Common Law Trademark Rights and the Internet

COMMON LAW TRADEMARKS ACCRUED THROUGH INTERNET USE

Successfully filing and registering a trademark with the USPTO may be achieved by making two necessary moves; demonstrating that the trademark is sufficiently unique vis-à-vis the goods/services tethered to it and secondly, providing evidence that the goods and services are actually being sold in interstate commerce. What is less known, interestingly, is that one can also obtain trademark rights without submitting a trademark application to the USPTO through trademark jurisprudence’s Common Law doctrine. Interested in how Common Law trademark Rights are evolving in the age of the internet? Keep reading to find out.

WHAT ARE COMMON LAW TRADEMARKS

Like their more official, brother-marks that are filed in the USPTO, Common Law Trademarks are those marks, which are sufficiently distinct vis-à-vis, their goods/services and are in use in commerce in connection with the sale of their designated goods/services. What is unique, and restrictive about Common Law Trademarks, however, is that their coverage only extends to the geographical area in which the marks are used. For example, a pizza shop in Brooklyn, New York, which sells pizza under the name, Alpha Red Pizza, has the exclusive right to use that name in connection with the sale of pizza but only in Brooklyn (and possibly the rest of New York).

EVALUATING COMMON LAW TRADEMARK RIGHTS

Principally, the challenge in enforcing Common Law trademark rights is that because they are never actually registered in the USPTO, it is difficult to determine who actually owns the trademark and as of what date. Consider for example the situation in which two Queens based pizza shop owners have a similar name and each one wants to stop the other from using that name; because neither registered the name with the USPTO and instead relied on Common law rights, it’s hard to immediately ascertain who was the first user of the name and with what superior rights.

WEIGHING THE FACTORS

Ultimately, the courts are tasked with answering the essential questions of “to what goods/services do the trademark rights extend, to whom do these rights extend, and how large of an area should be covered under the mark?” In making these determinations, the courts weigh many factors. These factors include the location of the origin of sales, the space from which sales are marketed and sold, sales volume, scope of use, expansion or contraction of sales, advertising saturation within a market, efforts made for the expansion of use.

THE INTERNET IS CHANGING TRADEMARK LAW

Previously, this article noted that Common Law trademark rights are bound to the very specific geographical location where the trademark is in use. If you sell pizza under a certain name in Brooklyn, your right to the name only extends to Brooklyn. However, hopefully, the astute reader can now surmise the challenging question this poses for trademarks that are used online and in e-commerce website. Here, a seller is using the mark on the Internet, which is not constrained to a single physical location.

In the age of ecommerce, Common Law trademark rights seem to be anachronistic. How can the Courts carve out a geographical niche for the scope of the trademark’s use and rights when anyone on the planet can now access the goods with the click of a button?

The physical location of the business and its customers, as well as the nature of the business – traditional considerations in the court’s analysis of Common Law rights – are losing relevance in cyberspace.

CONCURRENT USE OF TRADEMARKS ONLINE

Remember, Common Law Trademark rights afford geographically limited protection and thus, two companies can potentially sell the same goods under the same trademark as long as they operate in different geographical areas. Such a dynamic is referred to as, Concurrent Trademark Use, and is indeed appropriate. Why? Because the geographic distance obviates the problem of consumer confusion as to brand ownership.

Now, suppose an ecommerce website was started in the year 2010 in the State of New York and sells baseball cards. The name of the website and company is Apex Luck Cards. Now, in the year 2020, a small retailer based in the State of Washington also set up an ecommerce website for the purpose of selling baseball cards and is also called Apex Luck Cards. In other words, what happens when the owner of a trademark in a specific location suddenly has digital competition from a far-flung competitor?

EXCLUSIVE RIGHTS TO USE A TRADEMARK ON THE WEB

Understand, the crux of all trademark law is the question of consumer confusions – when a consumer sees a junior trademark attached to goods/services, does he think the goods/services are actually produced by the senior trademark owner.

How this applies to Common Law trademarks and the Internet is less clear. It seems rather intuitive that it would be unfair for the courts to deny any form of concurrent internet-use on the grounds that publishing a website to the Internet (which is seemingly infinite in scope and reach) categorically locks in a user’s rights to the trademark. If this were the case, there would ultimately never be a need to file a federal trademark, which otherwise provides national coverage – one could simply publish an ecommerce website to the world wide web.

Simultaneously, the fact that the owner of an ecommerce website lives in New York does not mean that his website cannot have massive impact and influence in the State of Washington and if the owner has in fact made a significant effort to market and sell his product in Washington, his trademark rights should logically extend to that State as well. It seems that the devil really here is in the details and in any infringement and enforcement action, the Courts will have to pay very close attention to a website’s real-life effect.

PROTECT YOUR INTERNET DRIVEN, COMMON LAW TRADEMARK RIGHTS

What then should a business owner do to maximize his trademark rights when conducting business over the web? Well, first and foremost, strongly consider filing a federal trademark. USPTO applications are not prohibitively expensive and will take much of the legal guessing work out of the equation.

If the prospective applicant insists on only relying on Common Law rights, he should proactively keep track of the where/what/when/how the trademark was used. Business owners should carefully document all relevant data regarding their sales, advertising, growth, unique visitors. Finally, business owners must act swiftly to enforce any obvious trademark infringement and alert potential infringers of existing trademarks rights, even if they are based on Common Law protections.

In sum, the prevalence of on-line retailing in the modern economy has compelled the courts to revise its approach to Common Law rights of trademark use on the internet. Please follow our blog to stay up to date as this new legal jurisprudence unfolds.