In a previous post I discussed the ‘in use’ aspect related to a federal trademark registration, and how this ‘use’ has a relationship to actual ‘use in commerce’. But what if you don’t have (or don’t want to get) a federal registration - can a you still obtain rights?
Luckily the answer is ‘yes’! The acquisition of federal trademark rights under the Lanham Act (at least here in Texas, and more aptly the 5th Circuit) is established by use, not by registration. The State of Texas has a similar provision (“Trademark" means a word, name, symbol, or device, or any combination of those terms, used by a person to…”).
So just what are the benefits of going through the rigor of obtaining a Registration?
The USPTO lists a number of advantages for registering a mark on the Principal Register:
- constructive notice to the public of the registrant's claim of ownership of the mark;
- a legal presumption of the registrant's ownership of the mark and the registrant's exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration;
- the ability to bring an action concerning the mark in federal court;
- the use of the U.S registration as a basis to obtain registration in foreign countries; and
- the ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods.
But there are other strategic aspects to keep in mind.
First, while it is never a bad idea to expend resources on a comprehensive search (including federal, state, common law, internet domain, social media handle, etc.) and/or obtain a clearance and registrability opinion, these can be cost prohibitive to a new or small business. In the case of a low budget, it can be cost effective to just file a single registration application with the USPTO and see what an Examining Attorney thinks. The primary benefits of this approach include cost savings and giving notice of your intent to the public at large.
Second, while it can be important to have an ‘enforcement sword’ against purported infringers, it can be just as valuable to have a ‘shield’. That is, in the event you receive your registration (and keep it live), an Examining Attorney will now weigh any subsequent (and relevant) application against your registration. Any application that the Examining Attorney believes is too close to your registration will be rejected for ‘likelihood of confusion’. Instead of you having to expend time and energy chasing a junior user, the USPTO has done the work for you!
These aspects came to light in a recent Southern District trademark case, Viacom International Inc v. IJR Capital Investments, LLC.
A Krabby Day for Sponge Bob
According to documents in the Viacom case, Applicant IJR Capital Investments LLC (of Bellaire) liked the name ‘The Krusty Krab’ for a restaurant. In searching the internet for prior users, the Applicant found numerous links and hits referring to “The Krusty Krab”, a fictional fast food restaurant in the animated comedy TV series SpongeBob SquarePants (owned by Viacom), but nothing that stood out as to what a layman (or perhaps even its attorney) might consider being ‘use’ of a trademark.
The USPTO was also void of any live applications or registrations that would preclude registration. According to testimony, without seeing what was considered (in its eyes) to be a senior user, in December of 2014 the Applicant filed an application for registration of ‘THE KRUSTY KRAB’ trademark (or really, ‘servicemark’) for restaurant services.
Two events unfolded as a result of this filing: one, the Applicant gave an Examining Attorney an opportunity to weigh in, and two, the Applicant put the public on notice as to its intent. Because there were no previous registrations or applications to which the Applicant’s registration would be deemed as causing a likelihood of confusion against, the application was allowed.
During examination, Viacom got wind of the application and sent the Applicant a C&D.
Right at that very moment was where the ‘get out of trouble for FREE (or low cost)’ value could have been recognized, but in this instance the Applicant was steadfast and decided to continue on (can’t say for certain whether this was at or against the advice of counsel). This ultimately resulted in a lawsuit for trademark infringement by Viacom against the Applicant (a copy of the Original Complaint can be viewed by clicking here).
In the pre-trial phase of the case, Viacom was able to prove on summary judgment it had acquired rights in the mark ‘THE KRUSTY KRAB’, with the Court explaining its interesting evidentiary analysis as to how a fictitious name can acquire distinctiveness.
The Applicant got into a fight it probably didn’t want, but ultimately deserved. It could’ve got out simply by desisting and moving on to Plan B.
On the other hand, Viacom did itself its own disservice by not seeking a registration of ‘THE KRUSTY KRAB’ mark back in the day. It undoubtedly expended tens of thousands of dollars in fighting a matter it could have prevented by seeking cost-effective registration early on.
It is worth noting that less than one week after the Court ruling, Viacom filed three new trademark applications related to the THE KRUSTY KRAB mark:
87305451 KRUSTY KRAB
87305445 KRUSTY KRAB
87305436 KRUSTY KRAB
Better late than never!!
At Rao DeBoer Osterrieder, our goal is to help you understand aspects related to trademarks. If you have questions on what you need to do to acquire trademark rights, or enhance the right you already have, you can schedule an initial Q&A by accessing our consult page.
We look forward to speaking with you!
© 2017 John DeBoer
John DeBoer is a registered patent attorney, and admitted with the Texas State Bar. He is a Partner with Rao DeBoer Osterrieder, a law firm in Houston, Texas specializing in intellectual property law. Contact John via Email.
The views expressed in this article are those of the author and do not reflect the views of Rao DeBoer Osterrieder, PLLC, or any of its clients. All rights reserved.
 Union Nat'l Bank of Tex., Laredo v. Union Nat'l Bank of Tex., Austin, 909 F.2d 839, 842 (5th Cir.1990)
 Id., Docket No. 32, pgs. 6-8.