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It is widely known that a federal trademark registration is preferable to a state trademark registration or reliance on common-law trademark rights. However, in some circumstances a state
trademark registration has value. This article provides an analysis of the reasons for registering trademarks with a state as compared with federal registration and reliance on common-law
trademark rights. The procedures for obtaining and maintaining registrations in Utah are also presented in this article. There is also an overview of infringement remedies available to
owners of marks registered in Utah.
Limited Circumstances Meriting State Registration Instead of, or Concurrently with, Federal Registration
Federal registration of a
mark is preferable to state registration because of the greater rights provided to the owner. However, a federal registration cannot always be obtained. When it appears that a mark may be
difficult to federally register and a significant investment has not been made in the mark, it is typically better to select an alternative mark having a higher likelihood of being
federally registered. Nevertheless, selection of an alternative mark having a higher likelihood of being federally registered is not always the most advantageous option. For example, a
locally focused business with no prospect for geographic expansion may prefer continuing to use a mark that has gained significance in a local market, without concern for the ability to
obtain a federal registration.
Many marks are not eligible for federal registration because of their limited use within one state. A federal registration can be granted only for a
mark that has been used in association with goods or services in interstate commerce1 as there is otherwise no federal power2 to grant the registration. However, a business need not even necessarily render its services in more than one state to qualify for federal registration.3 In fact, it has been held that a solely intrastate, single-location restaurant serving an undefined quantity of interstate travelers sufficiently affects interstate commerce to meet the federal registration eligibility requirements.4 Nevertheless, if a mark is used solely in connection with a local services business not patronized by a significant number of interstate travelers, or if it is used solely in connection with goods sold exclusively within one state and not sold to a significant number of interstate travelers, it probably does not qualify for federal registration.5
Before pursuing state registration for a mark that is presently used only in a limited manner in Utah and abandoning the federal route, consideration should be given to the
potential use of the mark outside of Utah. While federal registration requires that a mark be used in interstate commerce, it can also be sought before the mark has been used in
interstate commerce if the applicant has a "bona fide intention to use the mark in commerce."6 This route to federal registration begins with the filing of an "intent-to-use" application.7 The ability to declare the use of a mark months or even years after an intent-to-use application is filed provides businesses with tremendous flexibility. On this basis, an application for federal registration should be filed for any mark that is currently ineligible for federal registration, if use of the mark is likely to expand outside of Utah, or if it is at all foreseeable that the product or service will soon be offered and/or advertised via the Internet.
For businesses with a very limited expectation of using a mark outside of Utah, forgoing federal registration in favor of state registration may sometimes be a viable, even
preferred, option. In addition to being less rigorous than the federal registration process,8 a state registration can be obtained much more quickly than a federal registration. Achieving federal registration typically takes one year, and often much longer, while state registration can often be accomplished in a matter of weeks. A state registration is also much cheaper to obtain than a federal registration, due in part to the comparatively nominal filing fee for an application for registration in Utah.9 More importantly, however, the legal fees for obtaining a state registration are typically much less than those for obtaining a federal registration because the standards are generally not as rigorous and fewer obstacles are typically encountered.
Seeking state registration either in conjunction with, or preliminary to, seeking federal registration is not a strategy that is typically recommended. However, the strategy may
be useful to an owner who believes state registration is needed in a key state (where the mark has been used) while federal registration is being sought, especially if federal
registration is being sought via an intent-to-use application and the timetable for the expected use is not entirely certain. The strategy may also be useful as a fallback plan for an
owner of a mark who has decided to use a mark that may be difficult to federally register on the Principal Register.10
For marks that are ineligible for federal
registration or that are not considered to merit the expense of seeking federal registration, a state registration may also be useful in preventing others from obtaining a federal
registration for an identical or similar mark, as it may put others on notice of the mark. Trademark searches often include searches of state registration databases, and thus others
searching to clear a mark for use and to assess the likelihood of obtaining federal registration will know of, or at least are able to know of, the state-registered trademark. Knowledge
of a similar or identical mark should deter others from seeking to register such a mark, as an application for federal registration must include a verified statement11 alleging ownership and entitlement to use the mark.12
Advantages of a Registration in Utah over Registrations in Other States and Common-Law Trademark Rights
Just as state registrations can provide a defensive
advantage against those seeking nationwide rights, a state registration provides an effective notice to others seeking to clear a mark for use in Utah or in other states. While a
registration in Utah does not preclude those in other states from using an identical or similar mark, it certainly discourages those with an expectation of nationwide expansion from using
an identical or similar mark. Of course, a business operating in a region of the United States that is geographically remote from Utah with limited expansion plans may be comfortable with
the risk involved in using an identical or similar mark. However, a Utah registration should be particularly helpful in deterring others in close geographic proximity to Utah from using
an identical or similar mark because the risk of causing confusion is greater and the limitation on business expansion poses an even greater obstacle than it does for businesses that are
geographically remote.
