Who is the owner of the trademark? Priority and Senior User Disputes

Introduction

There is often a dispute as to who owns a trademark. For example, the other day, I received a call from a trademark owner who had a registration from the USPTO. In the same time, somebody else, a competitor, was claiming ownership of the same trademark. The caller was adamant that the trademark was his, since he has the trademark registration. However, the competitor was also claiming to be the owner since, apparently, they were the ones who started to use the mark first, about four or five years before the caller, i.e., the trademark registration owner.

Discussion

So, who is right in this scenario? The caller has the registration. The USPTO granted him the registration. Is it possible, that the owner of the registration it's not the owner of the trademark? The answer is yes, that is possible. It depends on the activities of the competitor before the caller filed for registration with the USPTO. Those activities include sale activities and marketing activities.

Because the competitor used the trademark first, it may be enough under U.S. trademark law for the competitor to be found the actual owner of the trademark and actually enable the competitor to cancel the registration of the caller and even ask for and be awarded damages for trademark infringement. That is because U.S. trademark law recognizes the first user of the mark as the owner of the mark if that first user - and that is a big IF - can show sufficient market penetration before the caller in this case filed for the trademark registration with the USPTO. To do that the competitor will need to show sufficient and continuous sales with respect to the market size for the particular product, sufficient advertising expenditures and sufficient expansion activities. In other words, priority in terms of first in time to use the trademark in commerce may not necessarily always amount to priority in ownership of the mark. The extent or the magnitude of that prior use of the mark matters in this type of trademark ownership priority analysis.

Bottom line, just because you have a trademark registration, it doesn't necessarily mean that you indisputably own the mark. The registration itself can be challenged under certain circumstances and even cancelled. That doesn't mean you should not always try to get a trademark registration, since one advantage of that is that you would be presumed to be the owner of that trademark. If you also do some reliable trademark clearing searches before adopting and registering the trademark, and such searches come out positive, there is a stronger basis for the presumption that you are the owner of the mark.

Conclusion

So, before asking the competitor for a lot of money in order to allow them to coexist and use the same mark in the marketplace, it may be wise to ensure that your ownership claims are defensible in court.