Uncommon Knowledge: Priority and Common Law Trademark Rights
Alex Sandler | December 25, 2020
When conducting a trademark clearance search, attorneys will frequently encounter a mark that is the same or very similar to the mark being searched but that is not registered with the US Patent and Trademark Office. It is important to recognize that even though a mark owner has not registered or applied for a mark with the USPTO, that owner may still have common law rights to a trademark. Common law trademark rights, while not nearly as powerful as a federally registered trademark, will confer certain rights and will carve out limitations should another owner ultimately register the same or similar mark with the USPTO.
What are Common Law Rights?
An owner may establish rights in a mark without registering the mark, simply by using it in connection with a business or product. These rights are called common law rights, and they provide an owner with the exclusive right to use a mark within a certain geographic area based on their priority use of the mark. When a trademark owner is the first to use a mark, they are referred to as the “senior user.” Anyone who starts using a confusingly similar mark thereafter is called the “junior user.” A senior user of a common law trademark can sue a junior user if the junior user is operating in the same geographic area and using the mark in connection with the same or related goods and/or services.
A junior common law user may be able to use a similar mark for related goods or services as a senior user as long as: (1) the mark is used outside of the senior’s user’s geographical area (taking into consideration any natural zone of expansion), and (2) the junior common law user adopted the mark without knowledge of the existence of the senior user. The natural zone of expansion doctrine allows a senior user to expand their business to other geographical areas that the user would reasonably be expected to enter. For example, if a junior common law user starts using a mark in New York and is unaware of a senior common law user in California, this would be acceptable trademark use. However, if the junior common law user starts using the mark in Arizona, the junior user may run into an issue of trademark infringement if the California-based senior user had already planned to expand the operations to Arizona.
Common Law User v. Federal Registrant
Just as a senior user has priority rights over a junior common law user, a senior user can prevent a registered trademark owner from using a confusingly similar mark where the senior user conducts business. When a trademark owner registers a mark with the USPTO, the owner’s registration becomes prima facie evidence of nationwide mark ownership. A senior user can rebut this presumption by showing that (1) the mark was in use prior to the registrant’s filing date, and (2) the senior user acquired common law rights by using the mark before anyone else in that geographic area. As long as the senior user 1) started to sell the goods or services under the mark before the registered trademark owner did, 2) has continuously used the mark, and 3) can prove that the mark is valid, the senior user can preclude the registered trademark owner from using the mark in the geographic area where the business operates.
There’s a bit of a misconception when it comes to marks that have attained “incontestable” status. A trademark owner’s registration can become incontestable after five years of registration. Filing for incontestability boosts the evidentiary value of a trademark registration since registration is conclusive evidence that a trademark owner exclusively owns a valid mark in the US. Although incontestability can provide some protection for trademark owners (e.g., incontestable marks cannot be challenged on the grounds that they are descriptive), it’s not an absolute shield. Section 15 of the Trademark Act provides that incontestability is subject to any senior user’s common law rights. Thus, an incontestable registration can still be subject to an injunction by a prior user.
Conclusion
While registering a trademark with the USPTO confers significant benefits to a trademark owner, unregistered trademarks can still provide some degree of protection. Trademark attorneys must consider common law rights when conducting a trademark clearance search. If a common law user is using a mark in one state or different parts of the US, make sure to warn your client of how this may affect your client’s registration.