Many of the rights possessed by owners of state registrations would already exist under common law. Under common-law rights, trademark rights extend only to
the geographical area of use. Accordingly, under common law, it may not constitute trademark infringement if a mark used only in one region of Utah is the same as or is identical to a
mark used in another region of Utah. While some states consider a state registration to be effective throughout the entire state, the law in Utah with regard to this matter is not yet
clear. However, at least one federal district court has interpreted a previous Utah trademark statutory scheme as providing statewide protection.13
While some states
give a state registration greater evidentiary effect by providing that a registration is prima facie evidence of ownership of the mark,14 Utah's procedural advantage in this regard is rather limited.15 Nevertheless, an owner of a mark that cannot or chooses not to take advantage of the benefits of federal registration would be well advised to obtain a state registration instead of relying solely on common-law rights. This becomes even more clear after considering the additional benefits available to owners of registered marks during litigation.
Infringement Remedies Available to Owners of Marks Registered in Utah
As mentioned previously, state registration provides less extensive benefits than federal
registration. However, Utah does provide for some significant infringement remedies. A Utah trademark registrant whose mark has been or is being infringed may seek an injunction
prohibiting the manufacture, use, display, or sale of the offending mark or goods sold in connection therewith.16 An infringement plaintiff may also seek profits derived from the wrongful use,17 damages that the plaintiff has suffered because of the wrongful use,18 and even an order of seizure and destruction of any copies or imitations of the plaintiff's mark.19 Moreover, if the court finds that the defendant committed the infringement "with knowledge" or "in bad faith," the court has the power to award punitive damages in an amount up to three times the profits and damages of the plaintiff, along with attorney fees.20
Infringement of a state mark in Utah generally conforms to the federal infringement guidelines.21 It occurs when another person or business uses, without the registrant's consent, "a reproduction, counterfeit, copy, or colorable imitation" of the mark "in connection with the sale, distribution, offering for sale, or advertising of any goods or services on or in connection with which that use is likely to cause confusion, mistake, or to deceive as to the source of origin, nature, or quality of those goods or services."22 Infringement also occurs when a person or business "reproduces, counterfeits, copies, or colorably imitates any mark and applies the reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles, or advertisements intended to be used upon or in connection with the sale or other distribution in [Utah] of goods or services."23 However, if the second form of infringement is found - i.e., if the mark was reproduced and intended to be used on or in connection with a sale or distribution of goods or services but was not actually used - lost profits and/or damages are not recoverable unless it is proved that the defendant had the specific intent to deceive or cause confusion or mistake.24
State Registration Procedure in Utah
Filing for a state trademark registration in Utah is relatively simple and inexpensive, particularly when compared with
federal registration. Under the Registration and Protection of Trademarks and Service Marks Act,25 which became effective on May 6, 2002, to obtain a Utah state trademark registration, an application must be filed with the Division of Corporations and Commercial Code (the "Division"), a division of the Utah Department of Commerce. Applications may be downloaded from the Division's Web site in PDF (Portable Document Format) file format at http://www.commerce.state.ut.us/corporat/pdfforms/tmapp.pdf.
