Entrepreneurs and other early stage companies sometimes approach us after having received a cease and desist letter from a company claiming that their trademark rights have been infringed upon. On occasion, these clients are particularly surprised to receive such a letter because they have a registered trademark.
Don’t be deceived: registered trademark holders can commit trademark infringement just like anyone else. Under United States trademark law, a registered trademark holder has nationwide protection over its mark (and all marks confusingly similar to its mark), but these registrants don’t have priority over registered or unregistered marks that have prior use. That’s right, an unregistered senior user can send a registered user a cease and desist letter. What’s more, this same unregistered user can sue a registered junior user for trademark infringement in federal court.
Consider the following example. JAYLAW is a law firm without a trademark registration. It began using its mark in commerce in New York in 2005. In 2010 it expanded to California. It has two offices, in New York and California, and primarily serves clients in the areas of copyright and trademark law. It has a significant reputation nationally among those requiring IP services. In 2016, J-LAW, a well-funded venture backed AI startup, launched its own operations. J-LAW is a software platform that uses artificial intelligence to render advice to its users regarding copyright and trademark law. J-LAW applied for and obtained a trademark for the term J-LAW. Under these facts, assuming there’s a likelihood of confusion between the marks, JAYLAW would be able to stop J-LAW from using that mark in the geographic regions in which JAYLAW practices — most likely, NY and CA.
This result is not necessarily intuitive. Many entrepreneurs mistakenly believe that a registered mark protects them against anyone, both defensively and otherwise. That is simply not the case. The above example isn’t an unlikely occurrence. Therefore, all entrepreneurs should make sure that their trademark lawyer is conducting competent clearance searches in advance of filing a registration with the USPTO, and, frankly, in advance of using a mark in commerce in the United States. A failure to properly search a mark could result in substantial economic and non-economic hardship for any growing brand.