The term “common law” indicates that the trademark rights are developed through use and not governed by statute.
Trademark common law rights attach to a trademark once the trademark is associated with your products or services in a geographical area.
In Canada and the US, if a business that does not register its trademark, it can still have first priority on the name in the geographic area in which it sells its products or offers its services if it was the first to establish common law trademark rights (i.e. if it was the first one to use this particular trademark).
How do you establish common law rights?
Start a business and sell products or services under your brand (trademark). It is pretty simple.
Because common law rights arise as soon as you begin using your mark, simply offering for sale products or services will begin to establish trademark common law rights.
These are trademark rights that are enforceable in courts. However, without a trademark registration, your damages may be limited.
Further, common law trademark rights are based on first use. If you are trying to sue someone with a similar name make sure you are the first user. If you are not the first user, you will be the one who may be infringing, and you will be the one who will need to re-brand.
Benefits of common law trademarks
Common law trademarks stop competing businesses in your area / geographic location from using an identical or similar trademark that could confuse or mislead potential consumers. You can sue a local competitor for damages if they start using your mark. If you win, the other business will also have to stop using your mark.
If you’re the only one using the trademark, there is no confusion among consumers. Customers won’t accidentally visit a competitor shop believing it’s somehow linked to yours.
Common law trademark have limitations
Common law trademark rights are limited to the geographic area in which the mark is used.
For example, if you sell doughnuts in the vicinity of Orlando, Florida, the trademark rights to that name exist only in Orlando, Florida.
If another doughnut retailer starts selling different types of doughnuts in Detroit under the same name (assuming their use was bona fide), then there would be no trademark infringement.
However, if the Detroit company tried to sell their doughnuts on a federal level, they would discover that the Florida company’s common law rights to the mark may prevent them from entering the Florida market.
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