First-to-use vs First-to-file

Trademark Rights: First-to-use vs First-to-file

Trademark priority is a complex term when it comes to two major concepts: First to use vs first to file. It depends on which country your mark is originally registered in to qualify for either of the given elements.

First-to-Use Trademark System

In a first-to-use trademark country, as long as proof can be shown, the right to register a trademark belongs to the person who first used the mark in commerce. It does not depend on if or when an application to register the trademark was filed.

Prior User vs. Junior Registered User

A registered trademark user has the exclusive right to use the trademark nationwide for the goods or services in association with the trademark. The only way for a prior user to defeat this presumption is if that individual can show they used the trademark before the registrant’s date of filing. Also, if the prior user acquired common law rights of using the trademark in their geographic location of use. Prior users have significant protection under the Lanham Act.

The Lanham Act is the primary federal trademark statute of law in the United States. Since Section 22 of the Lanham Act gives the registrant nationwide priority, the prior user can only gain rights in the geographic location of use. In some instances, prior users can gain rights in the zone of natural expansion. If the prior user’s rights are based on an application that precedes the subsequent user’s application, then the prior user entitles to nationwide priority.

However, it is still vastly important to have a federally registered trademark. A registered trademark gives priority to use as of the date of application and comes with important and valuable tool of nationwide constructive use.

How to protect Unregistered Trademark?

  1. The party claiming an unregistered trademark must possess a reputation or goodwill in its mark. More specifically, the business with an unregistered trademark must provide some sort of evidence. For instance, surveys from consumers and advertisements predicting the good and long-standing of the business.
  2. More importantly, it depends on market reputation to determine the scope of protection allotted to an unregistered mark. Let’s say the unregistered mark is only recognizable in a specific geographical area. In that case, the parameter of protection will be specific to that geographical area only.
  3. The owner of an unregistered mark must prove that it has suffered actual harm or is likely to suffer actual harm as a result of the infringement. This requires the unregistered mark owner to furnish evidence. The evidence must show that the adverse party’s activity poses a threat to the unregistered mark owner’s business.

First-to-file Trademark System

According to the first-to-file trademark system, applicants that are first to apply for registration of their marks avails trademark rights and priority over the applicants who have started using the mark first in commerce.

Most countries in the world are the first-to-file countries for trademark registration. Therefore, the right to register a trademark lies with the first to file regardless of who used it first. This means that registering your trademark is the only way to protect your brand’s reputation in those countries

Drawback: First-to-file system inadvertently encourage “trademark squatters” to register potentially lucrative marks. They do so to hold them hostage to the highest bidder. Also, they do not have any intent to ever use the mark in commerce themselves.

This means that if your company was not the first to file in a first-to-file country, it may need to buy or license the trademark from the existing trademark owner. Another option is to rebrand its products for that market.

You can avoid this problem by making sure that you register your trademark in these countries before anyone else.

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