What is a State-Based Trademark?

October 8, 2019

The right of individuals to benefit from their unique creative endeavors is older than the Constitution itself. Scholars suggest that the legal protections currently available to scientists and artists through the United States Patent and Trademark Office (“USPTO”) date back to Ancient Greece. While the United States Constitution directs Congress to protect the exclusive federal rights of scientists and artists to benefit from their works, these ancient rights are also foundationally protected in each of the 50 states.

The Virginia and D.C. intellectual property and trademark attorneys at McClanahan Powers, PLLC are intimately familiar with the differences between registering your trademark federally with the USTPO in Alexandria, Virginia and registering a state-based trademark with the Virginia State Corporation Commission among other state-based trademark offices. To schedule an intellectual property consultation with one of our experienced state and federal trademark attorneys, call us today at (703) 520-1326 or contact us online.

Overview of Trademark Registration

A trade (or service) mark is defined as a word, name, symbol, design, or sound that identifies or distinguish a product or company from competitors. In order to qualify as a trademark, the mark must be used in commerce, i.e., to market a product or service, and must be “distinctive.” This means a similar mark is not being used in your marketplace, and your mark is sufficiently creative to qualify for artistic protection. There are five categories a trademark can fall into, but only the first three categories qualify for legal protection:

  • Fanciful (Coined): A logo/word invented solely to function as your trademark. Coined trademarks cannot have outside meaning. Xerox® is considered a fanciful trademark.
  • Arbitrary: A trademark with a common meaning that’s not associated with your marketplace. E.g., Apple®– a common fruit used to market technology.
  • Suggestive: These trademarks creatively “suggest” something about the nature of your business. The North Face® is suggestive mark as it suggests the products are durable enough to wear on the north face of a mountain.
  • Descriptive: Descriptive marks are often confused with suggestive marks but are not protectable. For example, “New York Pizza” or “Best Cleaning Services.” Names and last names are generally characterized as descriptive, i.e., “Smith’s Garage.” Creativity is the key distinguishing factor between suggestive and descriptive marks.
  • Generic: Anything that doesn’t fall into the above categories is probably generic, i.e., “Virginia Coffee Shop,” and is not protected by trademark law.

Most qualifying trademarks are registered through the USPTO, but every state has a trademark office dedicated to preventing consumer confusion. Understanding the differences between federal, state, and common law trademarks is essential to protecting your intellectual property and the goodwill of your business.

Types of Trademarks

 Trademarks registered through the USPTO are protected by federal law under the Lanham Act.  The benefits of registering a trademark with the USPTO include:

  • Access to federal courts
  • National trademark protection, i.e., coverage in every state and territory
  • The ability to sue for infringement under federal law
  • The availability of attorneys’ fees and special damages for infringement including litigation costs and disgorgement of illegal profits
  • The exclusive right to use the trademark in the United States

However, registering a trademark with the USPTO is often expensive, time-consuming, and is not available to many local businesses. Trademark holders may, therefore, benefit from registering their trademark with their state trademark office.

State-based trademark protections are afforded to marks that are not used in multiple states and may be the exclusive registration available for those marks. Due to the jurisdictional prerequisites required for federal trademark registration, which include actual use or imminent intent to use the trademark in multiple states, some local trademark owners may only avail themselves to state-based trademark protections. Trademarks registered with the state are called “state-based trademarks,” and most states simply require the trademark to be “in use” within the state. These trademarks are protected within the state of registration only, but you may be eligible to register your trademark in multiple states. Your state-based trademark rights are similar to those afforded by federal registration with the following benefits/differences:

  • Suits for infringement must be brought in state court under a state-based trademark act such as the Virginia Trademark and Service Mark Act
  • Substantially reduced registration and renewal fees
  • Easier application requirements and processing time

State-based trademarks are not the same as “common law” trademarks, and state-based registration is typically subject to “first use” common law trademark rights. This means it’s not a “race” to registration. If a local business has been using an otherwise eligible but unregistered ice cream logo for 30 years, another local business may not copy and register that logo without running afoul of the creator’s common law trademark rights.

Choosing Where to Register a Trademark

Many major corporations register their trademarks internationally, federally, and in each of the 50 states. While this provides the greatest breadth of legal protection, it is often unnecessary to protect local trademark owners. If you’re not using a trademark outside of your state and would not suffer reputational or financial harm should a business outside of your local utilize a similar trademark, state-based trademark registration may be the best option. While it’s important to consider both where your business is and where it is going, many intellectual property disputes can be settled on a state level. State-based infringement litigation is often cheaper than filing a federal lawsuit, and you may recover the same level of damages. State-based trademark registration is also wise if it may be possible for a competitor to claim that a federally registered trademark has never been used in interstate commerce.

Contact the Experienced Intellectual Property and Virginia Trademark Attorneys at McClanahan Powers, PLLC

Local businesses should not expend precious resources to register a trademark with the USTPO before consulting with our qualified Virginia/D.C. trademark attorneys. At McClanahan Powers, PLLC, we can analyze your trademark and business model to determine the best type of trademark registration for you. We take a client-centered approach to the practice of law and are invested in the present and future success of our clients. To schedule a consultation with one of our experienced state and federal trademark attorneys, call us today at (703) 520-1326 or contact us online.