Registering Your Company Trademark: Benefits of Federal vs. State

headshot_Will-WraysmallBy Will Wray | A trademark is a word, name, symbol, design, or any combination of one of those that is used by a person to identify goods made or sold by him or her, and to distinguish them from goods made or sold by others.

It’s important for business owners to register and defend their trademarks so they can protect the goodwill they have curried with customers and enhance their intellectual property portfolio.

Many know that the federal government has a trademark system in place, but do not know that most states also have their own trademark systems. A federally-registered trademark is superior to state-registered trademarks in most instances, but not all business owners can or want to obtain a federal trademark.

This post provides a brief overview of why businesses would consider registering their marks in a state trademark system. I use the Rhode Island trademark system as an example. It’s not identical to the state systems in place elsewhere.

How it works in Rhode Island

In order to apply for a trademark in Rhode Island, you have to identify the applicant, the goods and services that you plan to offer in connection with the mark, and identify the dates when the mark was first used, as well as other items. The application fee is $50.00.

As with the federal trademark system, you cannot register a trademark that is confusingly similar to another registered trademark “previously used in the state by another and not abandoned.”

Successful applicants receive a certificate of registration–this could be used in court to prove that you own the trademark in the state, and will constitute “constructive notice of the registrant’s claim of ownership … .” The registration lasts for 10 years.

Those who infringe on a registered mark “shall be liable to a civil action by the owner” for profits derived from the use of the infringing mark and “all damages” suffered by reason of the infringement. The infringing party may also be liable for lost profits if the infringement was intentional. Further, the court could enjoin the infringing party from further use of the mark and order that counterfeits or imitations be delivered to the court, the mark owner, or destined for destruction.

Why seek state and not federal protection?

The federal trademark system provides most (and perhaps all) of the same protections and privileges as a state trademark. It also provides additional protections that Rhode Island’s system (for example) does not provide. Why would one consider the state trademark system?

One benefit of the state trademark system is that the process of registering and obtaining a trademark on the state level is much cheaper. The application fee for a Rhode Island trademark is $50, whereas a federal trademark application ranges from $225 – $325. Because the cost is so low, businesses may opt to begin building their intellectual property portfolio where they are geographically based (such as Rhode Island or Massachusetts) and then seek federal trademark protection as they grow and expand.

Further, to obtain a federal trademark, one must be able to show the use of the mark in interstate commerce. Some businesses can’t do so, or might not meet some of the other application requirements of the federal system.

Another benefit of a state trademark system may be that certain products are legal on the state level, but not the federal level. As such, marks that could not be registered with the United States system might make it onto the state register.

Finally, your state application may be approved in a much shorter time period than a federal application. Depending on factors you cannot control, the U.S. Patent and Trademark Office could take more than a year to finally review, approve, and reflect the award of a trademark.

In sum, while federal trademark protection is the best choice for many entities most of the time, registration on a state trademark system may have benefits in the short-term or in specialized situations.

For more info, contact Will Wray at wwray@duffysweeney.com.