Difference between a Trademark and a Service Mark

Tradmark_or_ServicemarkTrademarks are used to identify a source of goods. Service marks are used to identify a source of services.

If your business provides services to customers, then the names, logos, and other marks used to provide services are considered service marks. For example, when you goto a Marriott hotel, the Marriott mark is being used as a service mark related to the hotel services (e.g. providing hotel rooms for customers). When you rent a hotel room goods are not necessarily sold, instead the service of a place to stay is provided.

If your business sells goods to customers then your names, logos and other marks used to provide goods are considered trademarks. The Coca-Cola mark is being used as a trademark when it is used to sale beverages.

If your business provides goods and services to customers then your business name and logo may be considered both a trademark and a service mark. If you goto Starbucks and purchase a coffee and then sit down in the coffee shop to drink it, the Starbucks mark is being used as a trademark and as a service mark. The Starbucks mark is used as a service mark because Starbucks is providing you with retail store services by providing a coffee shop location where you can purchase and consume their coffee. The Starbucks mark is also used as a trademark because Starbucks is selling you the actual goods of coffee, which you consume.

You can use “TM” in superscript next to your trademarks and you can use “SM” in superscript next to your service marks. If you have a mark that is both a trademark and a service mark, TM is commonly used , but either TM or SM can be used. If your mark is registered, you can use the circle R – (R) – in superscript next to the mark when using the mark with the goods or services listed in the registration.

Often the term trademark used to refer to both trademarks and service marks. The distinction between a trademark and a service mark is important when selecting the proper trademark/service mark class in a federal trademark application.

Registration Priority: I Have Many Trademarks, Which Should I Register First?

CircleR_RegisteredTMBusinesses often have many trademarks, such as, the business name, product names, service names, logos, slogans, tag lines, etc. The question arises which of those trademarks should be registered and what is the priority order for registering of those trademarks? Trademark registration carries a cost. Therefore, the decision to register is a balancing between the importance of the trademark and the cost of obtaining a trademark registration, when allocating a limited budget for trademark registration. Assuming other factors are equal, the question you should ask with respect to each of your trademarks is: how important is this trademark to my business as compared to other trademarks of my business?

Below is an example priority order for registering trademarks (e.g. a registration priority). The list is a generalized example and your circumstances may indicate a different priority order is appropriate for you. The following list assumes that each trademark is equally registerable and protectable. However, this is not always the case because some trademarks are weak and some trademarks may conflict another party’s trademark. Therefore, sometimes the weak nature of a mark, or its conflict with another mark, or other factors will reduce the trademark’s registration priority or remove the trademark from the possibility of registration or protection.

1. Business Name
Generally the most important trademark a business has is the business name with which the business uses to sell it goods or services. Because your business name is used with all of the goods and services you provide, your business name may be the most important trademark that your business owns. If that’s the case, then seeking a federal trademark registration on your business name may be the first priority. However some businesses do not use their business name when selling, rendering service, or interacting with customers, suppliers or others, in which case a trademark registration on the business name may not have a high priority. Instead product names, service names, or taglines, may have a higher priority.

2. Products and Service Names
Following business names, product and service names tend to be the second most important in a business. Product and service names are those that the customers deal with directly when purchasing your goods or services. Some businesses have many different products and services, so it may be necessary to prioritize which product and/or service names should be registered. You may use whatever measures your business uses to evaluate the importance of a particular product, service, or line of products or services. Some factors which may indicate an importance are: (1) the volume of unit sales of a given product or service, (2) the gross revenue or a net profit realized from the sales of a given product or service, (3) the amount of advertising and marketing dollars allocated or spent for a particular product or service, (4) the amount of customer or media recognition received for a particular product or service, and/or (5) the technological features of a particular product or service that provide advantage over the competition. The bottom line is that it’s a business decision on evaluating the importance of a particular mark.

3. Taglines and Slogans
Taglines and slogans can function as a trademark to identify a source of goods or services. Therefore a trademark registration can be sought for them. Certainly there are cases where slogans are very important to the owner. However when starting out, slogans probably have a priority that is lower than a company name and the company’s product and service names. Therefore seeking a trademark registration over a tagline or slogan may be prioritized behind registering a business name and important product and service names. However in some cases the tagline or slogan will be as important as the business name.

