The general rule is the first user of a trademark has prior trademark rights over any subsequent user of the trademark in the geographic area the owner used the trademark. In addition, a trademark owner is presumed to have trademark priority over any subsequent users from the date a federal trademark application is filed.
Trademark Priority and Why it is Important
Trademark priority is a core concept in trademark law that determines who owns a trademark and who can prevent others from using the same or a confusingly similar trademark. Basically, disputes regarding trademark priority are determining who called “dibs” on the trademark first.
Calling "dibs" is not enough to claim the exclusive right to use a trademark.
The first person or entity to use a trademark is called a “prior user.” Prior users can stop any “subsequent users” from using the same or a similar trademark anywhere the prior user can establish trademark priority. Trademark owners can establish priority through common law or by a trademark registration.
Common Law Trademark Priority
The most common way to establish trademark priority is by using a mark to sell goods or services. The first date a mark is used in commerce establishes trademark priority. However, common law trademark rights only establish trademark priority in the geographic area the owner of the trademark used it in.
As a company expands where a trademark is used, their trademark rights will also expand to those geographic regions. However, a trademark owner can only use the date a trademark was first used in a region to establish trademark priority over subsequent users of a trademark.
For example, a prior user of the trademark for ACME in New England cannot stop a subsequent company from adopting the ACME mark in Arizona based on common law trademark rights alone. It does not matter if the New England company used the ACME mark for twenty years in New England before a later company adopted and used the ACME mark in Arizona (unless the New England company was known in Arizona).
Additionally, the New England company cannot use ACME in Arizona because it does not have trademark priority in Arizona. Even though the New England company used the ACME trademark first, it is a subsequent user in the Arizona market.
The best way to secure trademark rights in the whole country is to file a trademark application with United States Patent and Trademark Office (USPTO).
Federal Trademark Registration on Trademark Priority
Relying on common law rights to establish trademark priority can be risky because common law rights only extend to where the trademark is being used. For companies hoping to expand beyond their current geographic region, relying on common law trademark rights is a mistake. To establish nationwide trademark priority, it is best to file a trademark application.
Section 7(c) of the Lanham Act states that once a trademark is registered, the trademark owner is presumed to have trademark priority from the application filing date nationwide. It does not matter if the owner filed the trademark application based on “Use in Commerce” or an “Intent to Use” filing basis.
The owner of a registered trademark can establish trademark priority over any entity that uses or applies for their trademark or a similar mark anytime after the application filing date. However, the trademark owner may be able to establish an earlier priority date in some regions based on their previously established common law trademark rights.
Can a Federal Registration Trump a Prior Users Common Law Rights?
Just because a company obtains a trademark registration does not mean they can claim trademark priority over anyone. A federally registered trademark cannot win a trademark priority case over a company with established common law trademark rights in any given geographic region.
Revisiting the ACME example above, if the New England company filed for a trademark registration for ACME, they still cannot claim trademark priority in Arizona. Why? Because the Arizona company established common law rights to the ACME mark in Arizona before the New England company’s trademark application filing date. In this hypothetical, the New England company would be given trademark rights throughout the country except in the Arizona market.
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