Clients often inquire whether it’s in their best interest to register their trademarks with the U.S. Patent and Trademark Office (“USPTO”).
The traditional short answer is: ”Yes, if at all possible, you should register your trademarks!” This advice has been widely echoed by qualified intellectual property attorneys.
However, the reality of this economy is that small businesses, non-profits and individuals aren’t able to do everything a lawyer says they SHOULD do. In this economy, the bottom line counts now more than ever. Money spent on obtaining a trademark registration is money not spent on other aspects of your business, like R&D, Marketing or Payroll. As such, I often find it helpful to discuss with clients not only what they SHOULD do, but what they CAN do and what they MUST do.
The purpose of this post is to give you additional financial information with which you can decide whether to register your trademarks. Some lawyers will tell you it’s “expensive.” The same lawyers might tell other clients that it’s “not expensive.” I’ll provide some real numbers that you can actually put into your budget.
First, keep in mind that registration of trademarks is not required. Common law rights arise naturally from actual use of a trademark. Generally, the first entity to either use a trademark in commerce or file an intent to use application with the USPTO has the ultimate right to use and registration. However, filing for and receiving a federal trademark registration on the Principal Register provides several advantages:
- constructive notice to the public of the registrant’s claim of ownership of the mark;
- a legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration;
- the ability to bring an action concerning the mark in federal court;
- the use of the U.S registration as a basis to obtain registration in foreign countries; and
- the ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods.
Optimally, all trademark owners who consider their trademark a valuable business asset (…and, if not, why continue using the mark?) would like to obtain these advantages. But registration is not free. Here are some of the likely fees (based on the USPTO’s current Fee Schedule, last revised January 1, 2017) that you will face before and during the registration procedure:
Clearance Search – Before adopting and using a trademark, it’s advised that a trademark clearance search be performed to determine the availability of the trademark. This will help determine whether there is another user already using the trademark, i.e. having superior rights in the trademark. By performing an initial trademark clearance search, a business can avoid incurring liability for trademark infringement and avoid investing resources in a trademark which could be unusable because it infringes another’s trademark rights. Most attorneys will conduct a clearance search at their standard hourly rate. Expect the clearance search to cost $200-400.
A commercial research service like Thomson CompuMark, which conducts a search across numerous databases (federal, state, common law, business databases) will cost around $700. Add attorney time to review and report on the results.
Application Filing Fee – The official filing fee ranges between $225-$400 (based on the goods/services selected, paper submissions cost more than applications filed online). Your attorney will charge a fee for the application preparation and filing, likely ranging between $400-$1000.
Response to Office Action – Office actions are letters from the USPTO that set forth the legal status of a trademark application. Typically, the examining attorney will set forth various requirements that the applicant must meet before an application can be approved for publication. A majority of your attorney’s time in the application process will be spent reviewing and responding to the office action.
Looking into the future, you’ll want to keep in mind the renewal costs which will be paid after five (5) years. Expect to pay $300 for each class of goods and services that your trademark protects. (For example, if a band has registered its band name for both “musical services” and “t-shirts,” it will be paying filing fees for two separate classes of protection. This applies to filing fees also.)
Notwithstanding the renewal costs, and assuming that no extensions, etc. are required, you’re looking at approximately $800-$1000 to file a federal application for one trademark protecting one class of goods/services. On top of the USPTO fees, you’ll be paying your trademark attorney for time spent preparing documents and communicating with the USPTO. Therefore, choosing a trademark attorney who provides excellent service at a lower cost can greatly enhance your bottom line. Also, these are just some of the more common fees you will face in registering your trademark…there may be additional filings/costs associated with your trademark registration, depending on the specifics of your trademark and the strategy of your attorney.
So, should you register your trademark??? The traditional answer still rings true…if fiscally possible, do it. Trademarks are valuable business assets that are typically far greater in value than any costs associated with registration. Always bear in mind that economies rise and fall, but trademark rights can continue indefinitely. Unfortunately, that means that spending less today to protect your trademark rights may allow another party to intervene and lock up important trademark rights for the future. Also, be sure to consider how licensing opportunities might be affected should you not register your trademarks.
Final practical note: Any time you claim rights in a mark, you may use the “TM” (trademark) or “SM” (service mark) designation to alert the public to your claim, regardless of whether you have filed an application with the USPTO. It’s free and reinforces good habits among those wearing the “marketing” hat.