4. Logos
Logos or graphical elements may be used with a business name, with a product or service name, or with taglines or slogans. Again it depends on how important your logo is to your business. See this article for more on deciding whether to include a logo in your trademark application.

The priority order listed above is generalized. Individual business circumstances will help rank the appropriate priority order of trademark registration for your business. The question that should be asked is: how important is this trademark to my business as compared to other trademarks of my business? Once you have ranked each trademark based on an answer to that question and considered other factors such as trademark strength and trademark conflict, you have an example priority order from which you can make trademark registration decisions. Then you can place that priority order against the funds available for trademark protection to determine how many registrations to seek when allocating a limited budget for trademark registrations.

Should I Claim Color In My Trademark Application?

FedExIf your trademark or logo includes color, then you may wonder whether your federal trademark application should include a claim of color. If this is your first trademark application, then likely you should not make a claim for color. When no claim of color is made and the trademark is presented in black and white then the registration is presumed to cover the mark when presented in any color.

However, if color in your mark is very important so that you would want the best chance of stopping others using your color scheme with different words/characters, then you may want to make a claim for color in your trademark. For example, Federal Express has a trademark application and various registrations on the mark FedEx with “Fed” claimed in purple and the “Ex” claimed in orange. Therefore, it might be possible for FedEx to claim that the use of “LadFx” infringes its trademark, if LadFx was presented in the same color scheme where “Lad” was in purple and “Fx” was in orange. This claim is not guaranteed, but FedEx would have a better chance if they have a registration claiming color, than if they did not.

However, these registrations claiming color where not the first trademark registrations that Federal Express filed. Instead, one of Federal Express’ first trademark registration, filed in 1984, did not make any claim for color. This registration from 1984 provides a standard character claim to “FEDEX,” alone without any claims to style or color. Standard character marks cover the words/characters presented in any font stylistic arrangement or color. Therefore standard character marks can be considered broader than special form marks claiming style elements, logos, or color.

If you look at other brands you’ll find the same pattern. When a company files a trademark application claiming color, often this is not their first application. Many times the company first files a trademark application claiming only standard characters or a logo without color and then later they file a subsequent trademark application(s) claiming color:

  1. Startbucks, first standard characters, later a color logo;
  2. Google, first standard characters, later claims of color;
  3. Subway, first standard characters, later claims of color;
  4. Apple logo, first the logo with no claim of color, later claims over apple logo with horizontal color stripes.

MSNBC filed a trademark application claiming standard character mark on the same day that it also filed a separate application claiming color (Why companies have multiple trademark registrations on the same mark?).

According to a search of the USPTO records, other brands have not bothered to claim color in trademark registrations on their names, such as, T-Mobile, IBM, and Harley-Davidson Motorcycles.

Generally the words / standard characters of the mark are more distinctive (if the words / standard characters are not distinctive, consider combining the words with style or logo elements as a special form mark). So the words/characters of the mark tend to be more important than the color elements of the mark. Therefore, for your first federal trademark application you should probably not make a claim for color, unless color is very important. And if color is very important, you may want to consider filing two applications, one as standard character and one claiming color.

What is a Trademark: Usual and Exotic

CircleR_RegisteredTMA trademark includes almost anything that is used by a person or entity to identify a product or service. This includes product names, company names, logos, slogans, service names, slogans, taglines, colors, product packaging, product shapes, symbols, sounds, fragrances, flavors, and domain names. A trademark functions to identify and distinguish goods and services from those manufactured, sold, or provided by others and to indicate the source of the goods or services, even if the source is unknown. Trademark registrations can be renewed forever as long as they are being used with the corresponding goods or services in commerce.

Below are several types of trademarks. First are the standards word and logo marks and the more exotic marks like sounds, product shape, and fragrance, among others, follow. Click here to skip straight to the exotic stuff.

