Benefits of a Federal Trademark
On the other hand, there are a number of benefits to having a federal trademark to own the name of your nonprofit. Some of the benefits include:
1. Ownership. The first benefit of having a federal trademark is the peace of mind that comes from knowing that you have legal ownership of the mark. This means that if another nonprofit in another city, county, or state desires to use your mark, they have to get your permission (unless their use falls within “Fair Use” which is also discussed in this book). This prevents you from spending money buying a domain name, building a website, having a graphic designer create a logo, establishing social media profiles with a name, only to have to spend all of the money all over again because you had to take it down since someone else already owned the name.
2. Make Money through Licensing. Another benefit of owning a federal trademark is that it provides another stream of income for your nonprofit. Meaning, once you have established a brand, you could license, or give other people the right, to use your mark on other products in exchange for paying you a royalty.
Example: Christina starts a socially conscious nonprofit that builds a substantial following of young adults. Since all of her social media followers are familiar with the name of Christina’s nonprofit, and they associate the name with a culture that supports social causes, she has her attorney draft an agreement with an organic t-shirt company. The organic t-shirt company wants to reach more customers that will be willing to pay a premium for their shirts in exchange for knowing that the t-shirts will not harm the environment. They agreed to pay Christina a royalty of 5% for every t-shirt they sell that features her nonprofit’s logo. This becomes an additional stream of income, or source of revenue, for Christina that she does not have to work for. As her nonprofit’s popularity increases, she strikes similar deals with companies that sell organic coffee mugs, novelty items, work-out clothes, and even a perfume line.
3. Get Paid When People Wrongfully Use Your Mark. Owning a federal trademark also means that you have the right to sue someone in federal court for money damages if they use your mark without your permission.
Example: Stacy finds out that there is a nonprofit in Indiana that has the same name as her nonprofit. They have started using the logo of the nonprofit Stacy founded (despite the fact that she has a registered federal trademark for the logo) without her permission.
The fraudulent organization starts gaining popularity. Stacy contacts her lawyer and has them send a legal notice to the company demanding that they immediately stop using her legally protected logo. She checks their website frequently and sees that they have not changed the logo or name after having received the notice.
She then hires her lawyer to file a lawsuit against the company in federal court. She requests that the judge not only award her the profits that the company has illegally made from selling merchandise but she also asks the judge to reimburse her for the money that she spent on attorney’s fees. She wins the case.
4. You can get international rights. Federal trademarks protect your mark within the United States of America. However, if you decide that you want to protect your mark internationally, you can use the rights that you have as the owner of a federal trademark in the U.S. to help build your legal case to apply for trademark rights in other countries.
Example: Now that Stacy has a registered trademark in the United States for the name of her nonprofit, she hears that supporters in China have recently discovered her website over the Internet and might also be interested in donating to support her nonprofit. This means that they may also want to purchase items that feature her nonprofit’s logo that she has licensed to other vendors.
In order to protect her brand from knock-off nonprofits in China that may start selling the novelty products her nonprofit has on its website, Stacy hires her attorney to file to register her trademark in China as well as several other major countries. Since she already has acquired or gained the rights to the mark in the United States of America, she uses this as a basis to apply for rights to the mark in China.
5. Your mark is marketable. A federal trademark is considered intellectual property. This means that oftentimes corporations or foundations that may be interested in sponsoring your nonprofit may want to make sure that you own the rights to your brand before they make a donation. They do not want to risk spending money donating to a nonprofit only for it to be sued by someone else later which is a waste of their resources. Therefore, the mark is something that has value in the market and can be sold.
6. Use the Symbol. Owning a Federal trademark also allows you to use the “Circle-R” or “®” registered trademark symbol. This symbol puts everyone on notice that you are the owner of the mark and that they cannot use it without your permission. If you use the registered trademark symbol without actually having registered your trademark, you can face federal penalties.