Three entrepreneurs have come to me in the last couple weeks with the same issue: a conflict between a registered and an unregistered trademark.

This free legal information is made available courtesy of Counsel to Creativity.

Even with as often as I look at trademark issues, the same issue doesn’t come up that often. But there it is, rearing its head, demanding some attention, some clarification and some action.  So, here I am on my soapbox. (It’s shiny, it’s red and right now it says TRADEMARK on it.)  I do not want this to happen to you.

I am on a mission to have not one more creative, passionate, female entrepreneur panic and stress about losing the value she’s created in her business due to a trademark infringement.  Listen up, ladies.  (And men.  It impacts you too.)  And then, take action to take care of your business (and yourself).

What happens when an unregistered trademark and a registered trademark infringe?

• The short answer:  it gets dicey.  (And you don’t want to find yourself there.)
• The longer answer:  Rights under trademark law are based upon first use NOT first registration.  That means that the first business to use the mark has common law rights to that mark.  It doesn’t matter if another owner has registered a similar, confusing mark.

But—and this is a big BUT—the first user has rights only where the mark was actually used prior to the date of the registered mark.  So, if you’re in Georgia and have been using the mark since 2005 but have not registered it, your trademark rights are based upon where you’ve actually sold your goods or services.  (It’s called market penetration.)  You may have rights in Georgia; you may have rights only in Atlanta; you might have rights in Northern Georgia and parts of Tennessee, North Carolina, South Carolina and Texas.  It all depends upon where your business has earned a reputation that is demonstrable.  And get this, you have to prove it.

(Yes, trademark law is a little behind the times with the internet and all.  Big surprise.  Still, it defines your business’s rights, and it defines rights based upon geography.)

Here’s where the registered mark has the advantage.  The registered mark has national protection without having had to actually penetrate a market in every single state.  And the owner doesn’t need to prove anything to the unregistered mark owner with regard to use; the registration does that for her.

So, what can you do?

Federally register your trademarks.  It is a small percentage of your brand value of the life of your business, and much much less money and stress than a trademark conflict or an involuntary rebrand. (It really does happen.)