Today’s guest blogger is Bennett Collen of Cognate.
Only an estimated 2% of trademarks are ever registered with U.S. Patent and Trademark Office. I’m sure this surprises a lot of people, but it’s not a misprint. A full 98% of trademarks don’t have federal trademark protection, and that’s a conservative estimate; the real number is probably higher.
So why is this? Three main reasons:
- It’s expensive – $225 to file even the most basic electronic form of a federal trademark application. If you’re not comfortable filing the application yourself, you need to hire a lawyer, turning a few hundred dollars into a thousand or more.
- It’s complicated – If you have all of the relevant information about your mark at hand, it will still take about 90 minutes to complete your application.
- It’s slow – An examining attorney won’t even read your application for 3-6 months after you file. Then, you may have to make amendments to your application based on what the examining attorney finds. Then those changes have to be approved. All told, it could be another 6 months until your registration is granted, and a significant percentage of applications are never granted registration.
Let’s consider a software startup. They practice lean startup methodology, are live testing a MVP with paying customers, and using a company name they agreed on just to start testing their product. Every dollar they make either gets reinvested into the company or goes towards the living expenses of the founders. Spending $1,000 to protect the name of a company or line of products – that a) might not be around in three months and b) might change names in the near future – simply isn’t an option. So they do nothing to actively protect one of their most important assets: their trademark. This leaves them vulnerable to someone accidentally, or intentionally, using the same mark.
Or consider a big corporation with extensive product lines, like a clothing company. They come out with thousands of articles of clothing every year, each with its own unique name (trademark). Even the wealthiest corporations can’t or won’t justify spending $1,000 per mark to register every single article. Many of their products are seasonal, and regardless of cost, a federal trademark application wouldn’t be approved until the clothes were so last season.
For many companies, not registering is a matter of cost and practicality. Some businesses don’t require federal registration because they’re not doing business outside of their immediate geographic region. A deli or a dry cleaner will almost never require federal registration. Since they do business locally, many of the benefits of federal registration are unnecessary (like having the ability to register with U.S. Customs to prevent the importation of counterfeit goods).
But that doesn’t mean these businesses shouldn’t do something to claim their trademark rights. All three types of companies described above will have earned common law trademark rights and should register those rights – without breaking the bank but still putting potential infringers on notice. We don’t think trademark registration should be a luxury reserved for only 2% of brands.
Thanks to Bennett and our partners at Cognate for the valuable insight on trademarks. Unsure about your own trademarks? Use Traklight’s ID your IP to identify before going to Cognate.com to protect those 98%.