I have been discussing what happens when you wait too long to register a federal trademark on your company’s name. (See Article 1 and Article 2 for the scenarios in which no one yet has a registered trademark.) We’ve been using the example of Alex, owner of Dynamic Drivers in Virginia. Now what happens if Alex, who started his company several years ago, finds that another Dynamic Drivers started up in Maryland just a few months ago, and the owner of THAT company has already applied to register the name at the US Trademark Office.
Trademark Law And Contesting A Trademark Application
As I mentioned previously, trademark rights generally accrue to the first entity to use the mark in commerce. Alex has clearly been using the mark long before the Maryland Dynamic Drivers, so can the MD company actually get the trademark issued?
You bet they can, and that would put a damper on Alex’s expansion plans a-plenty! The Trademark Office checks to make sure that no conflicting mark has been registered or applied for at the US Trademark Office only! Because Alex has no registration or application in, the Trademark Office won’t know about this company, so (provided no other company has registered the name), they are likely to award a certificate of registration to the MD company if the process proceeds.
But that does not mean Alex has totally lost out. Now that Alex knows about that trademark application by the MD company, he can contest it. Of course he will have to pay a lot more in filing fees and lawyer fees than he would have done if he had registered the mark as soon as he started the company. And to be honest, Alex is facing an uphill battle to stop the MD company’s application.
Alex will have to go to the Trademark Trial and Appeal Board (TTAB) to contest the application, and he will have to show that his first use predate the MD company’s first use of the mark, and he will have to show that his use has been prior to and continuous in the geographical area where the MD company started using the mark.
Whew, that’s a lot to prove! So what’s the result of all of this?
Trademark Practicalities vs Trademark Technicalities
Well, technically, Alex might win a court fight and be able to make the MD company stop using the name Dynamic Drivers. My hypothetical Alex does already have some customers in MD that will help his case. But the suit will cost so much that his small company is not likely to afford the fight. So Alex will have limited options. He can give in and change the name of his company…but oh that will hurt! He can ignore the problem and try to expand elsewhere outside his enclave in Northern Virginia (not into MD), and hope that the MD company does not come after him. (But see my description of the Burger King case in Article 2 for what bad can happen to Alex even then.) Or he can be aggressive and push on with his expansion plans into MD, in which case the MD company is even more likely to haul him into “trademark court.”
Bottom line is this: Although the first-to-use has the legal right to exclusive use of a mark, practically it’s the first-to-file that usually wins a trademark ownership standoff. Because the cost to fight someone who has already filed a trademark application can be so high that technical rights don’t matter. So…file your application early!
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