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Never let it rest.

That was probably the annoying childhood mantra of many self-starters. It is also a pretty good way to understand the usefulness of those designations “TM” for trademarked or “SM” for service marked. They have no significance in federal law, but indicate an effort on the part of the owner to protect the identity of a product or service under common law or state statute.  Keep four principles in mind:

  • Common law trademark protection is largely theoretical,
  • Trademark registration under state law is better,
  • Federal trademark registration is the best,
  • But your trademark is only worth what you're willing to do to enforce it.

So, let’s back up to figure out when you should use these symbols and why they can be important to your business.

Common Law Trademark Protection

These are rights that are developed through use and require no registration. Since there is no registration, they also cannot be searched. It can be very difficult, if not impossible, to discover whether another business is using the same or very similar unregistered name.

Common law rights are also limited geographically to the area in which a product is marketed, so if you market a product as “Wally’s Widgets” in California only, your business is not protected from someone using that name in New York, or nationwide, in every state except California. Clearly, expansion can be problematic with an unregistered mark, brand or business name.

State Trademark Protection

Each state offers trademark registration within that state. In Texas, as in general, the name or slogan must be distinctive, not likely to deceive a consumer as to identity and already in use. You have to use it, at least briefly, before you can protect it. This may be a very good time to use the TM or SM mark. Keep in mind that neither incorporation nor registration of a fictitious business name (dba) in a state gives trademark protection to the business name.

In a trademark dispute, a business with state trademark registration for a name or a brand will likely prevail over a business that relies on common law rights. As with common law rights, however, state registration is geographically limited, which may not be appropriate for a business with expansion plans or a significant online presence. Although federal registration is generally more expensive than state registration and can be quite slow, it may the way to get the widest possible protection.

Federal Trademark Protection

Federal trademark registration creates a legal presumption that you own the mark, (or business name, brand name, or whatever you have registered) and have the exclusive right to use it nationwide.  It also gives you the right to sue someone in federal court for infringing on it.   It is indicated by the letter “R” within a circle, or the words “Registered in United States Patent and Trademark Office,” or, “Reg. U.S. Pat. & Tm. Off.”  This symbol or these phrases cannot be used until the registration is complete, however.  While the process is pending, the TM or SM marks should be used.

Other Steps to Protect Your Business Identity

One of the biggest challenges start-ups face is to define and protect business identity.  Especially in the first few years, it may be your company’s most valuable asset.  There are a lot of tasks that go into this, including defining business structure, registering a dba, trademarks and a domain name, to list just few.  Some sound business and legal advice at the beginning may protect the years of work you will spend developing goodwill and reputation. Even at that, however, these rights are not self-enforcing, so you must also be prepared to monitor for infringements and defend them, if necessary.  Prevention is cheaper than cure. Understanding the benefits and limits of trademark and service mark protection is a step in the right direction.

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