I can’t afford Federal Trademark registration. What should I do?

Every so often, I have potential clients in a situation similar to a business owner couple that came to see with me last week; they have a logo or a word or a phrase which they use as a trademark and have actually used it in commerce but, for whatever reason, they cannot yet afford to hire a lawyer to file for Federal trademark registration with the U.S. Patent and Trademark Office, which can usually involve at least several hundred or more in attorney’s fees and another few hundred just for the filing fees.   It made me think that there are other small businesses and business owners who might be in the same boat and looking for temporary alternatives until they can put together enough funds to register their trademark.

There is no substitute for Federal trademark registration

First of all I want to be clear:  if you have a solid, protectable trademark that you have either started to use or soon intend to use in interstate commerce, there is really no substitute for obtaining Federal registration.  If your trade or service mark is critical to allowing your customers to identify and distinguishing your products and services, I strongly recommend somehow finding the money to consult with a trademark lawyer and file a well-prepared application with the USPTO.  Federal trademark registration, while not required, gives the trademark owner a number of protections, such as providing evidence of constructive use of the mark on a nationwide basis, the validity of your mark, its registration, ownership, and your exclusive right to use the mark.  In addition, Federal registration of your mark affords you the right to bring action in Federal court for trademark infringement, and recover lost profits, damages, costs, and possibly statutory damages against third-party infringers.

Is there an option other than Federal registration?

With all that in mind, there are some businesses and trademark owners for whom Federal registration isn’t all that important.  Perhaps they have a “weak” mark to begin with (which might prove difficult to get USPTO registration for), their business reach is strictly local, and they never anticipate having sales across state lines.

Fortunately for these business owners, most states offer some form of state trademark registration and all of them respect some form of “common law” trademark rights.  However, since I am not licensed to practice law in any other state, for purposes of this article, I will stick with Arizona trademark procedures.

Registering an Arizona trademark, aka “Guerrilla” registration

First off, you should understand that Arizona trademark registration (handled by the Secretary of State’s office) doesn’t give you a whole lot in terms of protection against infringement of your mark anywhere outside of the State.   However, it is inexpensive and, with the new online application system, relatively straightforward.   Currently, the Arizona SoS’ site is claiming a 2-3 week processing time, much better than the 9 months or more processing time for the USPTO.

What I do find worthwhile about Arizona registration is that it puts your trademark onto the public record for ten years (at which time it must be renewed).  By putting it into the public record, you at least improve your odds of the mark getting spotted by someone locally or in another state looking to use the same or similar name in connection with the same goods or services as you.   Being on the public record also enhances the odds that your trademark will come up as a “hit” if that person hires a professional trademark research firm.   In other words, by having your trademark in the public record in Arizona, it might help alert other third-parties that the name is already taken and therefore possibly serve as a deterrent to them deciding to use that same or a confusingly similar name.

Because the Arizona trademark registration system asks you for the date of your first use of the trademark, an Arizona registration will also contain this bit of information, which will help you at least make the argument that you were the first user of the trademark and, as such, should have superior rights to its use against those with the same or confusingly similar name–at least here in Arizona.

For those unscrupulous competitors and other third-parties who might deliberately use or attempt to trade off of your trademark and goodwill developed under it, registration of your trademark with the Arizona SoS helps establish that you asserted common law trademark rights in your trademark as of a certain date (hopefully before the conflicting use), a fact which can be in your favor in either a lawsuit for unfair competition here in Arizona’s state courts, or a Federal action under the Lanham Act, against the infringing party.

Although the Secretary of State’s trademark registration system is seemingly straightforward, some careful thought and planning should go into the actual description of the your trademark required during the process.  You will want a description that is crafted in a way to give your trademark the best chance of turning up as a “hit” by third-parties considering the same or similar name to yours, as well as the professional trademark search firms they sometimes hire.

Use the “TM” symbol

Aside from State registration, if you are using your trademark in commerce you always add the “TM” identifier to your trademark on all products, packaging,  marketing materials, and wherever else the trademark is used and do it consistently.  The TM stands for, you guessed it, “trademark” and basically says that although you don’t have Federal registration, that such registration is either pending or that you are at least asserting common law rights to the use of your the trademark.

If you are a business owner with a trademark you are using or planning to use in commerce locally, nationally, or internationally, our law firm can guide you development of a strong trademark, as well as offer legal counsel and representation on the best ways to protect the mark to maximize its value.  Many of our trademark legal services, including registration, are handled for a flat or fixed fee, which helps give our business clients some degree of certainty and budget for their legal costs appropriately.

Ben Bhandhusavee is the Managing Attorney for BhandLaw, PLLC, a Phoenix business and technology law firm working with start-up companies, creative intellectual property matters, and complex corporate M&A and technology transactions.  Ben can be reached at (602) 678-2970 or by e-mail at bbhand@bhandlaw.com