How do Trademarks Work?

Trademarks are granted legal protection under common law and federal law to allow consumers to quickly identify the source of products or services.


How Trademarks Work


Trademark law developed to protect consumers, not trademark owners. Competitors of Pepsi or Coca-Cola cannot use those brand names to sell cola because consumers would have no idea whether they are buying authentic Coke or Pepsi products or if they are buying a knock-off product. Imagine a world where every cola company could sell products called COKE or PEPSI? It would be chaos! The purpose of trademark law is to prevent consumer confusion.


Even though the purpose of trademark law is to protect consumers, companies are responsible for enforcing their trademark rights. It is not the role of the government to enforce trademark rights through criminal law. Trademark owners must police their trademark rights, and if they fail to do so, they risk losing their trademark rights altogether.


A company should enforce their trademark rights if it believes the use of a trademark by third party causes or is likely to cause consumer confusion with one of the company’s trademarks.


For example, If a company not affiliated with PepsiCo. began selling a product called PEPSI SODA, it is the responsibility of PepsiCo. to stop them from using that name by asking them to stop, sending a cease and desist letter, or sueing them for trademark infringement in federal court.


Companies, individuals or entrepreneurs developing a company or product name, or a new brand should conduct trademark clearance searches to confirm they will not be infringing on someone’s trademark rights. Too common a business will become attached to a new name or brand only to find out later they are infringing someone else’s trademark rights.


Federal vs. Common Law Trademark Rights


Judges developed common law trademark rights by allowing businesses to sue third parties for using trademarks that were so similar to the business’s trademarks, they were likely to confuse the public about who is offering a product or service for sale.


By using a trademark, companies automatically acquire common law trademark rights. Common law trademark rights are limited in scope compared to the rights that are given to owners of a federal trademark registration granted by the United States Patent and Trademark Office (USPTO).


Since the 1940s, the United States developed a federal trademark system based on the Lanham Act and subsequent updates. The Lanham Act created the federal trademark registration system, harmonized much of common law trademark rights across the country, and more.


A federal trademark registration gives the trademark owner additional benefits not granted at common law including:


  • Trademark protection across the United States;

  • Right to use the trademark exclusively;

  • Presumption of trademark ownership and validity;

  • Additional licensing and franchising opportunities;

  • Allowed to use the ®-symbol; and

  • Several important and additional benefits.


Do you have any questions about trademarks and trademark rights? Do you want to enforce your trademark rights or believe someone is unfairly enforcing trademark rights against you? Do you want a trademark registration? If you have any trademark questions, contact us today for a Free Trademark Consultation and one of our attorneys will contact you within twenty-four hours.


 The USPTO issues a trademark registration certificate for all trademark registrations


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