by Nellie Akalp, Reprinted from Entrepreneur.com
I’m often asked when is the best time to trademark a new business or product name. On one hand, entrepreneurs feel pressure to register a trademark right away before anyone else starts using the name. On the other hand, registering for a trademark can seem expensive and time-consuming, particularly when the product or business isn’t even ready yet.
As a serial entrepreneur, I’m not in favor of spending money when you don’t need to, or pouring money into a business before you know its likelihood for success. However, I nearly always advise entrepreneurs to register a trademark as soon as possible. The reason why is twofold.
First, registering a trademark will help prevent anyone else from trying to use the same, or confusingly similar, name. The second reason may not be as obvious, but it's equally important. A successful trademark application ensures that your business or product name is truly available to use, and you’re not taking someone else’s mark.
First, let’s start with some basics about trademarks.
According to U.S. trademark laws, a business has common law rights to a unique name as soon as it’s used in commerce. However, common law rights are limited to your geographic area, and provide limited help in court should you try to challenge another business for using the same name. These are some of the main reasons why businesses apply for federal trademark protection in the first place.
A standard trademark - officially called actual use trademark -- requires that your product or service is market ready and that you’re already using the mark in commerce. But what if your business isn’t ready for prime time yet? In this case, the U.S. Patent and Trademark Office (USPTO) will let you file an intent to use trademark application.
The intent to use trademark basically reserves a trademark until you’re ready to use it. The main benefit is that it sets your filing date as the constructive date for establishing nationwide priority. If you file an intent to use application on October 1, but haven’t launched your product yet and another company comes in and files an actual use trademark application on November 1, you will have superior rights to the name even though the other company went to market first.
Here's the one important detail: For the intent to use application to be valid, you will need to put your mark in use, and file a statement of use application with the USPTO. The USPTO gives you six months to go to market after filing your intent to use the application. If you’re not ready by then, you can file a six-month extension - and have up to five extensions total. But if you fail to file an extension on time, or aren’t ready after your five extensions are up, then the USPTO will consider your application to be abandoned.
To appreciate the importance of applying for an intent to use trademark early in the process, here’s a story cited in the National Law Review.
A Minnesota business filed an intent to use trademark application on December 10, 2011 for the mark, BLAST BLOW DRY BAR. However, a Texas business had already filed an actual use trademark application on December 8, 2011; the application from the Minnesota business was rejected. Had it filed its intent to use application just three days earlier, it would have received priority.
The takeaway? It’s entirely possible that someone else will come up with the same idea as you for an entity name, and with trademarks, the early bird gets the worm.
In addition to marking your claim sooner, there’s another good reason to apply for an intent to use trademark early in the process. It ensures that you aren’t putting yourself at legal risk by infringing on someone else’s name.
When you apply for a trademark, whether it’s an actual use or intent to use application, the USPTO is going to assess your proposed mark.
Among other things, they’ll take a hard look at the likelihood for confusion between your proposed mark and anything else out there on their market. They’re not just looking for the identical name; they’re looking for anything that might confuse consumers, such as similarities in spelling and pronunciation. This is also why it’s a smart idea to conduct a thorough trademark and name search before submitting your application. It’s better to catch any red flags as early in the process as possible.
If your intent to use application is approved, you can rest assured that your proposed name is legally available, that you’re not infringing on someone else’s property, and that you won’t receive a cease and desist letter years later from another company. Or, if you do receive a letter, you’ll know they don’t have much of a case.
Nothing is worse than spending months, even years, developing a brand around a certain name only to find out that another company already owns it. Applying for a trademark early means you can identify, and work out any potential legal issues before you invest all your time and energy into the name.
When it comes to building your brand, being proactive is the way to go. Unless you’re truly on the fence as to whether your business will be successful, there’s no reason to delay your trademark application. Applying for intent to use trademark protection as soon as possible ensures you’re not putting yourself at legal risk, and it's the best way to protect your name.
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