Standard Character
A standard character mark is one where the mark has word(s), letter(s), and/or number(s) with no design element and no claim to any particular font, style, size, or color. The character(s) of the mark must appear in the Trademark Office’s standard character set. The character(s) or word(s) of the mark are provided in standard text without any style, font, or graphics. For example, U.S. Trademark Reg. No. 1,452,359, is for the mark “STARBUCKS” as a standard character mark. A standard character mark is sometimes known as a word mark.

Special Form
Special form marks cover marks presented in a variety of ways and make a claim to the stylistic elements included with the mark. Below are a few examples.

IBMLogo1Mark with a Particular Font or Stylized Text
This type of mark does not have a logo outside of the styling/font of the text of the mark. IBM’s U.S. Trademark Registration No. 1205090 is an example where the mark “IBM” is represented in the now widely recognized horizontally striped style.

NikeSwooshLogo Mark Alone
This type of mark has no standard characters in it. Nike’s U.S. Trademark Reg. No. 1,232,243 is an example of the Nike “swoosh” logo mark that has been registered alone without any standard characters.

Logo with Adjacent Text
NikeSwooshWordsThis type of mark has standard characters adjacent to the logo. Nike’s U.S. Trademark Reg. No. 1,325,938 is an example where the word “NIKE” is combined in the registration and adjacent to the swoosh logo. However, the combined adjacent elements must present a unitary commercial impression, which this mark does.

StarbucksLogoLogo Mark with Embedded Text
This type of mark has standard characters embedded in the logo. Starbucks’ U.S. Trademark Reg. No. 1,815,937 is an example of a registration where the text “STARBUCKS COFFEE” is embedded in the Starbucks logo.

For factors to consider when determining whether to seek a trademark registration on a word mark or a logo mark, see this post.

Color as an element of the Mark
MobileColorClaimThis type of mark claims color as an element of the mark. Exxon Mobil’s U.S. Trademark Reg. No. 3,787,476 is an example of a registration where color is claimed as a feature of the “MOBIL” mark. In that registration, the letters M B I L are claimed in blue and O is claimed in red.

A sound or sounds can function as a trademark. Sound marks function as trademarks when they are arbitrary, unique, or distinctive and create in the hearer’s mind an association of the sound with a good or service. One example of a registered sound mark are the NBC chimes.  U.S. Trademark Reg.  No. 916,522 on the NBC chimes describes the mark as:

a sequence of chime-like musical notes which are in the key of C and sound the notes G, E, C, the “G” being the one just below middle C, the “E” the one just above middle C, and the “C” being middle C, thereby to identify applicant’s broadcasting service.

Below is a Youtube clip of the NBC Chimes.


Motorcycle Exhaust Sounds
HarleyDavidsonHarley Davidson attempted to obtain a trademark registration over the exhaust sound of its motorcycles in Trademark Application No. 74/485,223, but the application was ultimately denied by the Trademark Trial and Appeals Board.

DucatiItalian motorcycle manufacturer, Ducati, also attempted to obtain a trademark registration over the exhaust sound of its motorcycles in Trademark Application No. 76/330,675, but gave up on the application after an initial refusal by the Trademark Examining Attorney.  These cases do not mean that motorcycle exhaust sound could never be a registered trademark, but only that the exhaust sounds in these particular cases did not qualify or that the applicant did not pursue further appeals to contest the these rulings.

Owens Corning Corporation’s Pink Insulation

Color Marks
Color marks are mark that consist solely of one or more colors used on particular objects. Therefore a color mark is different from the “MOBILE” example above were color is claimed as an element of a special form mark. With a color mark for goods, the color can be used on the entire surface of the goods, on a portion of the goods, or be used on all or part of the product packaging. Similarly, service marks may consist of color used on all or part of materials used in the advertising and rendering of the services.

It is more difficult to show that color functions as a trademark as compared to other types of trademarks. This is because color cannot be inherently distinctive. Which means that an applicant must prove that the color has acquired distinctiveness such that customers associate the color with a single source of the goods or services.

The Owens Corning corporation owns U.S. Trademark Reg. No. 2,380,742 over the color pink as applied to building insulation.