The most notable application requirements are as follows: The application must specify "the goods or services on or in connection with which the mark is used" and
"the mode or manner in which the mark is used on or in connection with those goods or services."26 The application must also state "the date when the mark was first used anywhere" and "the date when the mark was first used in [Utah] by the applicant or a predecessor in interest."27 In addition to attesting that the mark is currently in use, the applicant must verify that to the applicant's knowledge, "no other person has registered, either federally or in [Utah], or has the right to use" a mark in the "identical form" as applicant's mark, or "in such near resemblance to the mark as to be likely, when applied to the goods or services of the other person, to cause confusion, mistake, or to deceive."28
The application must be accompanied by a filing fee and two "specimens," or samples showing the mark as actually used in the ordinary course of business.29 In other words, the Division is looking for samples of the mark as it appears on the goods, containers, tags, labels, advertisements, and/or documents as used by the mark's owner. For purposes of filing, it is acceptable to send photocopies of a specimen. Finally, if a registration application has previously been filed at the federal level with the U.S. Patent and Trademark Office, the state application must provide information relating to the federal application, including reasons for refusal if the federal application was denied. Once the application has been completed, it can be either hand-delivered or mailed to the Division, which is on the main floor of the Heber Wells Building, located at 160 East 300 South in Salt Lake City. The mailing address for trademark applications is Box 146705, Salt Lake City, Utah 84114-6705.
Assuming the application conforms to the statutory requirements, the Division will then examine the application for compliance with the statutory requirements.30 First, the Division will ensure that the application has been filled out properly and that all the requisite information has been provided. Next, the Division will perform a search of existing trademarks registered in Utah, specifically looking for marks that conflict with the applicant's mark. That is, the Division will look for registered marks and trade names that so resemble the applicant's mark that a likelihood of confusion would exist between the goods or services of the applicant and those of the identified mark. The search is not as extensive as one that would be performed at the federal level, and in fact does not include any search of the federal registration database. Accordingly, it is not uncommon for a state search to miss potentially conflicting marks. However, the search does at least provide some indication of the mark's uniqueness. Depending on the results of the search, the Division will then either certify registration of the mark31 or notify the applicant of the refusal and the reasons therefor.32 Should the application initially be rejected, the state registration procedure in Utah, like its counterpart at the federal level, allows for an applicant to reply to the rejection with arguments in response thereto and/or an amendment to the application itself.33
Procedures for Maintaining Trademark Registrations in Utah
Once a certificate of registration has been issued, assuming that the registration is not cancelled, it
is effective for five years after the registration date.34 After the five-year term has expired, it can be renewed for an additional five years, and renewals can continue every five years thereafter for as long the trademark is being used by its owner and the statutory requirements continue to be met.35 In other words, trademark registrations have the potential to exist in perpetuity. Renewals are attained by filing a renewal application, which is identical to the original registration application, at least six months before the expiration of the registration.36 Just like the original application, a renewal application must be accompanied by a regulatory fee.37 Additionally, the application must include "a verified statement that the mark has been and is still in use" and either another specimen or "a verified statement that the mark has not changed."38 Any registrations in effect before the current statutory scheme went into effect on May 6, 2002 continue for their term as it existed under the prior statutory scheme, which was 10 years, and are then renewable in accordance with the current scheme for additional five-year terms.39
Although mark registrations are theoretically renewable for a limitless number of terms, they may be cancelled for a variety of reasons. First, of course, a trademark
registration that has not been renewed will be cancelled.40 In addition, the registrant or assignee of a mark may submit a request for voluntary cancellation.41 A registrant might choose to have its mark cancelled, for instance, if the mark is no longer being used in commerce. If a registered mark is no longer in use, and its owner does not request cancellation, a third party may bring a court action to compel cancellation of the mark for abandonment. A mark is abandoned if it is no longer in use and its owner has no intent to resume its use, or if its "significance as a mark has been lost due to any course of conduct of the owner, including acts of omission or commission."42 Likewise, the Division will cancel registration of a mark upon a competent court finding that (1) the mark was granted improperly, (2) the mark was obtained fraudulently, (3) the registrant is not the mark's owner, (4) the mark has become a "generic" name for the corresponding goods or services,43 or (5) the mark is likely to cause confusion, mistake, or deception with respect to a mark registered federally with the U.S. Patent and Trademark Office before the filing date of the application for registration in Utah.44
Conclusion
Because trademarks can be such a valuable part of the assets of a business, it is important to develop and protect them. Although trademark registration in
Utah does not provide the level of protection or benefits provided by federal registration, given the ease and inexpensiveness of state registration it should not be overlooked as part of
a comprehensive trademark strategy, particularly for a mark that may be ineligible for federal registration.
