Have you ever wondered how to own a trademark? This is the fourth blog within our How to Make Money with Trademarks series. In the first article, we talked about What is a Trademark & How to Make Money with Them. In the second article we discussed How to Create a Trademark that Makes Money. Now, we’re going to talk about how to legally own the rights to the money-making trademark that you’ve created.
What are Common Law Trademark Rights?
Let’s clear one thing up. Technically, you don’t have to file with the government in order to own the legal rights to a mark (e.g., name, slogan or logo) that you created. You simply need to have been the first person to begin using the mark “in commerce” to acquire ownership of the mark. These rights are called “common law” trademark rights.
Why Should I Apply for a Trademark?
You’re probably wondering why you should even bother investing your resources hiring a trademark attorney to apply for a federal trademark if the law will automatically protect your ownership in the name. Well, the answer to this question is simple – registering your federal trademark gives you certain legal benefits that you won’t have otherwise.
One of the main reasons you may want to strongly consider registering your name as a federal trademark is that relying on common law rights may not be sufficient to prove your ownership. For example, someone else can hear the name and claim that they created it and started using it before you did. At this point, you may have to sue them in court in order to enforce your “common law” ownership rights. However, without having a properly registered trademark, it may be time consuming and expensive to hire an attorney and provide enough evidence to prove that you were in fact the actual owner.
Instead, you may be able to save yourself money and time by investing in a federal trademark up front. Here are some of the benefits.
What are the Benefits to Registering a Trademark?
- Ownership. One of the benefits of having a federal trademark is that if someone wants to use your trademark, they will need to ask for your permission (unless they want to use it for a reason covered by the “Fair Use Doctrine” which is a different topic). This means that you can feel confident investing in building a brand around your name (website, social media accounts, business cards, merchandise, etc.) knowing that the law presumes that you are the legal owner of the name.
- Make Money Licensing the Name. Owning a federal trademark also means that you can charge people for the right to use the name (license). This means that if an apparel company wants to use a slogan that you own the federal trademark for, you can charge them a percentage of their gross annual revenue each year for a license to use your slogan on their t-shirts, hoodies, and other merchandise. Not only does licensing build awareness for your brand, it also generates income for you!
- Make Money from Lawsuits. When you are the legal owner of a federal trademark, you also have the right to legally sue individuals that use your trademark without your permission (trademark infringement) for money damages.
- Make Money Selling Your Trademark. If you have ever considered selling your business or company, one of the first things business brokers will advise you is that you need to make sure that you own all of the intellectual property (trademarks, logos, slogans, trade secrets, etc.) associated with your business. Otherwise, investors may not want to by something that they feel they may be sued later for since your trademark was never registered.
- Make Money Internationally. Another benefit to owning a federal trademark in the U.S. is that it gives you a legal basis (in some instances) to apply to own the trademark in other territories and countries. This allows you to also own the name abroad and make money licensing the name in other countries.
- The Right to Use the “®”. When you legally register your federal trademark, you can announce to the world that you are the registered owner, and further protect your legal interest in the mark, by using the the “Circle-R” or “®” registered trademark symbol. This symbol offers legitimacy to your brand and puts others on notice that you are the registered owner of the mark. The federal government also has penalties for individuals that use the symbol when they are not a registered trademark owner.
These are just a few of the reasons why it may be beneficial for you to register your federal trademark. Check out the next blog on Applying for a Trademark within our How to Make Money with Trademarks Series to learn the steps you need to take in order to legally register your trademark.