Tm. Reg. No. 1,057,884

Trade Dress: Product Shapes and Product Packaging
The shape of a product and the packaging of a product or service can act as a trademark. When a product shape or product packaging functions as a trademark it is known as trade dress. One example of product packaging trade dress is the classic Coca Cola bottle shape. Coca Cola has a registered trademark (Trademark Reg. No. 1,057,884) over the shape of the classic Coca Cola bottle.

Tm. Reg. No. 3,457,218

An example of product design trade dress is the configuration of the iPhone being rectangular with rounded corners as shown in Trademark Reg. No. 3,457,218.

For a more detailed discussion of trade dress see this article.

Scent, Fragrance, or Flavor
It is possible to gain trademark protection over a scent, a fragrance, or a flavor as long as it is not functional. Scents that serve a functional purpose, such as perfume or air freshener, are not registrable. A showing that the scent, fragrance, or flavor has acquired distinctiveness must be made such that customers associate the scent, fragrance, or flavor with a single source of the goods or services. The showing is necessary because generally scent, fragrance, or flavor is seen as a functional characteristic of the goods/services by the public and not as a trademark. In other words, more evidence is needed of acquired distinctiveness with these types of marks than with distinctive word marks.

One example of a trademark registration over a scent is U.S. Trademark Reg. 2,463,044. In the ‘044 registration, an individual operating as Manhatten Oil has a registration on a cherry scent used with “synthetic lubricants for high performance racing and recreational vehicles.” This registrant has another registration on the supplemental register over a strawberry scent for “lubricants and motor fuels,” and this appears to be the commercial product.

A Placement Mark
NorthFaceShoulderWhen you see a logo on the right shoulder of the back exterior of a garment, even if you can’t make out the details of the logo, do you recognize that logo placement to be associated with North Face? If so, North Face may have developed trademark rights in the placement of any logo in that location. Yet, in 2008 the USPTO was not satisfied that North Face met the requirements for registered trademark protection over such logo placement.

North Face Apparel Corp. attempted to obtain a registration on the “placement of a stitched logo affixed to the right shoulder of the back exterior of [any] garment” in Trademark Application No. 78/622,759. North Face was seeking a trademark registration that would allow it to prevent others from placing of any stitched logo on the right shoulder of the back exterior of any garment.

In refusing the application, the Examining Attorney asserted that the placement mark did not function as a trademark and was merely ornamental. North face responded by noting that the USPTO has granted other placement marks. For example, Registration No. 2,058,448 consists of “the placement of a single stone in a center setting positioned at the bottom of the ring” and Registration No. 3,106,789 consists of “the placement of two iterations of a paw design on the bottom of a pet shoe.” (Both of these registrations are now expired because the applicants failed to renew them). Further, North Face argued that it was the only company that provided the placement of a logo on a right shoulder of the back exterior of apparel and that it had been doing so for 17 years. Therefore, North Face argued such placement is widely recognized as associated with North Face and deserved registered trademark protection.  The Trademark Examining Attorney maintained the refusal of the application and North Face later dropped its appeal to the Trademark Trial and Appeals Board.

Almost anything that indicates a source of goods or services can act as a trademark. Above are some examples of the various types of items that can achieve trademark protection.

What is Trade Dress?


Trade dress recognizes that product/service packaging or the product appearance itself can act as a source identifier in the same manner as more traditional trademarks, like names and logos. In other words, in some circumstances the product packaging or the product appearance can be so uniquely tied to one company or source of goods/services that the packaging or the product appearance indicates to the customer the source of the goods/services. Many times the trade dress of a product allows the consumer to recognize the source of that product from the product packaging or the product appearance alone without any brand or logo appearing with it.

