The Three Trademark Systems

Hi! Earlier today, I got a question from a client and we got into a deep discussion about protecting his brand. And what made it complex and confusing was a concept that I find confuses a lot of people who want to use a brand or protect it. So, here’s what’s confusing — There’s actually not one Trademark System. There are three Trademark Systems, and that’s just here in the U.S. 

Let’s briefly discuss what those three systems are, and then I want to give you an example to help explain how they work together. So, the three Trademark Systems are: (1) The Federal Trademark System, (2) The State Federal Trademark System; there’s actually one for each state (there are 50) and (3) Common Law. 

For the Federal Trademark System, that involves the United States Trademark Office, which is part of the United States Patent and Trademark Office. 

The State Trademark Systems are usually managed by the secretaries of Commerce in each state. 

Common Law is a function of how you actually use a mark. 

Let’s say that you’re in a state, just say this represents the state that you’re in. And you’re using the mark in a particular city in your state. You’ve been advertising and conducting business, maybe you have a storefront, and somebody comes up with the concept of using that same brand name or logo. Let’s pretend that they’re in the State of Washington — by the way, the large rectangle represents the United States, conceptually. If they fall for a Federal Trademark Registration and you don’t, they not only get Priority Rights and Superior Rights throughout the United States, they actually get them within your state as well. So, let’s say that this is, I don’t know, Miami, Florida and somebody from Spokane registers a mark throughout The United States with a federal Registration, then their rights cover not only areas outside of Florida, they actually cover areas within Florida, you know, whether it’s Jacksonville, Orlando, or Tampa, St. Petersburg, you know, they’re all covered. Then, you in your business down in Miami will run into Trademark Infringement issues if you try to grow outside of that area. 

Another example that gets a little bit more complex and is, you know, less common, is when I see two or three or four different groups of businesses starting to use a similar name or logo. So, let’s go back and say, this is your state again and you start using the mark in your particular metro area, then another state has someone in it; and they say, “You know, I wanna start using a brand in my own area.” Say, this is Tennessee and that’s Nashville. Both of you can use your marks without causing confusion of the consumers in your own metro areas because people in Nashville aren’t going to believe that the business in Florida is related to the one in Nashville. The person in Nashville then may file for even a state registration because they want to do business in Memphis, and they want to do business in Chattanooga, so their State Registration locks in the State of Tennessee for them. Again, it’s not interfering in any rights to use a mark in Florida. 

Now, let’s throw in our friend in Washington, who comes in and files for a Federal Registration; and all of a sudden, this Federal Registration stops the business in Nashville, who has protection in Tennessee from expanding outside of the State of Tennessee. And the person — your business, I believe in Miami, all of a sudden, not only can you not grow outside of the Miami Metro area, you’re even limited to not even growing within the State of Florida itself. So, this is a more complex example to make the point that Federal Registration is Supreme, but first in line, establishes rights as well.