Trademark registration should be a top priority in your business setup to-do list.
Once you create your company, what should you take care of next?
You might jump into the business right away: market your company and advertise your products/services, take and deliver orders, and so forth.
There is, however, one very important thing you need to do beforehand.
To position yourself on the market, you should differentiate yourself from your competition. Shortly speaking, you need to be somehow unique.
This is where a trademark (for goods) or service mark (for services) comes in handy. It identifies your goods/services on the market. Your trademark, specifically, signifies to your customers the source of your goods/services. For best result, your trademark should distinctively differ from others.
As you develop your business, your trademark can grow into a brand that is well-known. It consequently turns into your valuable intellectual property.
Having selected your trademark, protect it.
It’s highly tempting just to start using a certain trade name and hope that no one else picks it too. What adds some comfort is knowing that, since you use it, this name is under protection of the common law. Indeed, the U.S. common law protects those who use trade or service marks.
Yet, there’s a catch. The common law protection is very limited, particularly in terms of legal means. It may, for example, be practically hard, if possible at all, to prove that you have a priority to use your trademark vis-a-vis others. In such a case, you risk loosing your trademark to your competitor.
That’s exactly why you need to register your trademark. Registered trademark gives you priority over others to use it.
Having realized the importance of trademark registration, prepare for it.
Before you apply to register your trademark, though, make sure to conduct a trademark search. Such a bit of due diligence can save you plenty of time and money as well as foster your trademark rights. Search-less application can easily turn out to be useless.
Like with registration, timing is key here. The earlier you search for your desired trademark, the better. Once you find a confusingly similar mark already registered, consider dropping it and coming up with another instead. Otherwise, you run the risk of a trademark registration denial.
The more comprehensive your trademark search is, the less is the denial risk. Thus, pre-registration search is crucial.
Having successfully completed a trademark search, go ahead to register your trademark. You can register a trademark in the name of your company, be it an LLC or corporation, for instance.
The registration essentially denotes that you – directly or via your company – own your trademark. The registration hence puts all people on constructive notice of your trademark ownership. That is everyone can check the public register and see whether a certain mark already belongs to someone.
By the way, the trademark search and registration are among the 27 actionable steps in our business setup checklist (infographic).
The next question is which registration to pursue.
Federal vs. State
There are basically two types of trademark registration: federal and state.
The federal registration is conducted by the United States Patent and Trademark Office (USPTO). The state registration is run by the state trademark registration department (for example, the New York State Department of State Division of Corporations, State Records and Uniform Commercial Code).
Each type of registration has its own advantages and shortcomings. In a nutshell, the federal registration protects way more, but is costlier and longer, than the state registration.
The federal registration covers all of the United States, while the state one only a certain state. Differently put, federal registration creates a public record of nationwide use, while the state registration a record of statewide use. Notably, the state registration can actually cover much less than a state territory, according to some court rulings.
Among the advantages of federal registration is that you can prevent infringing products (i.e., those bearing the same or confusingly similar trademark) from being imported into the U.S. Another benefit is that you can file a trademark infringement suit in federal court. One more advantage is that you can declare your intent to use a trademark before you actually use it.
In view of this, your top priority should be the federal registration. The state registration should be your last resort. If the USPTO rejects your trademark application for a valid reason, for instance, you can try at least to register your mark in the state/s where you conduct your business.
Accordingly, if federal registration of trade/service mark is viable, the state registration can be just a waste of time and money.
The federal registration filing fee amounts to $225-400 per each class of goods/services, depending on the filing mode. In contrast, the state registration filing fee amounts to $50-75 per class of goods/services, depending on the state.
Federal registration may take from several months to a year or even few. State registration, on the other hand, normally runs much faster.
Trademark registration brings special symbols. Federal registration, in particular, allows you to use the world-known symbol ®. State registration, however, does not allow for this symbol.
How about SM vs. TM?
Before your mark is registered, you can put TM for trademark or SM for service mark. You can actually do this once you assert your rights to a mark, regardless of filing a trademark application. All those symbols should be in the upper right-hand corner of your mark.
To conclude, while you can do without TM, SM, and ®, having them – particularly the latter one – makes you a great deal better off. So, make sure to register your trademark as soon as possible.
Alongside, remember to complete other important business setup actions, for example, to get an EIN number.
Your trademark and EIN are just two pieces of your incorporation puzzle. To get the big picture, check out how to incorporate your startup in the U.S.
For an ultimate guide on how to open your business in the U.S., see our webinar (in Russian langauge).
If you have any questions about how to register your trademark, feel free to contact us.
Enjoy your trademark benefits!