Trademark law has its foundation in fair trade. It is meant to promote fair competition by creating protections for words, marks, and logos which have come to be associated with a certain company or brand. After all, it would be unjust to both the company and the consumer to allow a competitor to sell a low quality “knock off” product under the guise that it were the original.

The purpose of a trademark is twofold: (1) to allow consumers to easily identify a company’s goods or services, and (2) to protect the reputation and goodwill that company has built around its name, mark, or logo. For example, Paper Mate pens are my favorite. They always write smooth, they’re affordable, and I like their weight and balance. So, when I go shopping for such pens, that is the brand I buy. I can easily find my brand of pen on the shelf because the little Paper Mate man is right there on the packaging. When I see the Paper Mate man I know I am getting the same product I have come to love. However, if a competitor were to put the little man on its product, it would not only cause me to possibly buy a different pen (one in which I might not be satisfied) but it would also take sales away from Paper Mate, thus harming both me and Paper Mate. This would be a trademark infringement, and it would be actionable by Paper Mate. In this way, trademark law protects both consumers and sellers.

It is important to note that trademark law protects brand identification, not functional design. There have been times where companies have claimed trademark infringement because competitors have adopted the functional design of their product. However, courts have consistently ruled that such disputes fall within the purview of patent law, not trademark law. The test of whether a design or feature in a product is functional (versus something that can be protected under trademark law) essentially boils down to whether the design or feature is associated with the identity of the producer/seller of the goods/services, or whether it serves to create some other, non-reputation-related competitive advantage. So, if the design or feature is likely to cause customer confusion as to the source of the goods or services, then it is more likely to be protected as a trademark or trade dress.

Finally, except in certain unique cases, for trademark rights to be protected under state and federal statutes and common law, those rights must be exercised in commerce. In other words, trademark protections arise out of use of the mark, not mere adoption of it. Courts have consistently held that a person or company cannot successfully bring an action for trademark infringement if it has not established that it is using the subject mark for the sale of goods or services in the territory where it claims the infringement has occurred. So, a company that sells coffee mugs in Maine under the mark “Mother Mary’s Marvelous Mugs,” but who has no nationwide footprint (nor advertises outside of Maine), would likely be unable to prevent a company in Arizona from selling coffee mugs under the same mark. This is because the Maine company has no reputation to protect in Arizona, nor would Arizona consumers be confused, or “hoodwinked,” into buying “knock off” mugs.

It should be noted, the above common law principle does not necessarily apply when a trademark has achieved registration in the federal registry through the United States Patent and Trademark Office (USPTO). Once a mark is registered federally, it enjoys “constructive use” throughout the country. As a baseline, of course, before it can achieve registration, the mark must actually be used in commerce; but once registration is achieved, the mark can be protected outside of its local territory. So, in the same example given above, if the Maine company has registered “Mother Mary’s Marvelous Mugs” through a USPTO application, it might successfully assert its rights against the “knock off” in Arizona (unless the Arizona company had made a good faith use of the mark prior to the federal registration, which would add yet another layer of complexity to the court’s analysis). In any event, obtaining federal registration can provide a powerful advantage when it comes to protecting and enforcing trademark rights.

Strong trademarks and trade dress protect both companies and the consumers who buy from them. Establishing and protecting its marks can be an invaluable tool in the repertoire of any successful business entity. On the other hand, failing to do so leaves one exposed to unfair competition.