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What if I'm just now registering a business but it's product has already been in commerce?

Palm Coast, FL |
Filed under: Trademarks Business

This pertains to a trademark application. I am filing a trademark for something that is already being sold on goods, yet we are just now filing the trademark and business paperwork to make it legal. Is it illegal to have this already in commerce as far as the trademark office is concerned?

Attorney Answers 5

Posted

It is not illegal to use a unique mark on goods in commerce even though that mark is not yet registered with the USPTO. In fact, trademark rights arise from use, not registration. However, the wisest route is to do a trademark search before adopting, and using, a new mark in commerce. That would ensure that you are not infringing on a trademark that is already in use.

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Asker

Posted

What I actually mean is the product was being sold without any legal entity. Now I am partners registering the trademark. Is it penalty to register a trademark when product is already being sold but has no legal entity?

Bruce E. Burdick

Bruce E. Burdick

Posted

Not a problem. See prior comment.

Posted

Q: "Is it illegal to have this already in commerce as far as the trademark office is concerned?"
R: Not as long it's your company that's selling the product branded with the mark you're just now getting around to register. As noted by my colleague, registration is voluntary. Registration is a good idea because it confers significant benefits, but it's not required. As also note, you should have a trademark attorney "clear the rights" to the mark before you file your registration application. Once you file, anyone with a confusingly similar mark who moniters such filings will know about your use -- which puts you at a disadvantage. You should know who else is using a similar mark before you apply to register. Good luck.

The above response is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.

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Asker

Posted

What I actually mean is the product was being sold without any legal entity. Now I am partners registering the trademark. Is it penalty to register a trademark when product is already being sold but has no legal entity?

Daniel Nathan Ballard

Daniel Nathan Ballard

Posted

If Bob, all on his own, sold Widgets that he branded "Oofygoofy" but then took on some partners, formed Company X to sell the Widgets, and Company X decided to register the "Oofygoofy" trademark rights that is perfectly fine and the Trademark Office will not be concerned at all that the trademark rights were originally developed by Bob all on his own. Bob's own attorney [NOT Company X's attorney] needs to evaluate if Bob properly assigned his trademark rights in "Oofygoofy" to Company X and, if he did, whether he received adequate consideration.

Bruce E. Burdick

Bruce E. Burdick

Posted

Asker, this is not a major concern. You can transfer your use-based rights to the partnership. In fact, that may be to your advantage as a capital contribution that raises your stake if accounted for in that way. As Attorney Ballard notes, the PTO does not care because they have no reason to challenge your assertions as to use date and leave such challenges to third parties.

Daniel Nathan Ballard

Daniel Nathan Ballard

Posted

Bruce, your contribution is neither needed nor appreciated. If you have something to say then say it as a comment to your own response. The Questioner and I are doing fine without you.

Posted

Not sure I completely get your question. Is it legal to trademark a name that's already being used by you in commerce? Sure. In fact, that's one of the bases for trademarking a name, that you've been using it in commerce. Is it legal to allow a corporation to use a trademark that was in use before the corporation existed? Sure, that's a common practice.

The contents of this answer should be considered friendly advice, not legal advice (I'm a pretty friendly guy), and the answer should not be construed to constitute an attorney-client relationship. Also, if you liked this answer as much as my big ego thinks you did, be sure to click the thumbs-up button!

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Bruce E. Burdick

Bruce E. Burdick

Posted

I think what the Asker is wondering is how the use-based right he established can become the use-based rights of the partnership since they are not the same entity. The answer is it is done by a written transfer so there is a record that pre-empts later challenge. One way is in the partnership agreement, where the transfer can be a capital contribution of that partner. Another is by a simple assignment document. A third way is by license, but then the registration would continue to be held by the individual.

Posted

Your additional information in comments was: "What I actually mean is the product was being sold without any legal entity. Now I am partners registering the trademark. Is it penalty to register a trademark when product is already being sold but has no legal entity?"
First, you did have a legal entity. You as an individual are a legal entity, albeit a small entity or micro-entity. Second, the partnership can assume your use-based rights by transfer from you. If the partnership files a declaration of first use as of your date of first use, the USPTO will just accept it, as the USPTO has no basis to challenge it. You should have an IP attorney review this and get your documentation in order, however, as some counterparty might challenge your partnership declaration of use if you don't document it.

I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is at your sole risk. This is done without compensation as a free public service. I am licensed in IL, MO, TX and I am a Reg. Pat. Atty. so advice in any other jurisdiction is strictly general advice and should be confirmed with an attorney licensed in that jurisdiction.

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Posted

It does not matter to the USPTO whether the trademark was in use under a proper entity or not.

Further, whenever you endeavor into investing in a trademark it is very important that you conduct the proper clearance due diligence upfront and before you submit an application to the USPTO. In the US, this means searching under both federal (USPTO) as well as common law because trademark rights stem from use in this country NOT registration. This means that acquiring a federal registration does not necessarily mean that you are not infringing on another's intellectual property. See the link below for a detailed explanation of the due diligence process.

I suggest that you consult with a lawyer in private and discuss your objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with.

Best regards,
Frank
Natoli-Lapin, LLC

DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed with the law firm of Natoli-Lapin, LLC on the basis of this posting.

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