Product and Service Packaging
One example of product packaging trade dress is the classic Coca Cola bottle shape. Coca Cola has a registered trademark (Tm. Reg. No. 1,057,884) over the shape of the classic Coca Cola bottle, as shown at the top of this post. The Coca Cola bottle shape has been used since 1916. Given the unique shape and Coca Cola’s long and exclusive use of this shape for packaging cola, the purchasing public has come to recognize the shape of that bottle as associated with Coca Cola, even if the Coca Cola name is not on the bottle. Product packaging can also cover traditional box package styling. However, aspects of a service “packaging” can also be protected, such as the appearance and decor of a restaurant.  This is not an exhaustive list, basically any packaging or “dressing” of a product or service might qualify as trade dress.

Tm. Reg. No. 2,511,360

Product Design
Trade dress rights can be generated in the design of the product itself, separate from the product packaging. Generally it takes a longer amount of time and/or more marketing efforts to generate trade dress rights in the shape of a product. One, somewhat controversial example of registered product design trade dress is that of the Navy Chair by Emeco Industries (Tm. Reg. No. 2,511,360). The Emeco Navy Chair is an example where a company has had a long period of use of the product shape. Emeco claims to have sold the Navy Chair since 1978.

An other example of product design trade dress is the configuration of the iPhone being rectangular with rounded corners as shown in Tm. Reg. No. 3,457,218 (“the ‘218 registration”). Apple used this design since 2007 and it was registered in 2008. This is a very short time for a product design to achieve trade dress protection. However the Trademark Office was convinced that the shape had become distinctive .

Tm. Reg. No. 3,457,218

In Apple’s application to register this trade dress, Apple claimed that the extensive media coverage of the launch of the iPhone, including front page coverage on national newspapers and lead stories on TV news broadcasts, amounted to about $400 million in free advertising. Further, Apple claimed 1 million iPhones were sold in the first 74 days after the product was launched. Apple cited leading trademark scholar Thomas McCarthy’s treatise McCarthy on Trademarks for the proposition that no minimum amount of time is necessary for a mark to achieve distinctiveness in the marketplace. Massive TV and print advertising campaign can promote a trademark or trade dress to distinctiveness within a matter of days or weeks in certain circumstances. Currently Microsoft is challenging the validity of this ‘218 registration at the trademark office.

Tm. Reg. No. 3,470,983

Apple has a second trade dress registration (Tm. Reg. No. 3,470,983, “the ‘983 registration”) that is more narrow in that it includes more elements than is shown in the ‘218 registration. The ‘983 registration includes color and various elements of the iPhone home screen, whereas the ‘218 registration claimed only the exterior shape of the product. In the Apple v. Samsung lawsuit, in response to Questions 12 and 15 of the Verdict form, the jury found that the trade dress of the ‘983 registration was valid and infringed by some of Samsung’s products.

Trade Dress and Patents
Patents traditionally protect product designs. However, in some cases the product design in not patented. In such cases, trade dress rights might be used to prevent copying of the product design. Therefore trade dress rights can sometimes be used as a quasi-substitute for patent protection. In other cases, when a patent exists over the product design at issue, both trade dress and patent rights might be asserted to prevent copying.

The packaging or the product itself can be protected under trademark law if such packaging or product becomes distinctive in the minds of the consumers so that it is associated with a single source (e.g. your company). Often it can take a period of time for such trade dress rights to develop. However, there is no set period of time, and recognition can be achieve in a short time depending on the extent to which customers have been exposed to the trade dress.

Use Based v. Intent-To-Use Trademark Applications

There are at least two types of federal trademark applications. The first is a use-based trademark application, also known as a section 1(a) application corresponding to the section of the law that authorizes the application. The second type is an intent-to-use application also known as a section 1(b) application.

A use-based application is one where the applicant is already using the mark in commerce at the time when the application for federal trademark registration is filed. Use of the Mark in commerce can include shipping or selling the goods with the mark or rendering services after advertising those services with the Mark.

Intent-to-Use Based
An intent-to-use application is one where the applicant has not used the mark in commerce or business at the time that the application is filed. The intent to use application allows the applicant to reserve a trademark that they intend to use before actually using it.

