Federal trademark potential of a name already used in a local context

[Comcommittal]

What is the name of your state?What is the name of your state? NH

I'm starting a new business in the extremely crowded field of web design / development and related services. I'll be marketing my business nationally via the Internet.

I've been struggling for months to create an identity for my business that doesn't interfere with an existing trademark.

I'm at the end of my rope. My frustration level is out of control, my patience at an end

Yesterday I had an idea for a name and checked it out. At first I didn't think it was being used, but I ended up finding a company using a substantially similar name, for the same G&S.

If not for the fact that I'm entering such an extremely crowded field, with such a low barrier to entry, I would be happy to choose a name that was completely free and clear. Unfortunately, that's proving to be a practical impossibility. Some of the names I've considered, I've easily found used 6 or 10 times over by different companies offering similar G&S. It seems to be an accepted practice in the field.

Now, this latest name that I thought of yesterday. First of all, I believe the name qualifies as a trademark, so please go on that assumption. The company that is using it doesn't use any of the trademark notation -- ®, TM, or SM on their website. (The USPTO TESS system is down right now, so I haven't searched the federal registrations yet, but assume this company hasn't registered the name as a trademark.) And, they seem to market themselves to their local area.

I don't want to name names for the moment. In the following examples I've substituted generic placeholders for the actual location names.

Paraphrased from their homepage:

XYZ web design - {City}, {State} & the {surrounding area}

Their listing in Google displays their home page title and description. Paraphrased:

XYZ web design - {City}, {State} Web Designs
XYZ web design {City}, {State} - The best web design in the {local area}

The keywords they have associated with their site include prominently the name of their home city, nearby cities, and the local zip code.

Examination of their portfolio indicates that their clients are from the local area, within their home state and a neighboring state.

All of this says to me that they see themselves as a local business, that I was able to find out about only because their website, like all websites, whether for a one-off mom and pop store or an international conglomerate, is available worldwide.

Where do you think I stand from a legal / ethical perspective in terms of using this name for my business and pursuing federal trademark registration?

 

[davezan]

Now, this latest name that I thought of yesterday. First of all, I believe the name qualifies as a trademark, so please go on that assumption. The company that is using it doesn't use any of the trademark notation -- ®, TM, or SM on their website. (The USPTO TESS system is down right now, so I haven't searched the federal registrations yet, but assume this company hasn't registered the name as a trademark.) And, they seem to market themselves to their local area.

I think this will help answer your question:

http://www.bitlaw.com/trademark/common.html

Trademark rights arise in the United States from the actual use of the mark. Thus, if a product is sold under a brand name, common law trademark rights have been created. This is especially true once consumers view the brand name as an indicator the product's source.

The term "common law" indicates that the trademark rights that are developed through use are not governed by statute. Instead, common law trademark rights have been developed under a judicially created scheme of rights governed by state law. Federal registration, a system created by federal statute, is not required to establish common law rights in a mark, nor is it required to begin use of a mark. However, federal registration, if available, is almost always recommended and gives a trademark owner substantial additional rights not available under common law.

Common law trademark rights are limited to the geographic area in which the mark is used. Thus, if a coffee blend is sold under the name BLASTER in California only, the trademark rights to that name exist only in California. If another coffee retailer begins to market a different blend in New York under the same name (assuming they had no knowledge of the California company), then there would be no trademark infringement. However, if the New York company attempted to sell their coffee blend nation-wide, they would discover that the California company's common law rights to the mark would prevent them from entering the California market.

Since no registration is required in order to establish common law rights to a trademark, it can be difficult to discover whether anyone has trademark rights in a particular mark. This is the legal background for the difficulties and expenses involved in trademark clearance searches. If registration were required for trademark rights, clearance searches would only need to examine trademark registers. Under U.S. law, however, an attempt must be made to discover these common law rights.

 

[Comcommittal]

Yes, that's very relevant. Thank you. I am familiar with all of that information. However, I don't believe trademark law has kept pace with technological progress. Specifically I don't think it accounts for the impact the Internet has had on the way business is conducted.

If another coffee retailer begins to market a different blend in New York under the same name (assuming they had no knowledge of the California company), then there would be no trademark infringement.

I don't believe that "assuming they had no knowledge . . . " stipulation is correct.

Like the article says in the first place

. . . if a coffee blend is sold under the name BLASTER in California only, the trademark rights to that name exist only in California.

In the situation it describes, it's my impression that another retailer could market their BLASTER coffee in New York, anywhere but California for that matter, knowing full well about the California BLASTER without infringing. Otherwise, why would there be state trademark registrations? Correct me if I'm wrong.

I'm pretty confident that I'd be on solid legal ground to use the name as I described, with the possible exception that, at the most, I'd have to steer clear of 1 or 2 states which I could easily afford to sacrifice.

I'm really more ambivalent about the ethical implications. I really don't want to step on anyone's toes, but the reality is that there's very little room to maneuver in this space and I've had it with getting shut out of every imaginable name. (Especially by companies that are doing half assed work.) And believe me, I've tried a lot of names. If it was possible to choose something completely unique, I would, but I don't believe it is possible.

Now with this latest idea, the one company that is using it really seems to be a local business, so I don't see why they should even care if I use it nationally. It's certainly not a situation where I'd be trying to capitalize on any association they had built with the name (which is certainly negligible).

Frankly, I believe the existing trademark scheme comes up way short in accounting for the effectiveness of domain names in differentiating the source of G&S.

 

[davezan]

He he he, you got that right about the law not having caught up with tech
changes.

I don't believe that "assuming they had no knowledge . . . " stipulation is correct.

It is. The tough part is proving the other party knew what it was doing yet
went thru with it anyway.

Frankly, I believe the existing trademark scheme comes up way short in accounting for the effectiveness of domain names in differentiating the source of G&S.

Not quite. There is, in fact, an administrative proceeding designed specifically
for the purpose of resolving domain name - trademark infringement cases: the
Uniform Dispute Resolution Policy (UDRP).

Aside from that, you've also got the Anticybersquatting Consumer Protection
Act (APCA).

You're familiar with those, then?

 

[Comcommittal]

It is. The tough part is proving the other party knew what it was doing yet went thru with it anyway.

That doesn't even make sense. If that's true, then what is the meaning of

Common law trademark rights are limited to the geographic area in which the mark is used. Thus, if a coffee blend is sold under the name BLASTER in California only, the trademark rights to that name exist only in California.

Yes, I'm familiar with the domain name issues. My point is that with this type of business, any mention of the company will be accompanied by the domain name, which in my mind is a pretty effective way of differentiating the source of G&S.

 

[Comcommittal]

Hey davezan, what do you think of this (make sure it jumps to the "Nationwide Priority" heading.

If this information is accurate, it means that in my situation I could use the mark, register it, and even prevent the other business from expanding outside of the local area they operate in now.

 

[davezan]

Sorry, Comcommittal, just came back from R&R.

What I meant from my last post is if company B knew that company A is doing
business in the area in the same filed yet went ahead using the same or even
similar name, then yes they're possibly infringing on company A's common law
trademark. But the tricky part is that company A must somehow prove that
company B knew that yet went ahead.

I'll admit I'm still learning about trademarks. But I have to since it involves
domain names anyway.

I'm checking out that link, thanks!