefit for having a registered trademark, but if you advertise online or do business online, then obtaining a federally registered trademark can have a lot of benefit. In the past ten years, the amount of advertising and business that occurs online has increased into the billions of dollars’ worth of online sales, with a strong growth trend expected for the future. If someone else starts using your same business name online, or starts using a domain name with your business name, a federally registered trademark will make it much more likely that you can stop them.
In some cases, a company has been using a trademark for a long time and does not know that there is another business that already has a federally registered trademark, or is also using the same name in another location. A federally registered trademark can prevent others from registering a similar name in the United States Patent and Trademark Office.
Based on the growth of online marketing and sales, a federally registered trademark can provide a strong benefit to companies that are mostly offline, to prevent competitors from using their name to steal customers online. At Inspired Idea Solutions our intellectual property attorneys work with clients to use federal trademark filings as part of an intellectual property strategy whether or not that company has an internet presence.
3. Do I qualify for a federal trademark? My business is in Phoenix Arizona and I don’t ship outside of Arizona.
In almost every case a business that is only in Arizona still qualifies for a federally registered trademark. The right of the United States Federal Government to regulate trademarks is under the “commerce clause” of the constitution, which gives the Federal Government the right to regulate commerce between the states. Even if you are not shipping to other states, if there is any part of your business that is affected by federal regulation (like federal child labor laws), then the government has already shown that it has power under the commerce clause to regulate your business, and therefore you should have the right to apply for federal trademark rights under the same clause.
A federally registered trademark can greatly enhance the value of a business brand by preventing others from getting federal trademark rights, and greatly strengthening the ability to enforce trademark rights online. As intellectual property attorneys, we help clients determine if a federally registered trademark will bring a good return on investment for their business.