This allows the applicant to stake a claim to rights in a name (or other mark) while doing the work that is required to bring the product or service to market. Many preliminary matters such as purchasing supplies, designing logos, designing graphics, designing packaging, and so forth may need to be completed before the product or service can be put on the market. Such activities might require a substantial lead time between the time when the trademark is selected and the time when the products or services are provided. Therefore an intent to use application allows an applicant to reserve a mark so that they do not have a problem running into others who are attempting to register the same or similar name while there working on their product/service start up activities.

A use-based application is for those already using the mark and an intent-to-use application is for those who plan to but are not yet using the mark.

What Happens After A Federal Trademark Application is Filed?

TrademarkApplicationFiled-001Generally an applicant should not be too concerned with how long it takes to obtain a federal trademark registration at the United States Patent and Trademark Office. Once your trademark application is filed, later filed applications by others are less of a concern. Further, in the United States, trademark rights accrue based not only on registration but also on use. Therefore simply by using your trademark in commerce you can begin to generate common law rights which you can assert even before you obtain a registration. This article will explain the process and the general timing of events after an application is filed.

Trademark Office Approval Is No Guarantee of Freedom to Use Mark
Approval of a trademark application by the U.S. Patent & Trademark Office (USPTO) does not guarantee that the use of the mark is clear, e.g. that your use will not infringe another’s trademark rights. This is true because, as mentioned above, a trademark user can generate common law rights by use alone, and the USPTO will not search for common law trademark usages that are not registered. Only a comprehensive trademark search can reveal information sufficient to provide advice regarding whether your use of a mark is clear.

If you’re concerned about another filing a trademark application before you begin using your trademark, you can file an intent-to-use trademark application. After the intent to use application is filed, you can begin using your mark without waiting for the trademark registration to issue. In fact there is almost no trademark reason to wait, after an application is filed, for a trademark registration to issue before using your mark. This is true because the USPTO’s granting a registration, as provided above, is not a bulletproof clearance for you to use your Mark. In certain circumstances a court can reverse the trademark office’s decision to grant a trademark registration if a prior trademark user has superior rights. If you need clearance assurance you should have a comprehensive trademark search conducted.

Filing to First Office Action or Allowance
After your trademark application is filed you should expect to hear back from the trademark office whether there is an objection or refusal to your application or whether it will be allowed within three to six months. Current USPTO stats provide the average time to first office action (first response from the USPTO) or allowance after filing is about three months.

Refusal or Objection
If there is a refusal or objection the USPTO will provide that to you in writing in the form of a Office Action. The Office Action will explain the time period in which a response is required. Generally a six-month time frame from the date of the Office Action is allowed for filing a response. A response can be filed earlier.

Refusals or objections provided in an Office Action maybe due to relatively simple formalities, such as the USPTO requiring a change to the description of goods/services provided in the application. In other cases refusals are based on an allegation by the Trademark Examining Attorney that your mark conflicts with another prior registered mark. Refusals based on an alleged conflict with another mark tend to require more involved responses than those regarding application formality issues.

If you receive a refusal or a rejection, the time until you receive a registration, if you’re successful in overcoming the refusal or objection, depends on how long you wait to file a response and how long the Trademark Office takes to consider and reply to your response. Further, in some cases it may be necessary to reply to multiple Office Actions issued by the trademark office or occasionally to pursue an appeal, all of which take more time.

If the USPTO does not issue a rejection or refusal or if you are successful in overcoming a rejection or refusal, then the USPTO will take an action based on the type of trademark application you have filed (use v. intent-to-use). If you filed a section 1(a) use-based application for registration on the primary register, then the USPTO will provide you with a notice that they will publish the application for opposition. Once the application is published for opposition anyone who believes they would be damaged by you receiving a registration has the opportunity to object to your application by filing an opposition. If no opposition is filed then the US PTO will take one of two courses depending on the type of application that is filed.

Registration or Notice of Allowance
If the application is a used based section 1(a) application then the USPTO will issue a certificate of registration within a few months after the end of the 30 day opposition period, if no opposition is filed. If the application is a section 1(b) intent-to-use application, then the USPTO will issue a notice of allowance within a few months after the end of the 30 day opposition period. The applicant will be given six months after the notice of allowance to file a statement of use proving that they are using the trademark in commerce. Extensions of time can be requested in six-month increments if the applicant cannot file a statement of use showing use of the mark within six months after the notice of allowance.

