Start Ups – When Should I File a Trademark Application?

When deciding to form a start-up company, there are several important legal documents that should be prepared and evaluated, specifically with respect to Intellectual Property.  One area of Intellectual Property that should not be overlooked is the protection of the brand of the company through a Federal Trademark Application, which ensures that the name or logo associated with the goods and services provided by the start-up will not be copied or infringed upon.  This article will continue the discussion of a previous posting, wherein once a trademark search has been completed, it is time to consider the benefits and drawbacks related to the timing of filing a Trademark Application as it pertains to a start-up company or any other early-stage entity.

A key consideration in moving forward with any legal services for a start-up, especially Intellectual Property services (i.e. Patent, Trademark and Copyright protection), is the available resources and the amount of capital budgeted by the start-up.  Often times, start-ups are hesitant to spend money on legal services at the outset of their venture, instead focusing on marketing and building the brand of the business.  In terms of filing a Federal Trademark Application, unlike a Patent Application, you will not lose your right to file for a US Trademark upon public disclosure and use of the mark in interstate commerce.  Despite that most start-ups view this process as an important piece of the puzzle, filing a Trademark is not at the top of their priority list.

So, if you do not lose your right to file a Trademark Application upon use, then what would be the downside to waiting to file until the start-up has raised capital to invest in those services?  It is important to be aware that, generally, a “senior user” of a mark or logo is deemed to be the first entity that uses the mark in connection with the associated goods/services in interstate commerce.  Therefore, one would think if you are the first to use the mark, then it shouldn’t be a problem when you file a Trademark Application.  That line of thinking is correct with respect to your likelihood to prevail in a dispute should other similar or same marks exist, however there are repercussions when dealing with the Trademark Office upon filing an application.

In reviewing a Trademark Application, the Trademark Examiner will compare your proposed mark against all registered live marks and pending applications to determine whether a likelihood of confusion would exist between your mark and someone else’s.  Furthermore, the Examiner, when reviewing your application only looks to the filing date of your application, not the use date in making this determination.  This doesn’t seem to make sense, if someone has an earlier use date, then shouldn’t they be able to receive a Federal Registration?

Normally, the party with an earlier use date will prevail, however they are going to need to take additional steps to address this matter with the Trademark Office.  Sometimes the simplest solution is to contact the other party and inform them of your priority and see whether you are able to come to some type of agreement. If this fails, a necessary step would be to submit either a Notice of Opposition or Petition for Cancellation to remove the other party’s mark from being a bar to your registration.

As a result of a delay in filing for Trademark protection, a rather small project, which may have resulted in receiving a registration in under a year, has now evolved into a more costly and drawn out process.  Too often start-up clients, or even larger entities simply delay filing a Trademark, and only when a competitor pops up, or they find out someone else has begun using a similar mark or logo, do they then decide to take action.  Therefore, it is important to consider protecting your branding as early in the process of forming the company as possible and making sure you devote some of your budget to investing in these services.