Trademark Rights Based on First And Continuous Use And Under The Lanham Act
Trademark rights have been based on first and continuous use of a trademark in commerce in connection with goods, products or services. The rationale for awarding trademark rights based on first use is that (1) the use establishes marketplace awareness, (2) awareness results in goodwill, and (3) the use by others should thereby be restricted to the extent that it is likely to result in consumer confusion of deterioration of goodwill.
There is an alternative basis for establishing protectible trademark rights under the Lanham Act for the first to apply to register a trademark, with a bona fide intent to use it. The first to apply for federal trademark registration is awarded a formative ownership right as of the date of the federal trademark application.
Trademark Rights Through Use Alone
Trademark rights arise through use of a mark in connection with one’s goods, products or services. These rights are commonly referred to as “common law rights.” Common law trademark rights are typically limited to the geographic area in which the trademark or service mark is used and, in some instances, a zone of natural expansion into which the trademark owner, or business that owns the trademark, is likely to expand its use.
Particularly with regards to small businesses or new products, questions often arise as to the nature and amount of use that must be made of a trademark to establish common law rights. Even a small amount of use in commerce may sustain trademark rights if followed by continuous commercial use; but, of course, every situation is different and therefore any analysis of use will be fact specific.
Trademark Rights Through Federal Trademark Registration
Once a bona fide use of the trademark or service mark is made, or in some circumstances, intends to be made (Intent to Use Application), the federal trademark applicant may be awarded nationwide priority dating back to the filing date of the application. These nationwide trademark rights, however, are not absolute. They are subject to (a) the common-law rights of any third-party trademark owner that has been using its mark since before the application filing date, and (b) any prior registrations or pending applications by third parties.
The concept of trademark priority is important in trademark law because the senior user or federal trademark registrant of a trademark may have the right to exclude newcomers from using confusingly similar marks in the industry or marketplace. As discussed above, a trademark owner’s priority date is easily determined when based on the filing of a federal intent-to-use application or an actual use application. It is extremely important, however, to ensure the “first use” and “use in commerce” dates are properly and truthfully made in order for a trademark owner to avoid a trademark opposition proceeding or a trademark cancellation proceeding.