Currently it takes on average 10 months for a typical use-based trademark application to register and for a intent-to-use application to receive a notice of allowance. Your application could take longer or less time depending on if there is a refusal or objection or if the USPTO processes your application at a quicker or slower rate than average.

Should I File for a State or Federal Trademark Registration?

FederalTrademark_vs_StateTrademarkNow that you determined that you need to seek a trademark registration. The next question is what type of registration should you seek: a registration from your state or registration from the federal government? The answer is the federal government in most cases and here’s why.

State trademark registrations cost less. The government fees for state registration depend on the state but tend to be less than a federal registration. For example, an Illinois state trademark application has a $10 registration fee. Whereas a federal trademark application at the United States Patent & Trademark Office has a fee in the range of $275 to $325 per class of goods/services declared in the application.

Geographic scope
The scope of protection provided by state trademark registration depends on the state, but does not extend outside of the boundaries of the state. In contrast, a federal registration provides protection throughout the entire nation. So, while state trademark applications cost less you also get less protection.

Conflict with Federally Registered Marks
One problem with relying on a state trademark registration is that the U.S. Patent and Trademark Office (USPTO) will not check state trademark databases when reviewing applications for a federal trademark registration. Therefore, your state trademark registration will not block a party from obtaining a federal trademark registration on a mark that is the same or similar to yours. If someone has obtained a federal registration before you file and obtain a state registration, their federal registration will trump your state registration. Even if you obtain your state registration before a third party obtains a federal registration, your rights may be limited by the existence of the federal registration. The bottom line is that a state registration will not provide much benefit in the case of a conflict with a federal application or registration.

Problems with State Trademarks: the case of Burger King v. Hoots
The case of Burger King of Florida Inc. v. Hoots, 403 F. 2d 904 (7th Cir. 1968), shows how a state trademark registration will not hold up against a federal trademark registration, even if the state registrant is the first to use the mark within the state. In that case, Burger King (the well-known chain) sued Gene and Betty Hoots for operating a restaurant in Mattoon, IL under the name Burger King.

Hoots started their Burger King restaurant in Mattoon in 1957 and in 1959 they received a state trademark registration from Illinois, without knowledge of plaintiff Burger Kings’ prior use of the same mark. The plaintiff Burger King started in Florida in 1953 and was operating 29 stores in multiple states by 1957. The plaintiff Burger King filed a federal trademark application in September 1958 and received its federal registration over the Burger King mark in 1961. In the same year Burger King opened a restaurant in Skokie Illinois and had knowledge of the Hoots Illinois trademark registration at the time. Burger king continued opening restaurants and had 50 Burger King restaurants in Illinois in 1967.

Basically Hoots was the first to use the Burger King mark in Illinois and was first to register the mark in the State of Illinois.

The court found that the Hoots’ rights to use the Burger King mark were limited to the common law right in the geographic market area about their operation in Mattoon (20 mile radius around the Mattoon location). The court found that federal trademark law trumped state trademark law and the state law could not expand Hoots common law rights. The state registration did not give Hoots the right to operate anywhere in Illinois because that was beyond the area where the Hoots actually used the mark.

Even though Hoots was first to use the mark in Illinois, their state trademark registration was essentially worthless against a federal trademark that was obtained after they started using the Burger King mark in Illinois. This case shows the weakness of state trademark registrations.

Local Businesses and the Internet
If your business is strictly local, you might be considering a state trademark registration. One such example of a strictly local business might be if you have a restaurant and you have no plans to create a chain of restaurants that extended outside of your state. Before the rise of the Internet, the approach of seeking only state trademark protection on strictly local business had more merit (however it still had the risks of conflict with Federal marks listed above).

But now virtually every business has a website that is accessible from anywhere in the world. Therefore if you have a strictly local business and people are searching for your business on the Internet, it’s possible that your business name or trademark will conflict with another business located in a different locale. In other words, the presence and searching on the Internet creates the possibility that strictly local businesses will run into trademark conflicts online that they wouldn’t otherwise encounter. Some search engines attempt to provide search results based on the searcher’s location, however relying on the search engine algorithms to protect your brand is not recommended.

