Unregistered Brand Names in the Commercial World
- Trademark Clearance
No matter the region in which your business operates, the benefits of registering a trademark for your brand are myriad. However, unregistered use of brand names is still common, and, in some cases, there are sound business reasons for so doing. In cases where your product is intended to have a short life cycle, for example, the costs and administrative efforts of applying to register a mark for a product that may no longer be in use by the time the registration process is complete is not a viable prospect. In this example, clearance to ensure that you will not run into difficulties during the short life of your product is still to be strongly recommended.
How Does an Unregistered Brand Come into Being?
There are several ways that the use of an unregistered brand comes into being. In the above example, the brand would have been cleared for use but intentionally not registered as the registration itself would substantially exceed the intended life of the product. There are also cases where a mark has been registered but the registration has expired due to lack of renewal at the appropriate time although it is still in use by the company who previously registered it. While the registration has lapsed, the business that is still using it would have substantial rights in the name and it is something to bear in mind when coming across expired names in your clearance search.
As it relates to brand names that are used but have never been registered, there is still variation to be found. There are those where a thorough clearance search was carried out, but no registration was ever sought (and those who proceeded to use without a clearance search at a minimum — a strategy which is universally considered to be an extremely risky one!) and those who attempted registration but had their application refused due to likelihood of confusion with an existing trademark and continued to use the brand irrespective of the outcome. There may even be businesses who appealed the decision of the relevant Intellectual Property Office (IPO) and upon losing the appeal, persisted in the use of their chosen brand.
All these strategies employed by companies in the creation and use of brand names and trademarks ought to be borne in mind during both your clearance and monitoring processes. These are brand names in use but not registered which may prevent the successful registration of your proposed new brand or infringe upon your existing one and they can be somewhat more difficult to find than registered trademarks.
These are shark-infested waters with many dangers lurking for the unwary. Of note are the strategies used by those who attempt to register a new trademark, are refused on the grounds of likelihood of confusion, and continue to use the mark for their goods or services anyway.
The question is, in the event of a dispute related to your use of that mark, how much weight will a court apply to the refusal on the grounds of likelihood of confusion by your domestic IPO? As so often, the answer is….it depends!
In the U.S., there are a variety of Court Circuits and there is no one consistent answer across all those circuits. The concept of ‘issue preclusion’ applies in some of them but not all. Issue preclusion (still sometimes referred to as collateral estoppel in various regions) means that where a particular statement of fact has been decided in a previous court proceeding, it cannot be reopened as a question in a new court proceeding. So, if the judge in Case X decides based on the evidence provided that the sky is blue despite your assertion that it is red, you cannot put forward the argument that the sky is red in a different and subsequent case.
Where a USPTO refusal has been appealed and the refusal has been upheld, issue preclusion would prevent you from making the claim that there is no likelihood of confusion between the two brand names at issue. This creates some difficulty in defending the use of the brand name. But what about the refusal from the USPTO itself? Opinions are divided with some court circuits finding that the refusal by the USPTO in its own right meets the criteria for issue preclusion where others do not. More globally, there is a wide variation in how this issue is viewed and managed.
Ultimately, it needs to be clearly understood that unregistered use of a brand is, in virtually every case, inherently less safe than the use of a registered one. The extent of the danger to your business depends on the strategies and decisions employed. Early, well-advised and considered development of a branding and trademark strategy by companies of all sizes is to be strenuously recommended!
Efficiency starts with a robust knockout or preliminary trademark search that quickly gives you strong brand candidates to take forward to clearance.
Spend your time on the names that matter and not the ones that don’t.