Footnotes
1. 15 U.S.C.A. ¤1051(a)(1) (West Supp. 2003) ("The owner of a trademark used in commerce may request registration . . . .").
2. The interstate commerce requirement stems
in part from the necessary reliance on the Commerce Clause in Article I, Section 8, of the U.S. Constitution to provide a basis for the federal power to grant federal registrations. Like
Congress's Commerce Clause power in general, the power to regulate trademarks in interstate commerce is quite broad. Under the Lanham Act, the federal legislation dealing with trademarks,
"commerce" is defined as "all commerce which may lawfully be regulated by Congress." 15 U.S.C.A. ¤1127 (West Supp. 2003). In other words, even purely intrastate
activity is sufficient to invoke Congress's power if it "substantially affect[s] interstate commerce." United States v. Lopez, 514 U.S. 549, 558-59 (1995).
3. See, e.g., Larry Harmon Pictures Corp. v. Williams Rest. Corp.,
929 F.2d 662, 666 (Fed. Cir. 1991) ("It is not required that . . . services be rendered in more than one state to satisfy the use in commerce requirement.").
4. Id. at 663; see also In re Gastown, Inc.,
326 F.2d 780 (C.C.P.A. 1964) (holding that operator of intrastate service stations sufficiently affected interstate commerce to come within Congress's power under Lanham Act).
5. See, e.g., In re Conti,
220 U.S.P.Q. (BNA) 745, 748 (T.T.A.B. 1983) (holding mark used in connection with local barber shop as insufficiently affecting interstate commerce to qualify for federal registration).
6. 37 C.F.R. ¤2.34(a)(2) (2002).
7. Once a trademark examiner at the U.S. Patent and Trademark Office has reviewed such an intent-to-use application and concluded that it
is allowable, the applicant must verify within six months that the mark has been used in interstate commerce. 37 C.F.R. ¤2.88 (2002). However, the applicant can request additional time to
verify the use. The applicant can obtain extensions of the deadline for showing use in six-month increments for up to three years after the application has been considered allowable. 37
C.F.R. ¤2.89 (2002). Note, however, that any extension beyond one year after the decision regarding the acceptability of the application requires a showing of good cause. 37 C.F.R.
¤2.89(c) (2002).
8. As discussed in the "State Registration Procedure in Utah" section, the search performed by the state is not nearly as extensive as that performed at
the federal level.
9. The fee for filing an application for registering a mark in Utah is presently $20, as authorized at Utah Code Ann. ¤70-3a-303 (2002), whereas the fee for
filing an application for federal registration is presently $325, as indicated at 37 C.F.R. ¤2.6(a)(1) (2002).
10. In addition to the requirement that a mark is used in interstate
commerce, to be registered on the Principal Register, a mark must meet the requirements provided in 15 U.S.C.A. ¤1052 (West 1997 & Supp. 2003). For example, the mark must not so
resemble a mark owned by another when used on the goods or in connection with the services as to be likely to cause confusion or mistake as to the source of the goods or services. Also,
when used on the goods or in connection with the services, the mark must not be merely descriptive of the goods or services. A mark that does not meet the criteria for registration on the
Principal Register because of the mark's descriptiveness, but that is still capable of distinguishing goods or services of one source from those of another source, may still be registered
on the Supplemental Register. A mark registered on the Supplemental Register is entitled to use the ¨ symbol like a registration on the Principal Register to give notice to all that the
mark is federally registered. However, a registration on the Supplemental Register does not provide the rights of a registration on the Principal Register. 15 U.S.C.A. §¤1091-1096 (West
1997 & Supp. 2003).
