Why is it important to register a trademark?

A trademark is a word or symbol adopted to cause immediate identification of the source for goods and or services which inspires trust, admiration, and loyalty with a perceived level of quality. Trademarks originated in the Middle Ages when craftsmen and merchants wanted to differentiate their products or services from those offered by competitors. Unfortunately, the couterfeiting of trademarks soon followed. A trademark is very important to a business or organization because the general public identifies the mark with the provider of good and/or services. This means the general public equates the mark with the reputation of the goods and/or services. An enterprise's trademark can frequently be its most valuable asset. A study conducted at Columbia University found that for consumer products and services, well-managed brands typically represent 50 to 80 percent of the entire value of their companies. For business to business products and services, the percentages were lower but still significant – 20 to 30 percent.

The opportunities for expansion, franchising, and e-commerce in today's global economy make brand recognition and brand integrity more important than ever. Has your organization taken the necessary action to insure the integrity of its trademark by registereing it? If not, we encourage you to do so. By protecting a trademark, an enterprise is in effect protecting its reputation while discouraging couterfeiting and imposters.

davinciUnder the common law, attorneys fees generally can not be awarded in a trademark lawsuit. The general exception to this rule is that attorneys fees can be recovered if the trademark is registered. Litigation usually costs thousands of dollars. The small expenditure of registering a trademark makes protecting your reputation more practical and cost effective.

In addition to allowing for the recovery of attorneys fees and costs, registration also has a number of benefits. By registering a trademark, the public is served with constructive notice that the mark is being used and that other people should not use a confusingly similar trademark to sell similar goods or services. Registration is also evidence of ownership of a mark.

A federal registration has a number of additional benefits. The registrant is given a nationwide exclusive right to use a trademark in the registered classes against all subsequent users. Federal registration can also be used as a basis for registering a mark in foreign nations. A federal registration can also be filed with the U.S. Customs Service to prevent importation of infringing foreign goods. Lastly, federal law allows for hefty damages in a lawsuit. A successful plaintiff can recover the defendant’s profits and any damages sustained by the plaintiff. In assessing damages the court may enter judgment for any sum above the amount found as actual damages, up to three times. When a court finds a defendant intentionally counterfeited a registered trademark, the court must, unless the court finds extenuating circumstances, enter judgment for three times such profits or damages, whichever is greater, together with a reasonable attorney’s fee unless the Plaintiff elects for statutory damages up to $1,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed.

Benefits of a U.S. trademark registration include:

  • Allows a successful plaintiff to recover attorneys fees in litigation.
  • Availability of statutory damages.
  • Discourages counterfeiting and impostors.
  • Nationwide exclusive use of a mark in registered classes against potential subsequent users.
  • Facilitates franchising.
  • Creates a legal presumption of ownership.
  • Constructive notice to the public of use and ownership.
  • Jurisdiction in federal courts to bring a lawsuit.
  • Prevents importation of infringing foreign goods by filing the certificate of registration with U.S. Customs.
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