Nationwide Priority and the Small Business Owner

13 Sep

Federal registration of a trademark or service mark provides a business with many advantages.  One advantage of federal registration is that it affords a business nationwide priority in a mark.  Nationwide priority means that a business would be able to stop another business or individual from using the registered mark, if the business started using the mark after registration of the mark, even though the business that holds the registration in the mark may not be doing business in the particular area in which the other business is using the mark.  So why is this right important to the small or medium business owner who may or may not have an intention of expanding his or her business?     

A business acquires rights in a trademark or service mark through use within a particular territory or geographic region.  By way of example, if a business begins operating and marketing its products or services only in the City of Minneapolis, and a competing business thereafter begins operating and using the same or similar mark across the river in the City of St. Paul, the business in the City of Minneapolis may not be able to prevent the business in the City of St. Paul from using its mark because it is not using the mark in the City of St. Paul.  However, if the business in the City of Minneapolis had federal registration in its mark, it could prevent the business in the City of St. Paul from using its mark even though it is not doing business there.  Therefore, while the small or medium business owner may be less concerned if an out-of-state business uses the same or similar mark, the small or medium business owner will want to ensure that other businesses within and in surrounding areas in which it is operating do not use the same or similar marks.  Federal registration is a tool that the small or medium business owner can use to achieve this.  In addition, federal registration preserves the small or medium business owner’s ability to expand into different areas in the future.    

This blog entry is written by Natalie Walz, an associate at Thomsen Nybeck. Natalie practices in the transactional and litigation groups of the firm and concentrates her practice in the areas of Trademark & Brand Management, Copyright Protection, Real Estate Litigation, Townhome & Condominium Law, and Construction Litigation.

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