Common Law Trademark Rights
Believe it or not, you do not have to actually apply for a federal trademark to begin building legal rights in the name or logo of your nonprofit. Generally, the person that uses the name first “in commerce” has the right to the name as long as no one else used it “in commerce” before you. Using the mark in commerce gives you “common law” rights to the mark.
However, as we have already discussed, one of the main reasons you should still invest in registering your name as a federal trademark – instead of just using it relying on common law rights and hoping no one else does – is that registering the name makes it much easier to legally prove that you are the actual owner of the name.
For example, if you think of a really creative name for your nonprofit or group and start using it without registering it as a federal trademark, someone else in another state can have their lawyer contact you to sue you to stop you from using their name. If they win in court, you can be responsible for money damages.
If you have not registered the name as a federal trademark, you will likely have to hire an attorney to try to gather evidence to build a case to prove that you started using the name before the other user did. This can be an expensive and time-consuming process as you may need to hire expert witnesses, prepared testimony and defend yourself in a court proceeding in order to try to prove that you are entitled to legal ownership of the name. It is basically your word against theirs since you did not register it as a federal trademark. If the other side wins, you could end up paying the original owner and lose the ability to use the name for your nonprofit.
On the other hand, if you take the time to register your name up front as a federal trademark, you can simply let the person know that you are the registered federal trademark owner of the name. This statement alone is oftentimes enough to discourage someone from challenging your legal ownership of a name.