Border issues
Businesses located near the border of their state can also run into problems. State trademark rights do not extend beyond the boundaries of the state. So, if your business is located close to the boundary of your state and another business starts up across the boundary in another state, but close by, your state trademark registration will not be effective to stop them.

State trademark registrations are generally inexpensive but provide few benefits. Therefore if you’re interested in protecting your brand you should consider filing a federal trademark application if your circumstances allow.

Trademark Application Problems: Wrong Owner Named

While the United States Patent and Trademark Office (USPTO) provides online forms that appear to make it easy to file a trademark application, there are several portions of the application that can trip up an inexperienced applicant. One of those areas is the owner portion. The USPTO requires that the correct owner of the trademark be specified in the application to register the trademark. This sounds easy but in many cases it is not, as will be shown below.

Individual and Partnership Owner Problems
Take the case of American Forests v. Barbara Sanders, 1999 TTAB LEXIS 529 (TTAB 1999). In this case, Barbara Sanders filed a trademark application to register LEAF RELEAF to be used with the goods of leaf bag equipment. The application named herself individually as the owner/applicant.

Later another company, American Forests, filed an opposition seeking to prevent Barbara Sanders from receiving a registration over LEAF RELEAF. American Forest alleged (1) that LEAF RELEAF was confusingly similar to its trademarks GLOBAL RELEAF and RELEAF and (2) that the application named Barbara Sanders as the applicant/owner but that Sanders did not have a bona fide intent to use the mark. The second issue is the focus of this article. During a deposition Barbara Sanders admitted that she intended to use the LEAF RELEAF, not by herself individually, but together with her husband. In other words she intended to sell products under the LEAF RELEAF together with her husband in a partnership and not on her own.

It is a general principle of law that when two or more people join together for the purpose of making a profit, they have formed a partnership. This can be true even if there is no written agreement between the two or more people. Further, Barbara Sanders used the word partnership to describe her and her husband’s affiliation regarding the products to be sold. Therefore, the proper applicant for the trademark application was the partnership comprised of Barbara Sanders and her husband.

Section 1 of the Trademark act requires that the application be filed in the name of the trademark owner. When the owner named on the application is not the person or entity that intends to use the mark or actually is using the mark, then the application is void and the registration will be refused. See also Trademark Manual of Examining Procedure § 803.06.

In the American Forests case, Barbara Sanders’ application was found to be void and Sanders lost the opposition and her application. The rule is rather strict. You see here even though Barbara Sanders was going to be using the mark (together with her husband), she was not the proper owner because it was actually a partnership between her and her husband that was legally recognized as intending to use the mark.

Start-up Owner Problems
Another situation where this issue arises is in start-ups. Often an entrepreneur will come up with a name for their company or product before the company (LLC or Corporation) is legally formed. Once a name is chosen early filing of an intent-to-use trademark application is encouraged so that someone else doesn’t file an application on the same or similar name and block you from using your name. However, if an entity is not yet formed, filing an application in the name of a non-existent entity is not a good idea. And, if the individual does not intend to sell products/services himself or herself before the legal entity is formed then, like in the American Forests case, the individual or individuals would not be proper applicants.

Who is the Owner?
A good question to ask to determine the owner is: who will receive revenue from the first sales? If it is a company, then the company should be the applicant. If the company is not formed, then it may be necessary to first have the company legally formed. Then a trademark application can be filed in the name of the company that will own, control, and realize revenue from the sale of products/services under the mark.

Exceptions for Minor Errors
Some exceptions exist that allow minor errors in the owner’s name to be corrected. However it is best to ensure the owner is properly named. You should contact a trademark attorney to determine whether errors in your case are correctable.

Circumstances of your company or start-up enterprise need to be considered in order to determine who should be named as the owner on a trademark application and whether other steps (e.g. forming the legal entity) are needed before a trademark application is filed.