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Trademark Common Law Rights Can Prevail Based On Priority Against Registered Rights

To receive the broadest type of trademark protection, we recommend registration with the United States Patent and Trademark Office.  However, in the United States, if you have not registered your trademark rights, but you can prove trademark use in commerce, you will build common law (unregistered rights) rights. Common law trademark rights have been developed under a system of rights governed by state law.  However, they will be limited to the geographic area in which the trademark is used. Of course in today’s global economy, common law rights are defined slightly differently due to trademark use on the Internet. Although, the same principal of a case-by-case analysis that is applied to infringement matters, will also apply to define one’s common law rights when Internet use is involved.

It can be particularly difficult to discover whether a third party has common law trademark rights in a specific mark.  It is critical to search, not only state and federal registers, but also unregistered use. Common law trademark rights can prevail against a registrant based on priority of use. The two cases discussed below demonstrate this point.

In a recent Trademark Trial and Appeal Board decision, Barnhardt Manufacturing Company v.Wildwood Gin, Inc., Cancellation No. 92053237 (June 17, 2013) [not citable as precedent], the Board ruled that the petitioner established priority by a preponderance of the evidence, based on its common law rights. The petitioner proved that it shipped its product to a customer in Israel before the registrant/respondent first used the mark in interstate commerce.  The Board held that in order to establish priority, a plaintiff is only required to show prior use, not continuous of its mark, unless the defendant has asserted the affirmative defense of abandonment. Here, the sale to a single foreign customer was enough to win on priority, and thus the Board granted the cancellation petition.

In another Trademark Trial and Appeal Board decision, Terra Sul Corporation A/K/A Churrascaria Boi Na Brasa v. Boi Na Braza, Inc., Cancellation No. 92047056 (June 12, 2009) [not citable as precedent], the Board again granted the petition for cancellation based on the claim of likelihood of confusion under Section 2(d) of the Trademark Act due to the petitioner’s common law rights.  In this case, the parties did not dispute that the marks in question were similar, that the restaurant services were identical, and that the trade channels overlapped. The only issue in dispute was the question of priority based on the claim of petitioner’s common law trademark rights.  The earliest date for which the respondent could rely was its filing date of the registration’s underlying application, July 1, 1999. Petitioner was able to show use of its mark in commerce prior to the July 1st date.  This was evidenced through testimony, newspaper advertisements, and other documents.  In view of this, the petitioner established its priority with respect to its common law rights in the mark and the Board granted the petition for cancellation, allowing the petitioner an opportunity to file for federal registration.

Owning a federal trademark registration allows for remarkable benefits, however it does not in and of itself give the registrant the exclusive right to use the mark, if the registrant failed to do its due diligence. As these two cases demonstrate, third parties who can prove prior use of a mark in commerce, will have acquired protection under the Trademark Act in certain geographic areas in the U.S. and this should not be overlooked in a trademark infringement dispute, or when clearing a mark for registration. In our practice, we strongly recommend that our clients conduct full and thorough searches prior to filing for registration at the United States Patent and Trademark Office or at any other Trademark Office around the world.  Full searches will reveal problematic registrations, in addition to discovering prior unregistered use.  If the country of interest adheres to a common law system, as does the U.S. this information will be invaluable to you and your organization.