11. Although verification can be achieved by an oath, most applications include a declaration instead of an oath. 37 C.F.R. ¤2.32(b) (2002). When a
declaration is used in lieu of an oath, the party must include a statement that "all statements made of his/her own knowledge are true; and all statements made on information and
belief are believed to be true." 37 C.F.R. ¤2.20 (2002). The declaration must additionally warn the declarant that willful false statements and the like are punishable by fine or
imprisonment or both under 18 U.S.C.A. ¤1001 (West 2000), and that such willful false statements and the like may jeopardize the validity of the application. This warning informs the
applicant that a verified statement cannot be truthfully made if the federal applicant has knowledge of a confusingly similar mark protected by a state registration.
12. In
accordance with 37 C.F.R. ¤2.33(b)(1) and (b)(2) (2002), it must be alleged in the verified statement that, to the best of the verifier's knowledge, no one other than the applicant has
the right to use the mark in commerce, either in identical form or in such near resemblance as to be likely to cause confusion or mistake when applied to the goods or services of another.
13. Nielsen v. Am. Oil Co., 203 F. Supp. 473, 477 (D. Utah 1962) ("By reason of the registration of the trademarks . . . in Utah . . . defendant is entitled, under the
statutory law of Utah, to the exclusive intrastate use throughout the entire State of such trademarks . . . .").
14. See 3 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition ¤22:1 (2003).
15. Utah merely provides that a certificate of registration will be "competent and sufficient proof of the registration of the particular mark." Utah Code Ann.
¤70-3a-304(3) (2002).
16. Id. ¤70-3a-404(1)(a) (2002).
17. Id. ¤70-3a-404(2)(a)(i) (2002).
18. Id. ¤70-3a-404(2)(a)(ii) (2002).
19. Id. ¤70-3a-404(2)(b) (2002).
20. Id. ¤70-3a-404(3) (2002).
21.In fact, the Utah statutory scheme provides that it "shall be interpreted to provide for the registration and protection of
trademarks and service marks in a manner substantially consistent with the federal system of trademark registration and protection" and that "a construction given the Trademark
Act of 1946 [(the Lanham Act)], 15 U.S.C.A. Sec. 1051, et seq., should be used as persuasive authority." Id. ¤70-3a-102 (2002).
22. Id. ¤70-3a-402(1)(a) (2002).
23. Id. ¤70-3a-402(1)(b) (2002).
24. Id. ¤70-3a-402(2) (2002).
25.S.B. 150, Gen. Sess. (Utah 2002) (codified at Utah Code Ann. ¤70-3a-101, et seq. (2002)).
26.Utah Code Ann. ¤70-3a-302(1)(c)(ii) (2002).
27. Id. ¤70-3a-302(1)(c)(iii) (2002).
28. Id.
29. Id. ¤70-3a-302(1)(c)(vi) (2002).
30. Id. ¤70-3a-303.
31. Id. ¤70-3a-304 (2002).
32. Id. ¤70-3a-303(5).
33. Id.
34. Id. ¤70-3a-305(1) (2002).
35. Id. ¤70-3a-305 (2002). Before the change was enacted in 2002, Utah state registrations were effective for 10 years.
36. Id. ¤70-3a-305(2).
37.The fee is presently $20.
38. Id. ¤70-3a-305(5).
39. Id. ¤70-3a-305(4).
40. Id. ¤70-3a-307(1)(b) (2002).
41. Id. ¤70-3a-307(1)(a) (2002).
42. Id. ¤70-3a-103(1)(a) (2002).
43. Generic marks are those that do not serve to distinguish a product or service
from others of like kind. In other words, a generic term designates a type of product or service rather than identifying a particular good or service within the genus. To put it
succinctly, a valid trademark can be considered an adjective and a generic trademark a noun. A trademark that once served to distinguish a product or service can become generic and be
cancelled for this reason. Aspirin and linoleum are but two examples of this - both started out as marks identifying a particular product and became generic marks identifying a type of
product.
44. Id. ¤70-3a-307(1)(c) (2002).
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