Trademark registration in the USA. 6 advantages for IT-business

The big goal of almost each startup is to enter the American IT market, isn`t it?

The goal is achieved. Lots of customers. Applause. What else is needed for happiness?

Register a trademark in the USA! Here is our friendly advice ☺.

This step is not obvious for everyone. The main function of a trademark is to identify your products/services and allow users to distinguish them from similar products/services. You can use your trademark without any “legitimization” of course, and trademark registration is your right.

However, let`s imagine a situation: you have spent the time and energy to create a unique brand, came up with an interesting catchy name, invested money for development, and started using the trademark. One “good” day you realized that another IT company that provides similar services has just copied the brand and uses YOUR trademark without worries.

You tried to reach the competitor’s conscience, but response was as follows: “We have already submitted an application for trademark registration in the USA! Ciao bambino, sorry»

Sounds bad, huh?

But the worst part is that if such a TM is registered, you will almost certainly lose the opportunity to register a trademark with the same name without uncontested evidence of earlier use.

We have told about the procedure and features of trademark registration in U.S. Patent and Trademark Office (USPTO) earlier. In this article we will explain why is it important not to miss this step while doing business in the American market, and what are the advantages of trademark registration  in the USA.

Advantage #1. Proof of trademark ownership.

What does it mean? Information on registered TM appears in the USPTO public database, and is available when searching for brand names. This will help other companies avoid using the same or similar names in their activities.

In addition, after filing an application for registration, the USPTO will suspend the registration process for confusingly similar trademarks, and after its official registration will refuse to register such trademarks.

Registration also provides official tools to counteract the unfair use of your TM by competitors.

For example, when filing a lawsuit in a federal court regarding unscrupulous provision of services under your registered TM by another entity, you have the right to demand compensation of statutory damages, and not to prove the amount of actual losses. In this case, the burden of proof is reduces which means you have a better chance of success.

This is a significant advantage, considering the fact that actual damages are often difficult to prove.

Thus, the registered trademark is primarily a way of preventive protection against potential infringements by unscrupulous competitors.

Advantage #2. Nationwide protection.

Since trademark registration in the USPTO takes place at the federal level, the exclusive right to sell products/services under this trademark is valid throughout the United States. What does it mean? You will be the only one in the whole country able to sell goods/provide services under this name.

A U.S trademark gives you protection against infringements in all 50 U.S. states. Even if you plan to carry out activities in one state only (hmm, the online business doesn`t have boundaries), you don`t have to worry about protecting your rights in other states when expanding your business with a registered TM.

Advantage #3. Registered TM is an important asset, which makes your business more attractive for investors.

Startups usually live on investment, but shhh, don’t tell anyone!

Registration of TM indicates seriousness of your intentions regarding business development, and it will definitely be a plus when it comes to investing. Moreover, in practice the a registered trademark is usually a direct requirement of investors to make investment.

In addition, a brand as a “wrapping” of a business is one of the most valuable assets.

For example, you only have to look at how clothing manufacturers collaborate with multinational brands such as Coca-Cola or Marvel. In these cases, the brand itself is a profitable business.

You probably do not think about selling your business when just starting it. However, a registered TM may be beneficial in the future, assuring potential buyers that protections against infringements have already been put in place.

Advantage #4. Domain name disputes are long and painful story. How does TM affect the outcome?

Unfortunately, the “first come, first served” rule applies here, therefore situations when the domain names are already registered to another owner are not rare.

Sometimes it is done specifically with intent to sell the domain to business owners (“cybersquatting”).

What is the role of a brand in domain disputes? In order to successfully challenge a domain name under the UDRP rules, the claimant must prove that it has the rights in the claimed trademark and that the domain owner obtained it in bad faith. Without a registered trademark, it is extremely difficult, if possible at all, to do so. We have already talked about this before.

Advantage #5. Registered TM for marketing purposes.

Even if the TM is merely descriptive and is not subject to registration in the main registry, it still remains possible to register it in the Supplemental Register. Registration in the Supplemental Register also provides the right to use the registration symbol and prevents the registration of confusingly similar trademarks.

In addition, some online platforms offer brand owners a mechanism for tracking goods/services that are sold through the platform under this brand. It also makes it possible to quickly establish facts of infringement of trademark rights and respond to them promptly. Such programs are available only to registered TMs typically.

Advantage #6. Incontestability status of TM after 5 years of use.

After 5 years of continuous use of the TM starting from the moment of its registration, the owner gets the right to apply for incontestability status.

According to U.S. law, after a trademark has obtained incontestability status, a certificate of registration becomes undeniable proof of the validity of the TM, the ownership of it, and the exclusive right to use it. In other words, the owner of the TM will have an advantage in court on these issues, which cannot be refuted by opposing evidence.

For example, an incontestable trademark cannot be appealed on the basis of its merely descriptiveness.

In addition, in the event that the owner of a trademark brings an action against an infringing party, the incontestability status of trademark will significantly reduce legal costs.

I just plan to sell my IT product in the US market …. What should I do?

One of the significant advantages of registering TM in the USA is the ability to register the one that is not  used in commerce yet, based on an intent-to-use application. After submitting an application, the applicant has six months to start using TM in commercial activities and submit a confirmation to the USPTO.

Most importantly, after registration, the filing date of the intent-to-use application will be considered the date of the first use of TM in commercial activities, which gives an advantage when it becomes necessary to claim priority.

Please note that registration of TMs in the USA provides protection only in the territory of this country. Therefore, if you plan to conduct activities in the EU, UK, Canada, it makes sense to register trademarks in these countries. Read more about it here.

With so many advantages, there are no doubts that registering a trademark in the United States is one of the most important steps for an IT business that is planning or already acts in the US market.

Still have doubts? Contact us 🙂

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