98 Percent of Trademarks in the U.S. Are Never Registered

98 Percent of Trademarks in the U.S. Are Never Registered

Only an estimated 2% of trademarks are ever registered with the U.S. Patent and Trademark Office.

I’m sure this surprises a lot of people, but it’s not a misprint. A full 98% of trademarks don’t have federal trademark protection, and that’s a conservative calculation; the real number is probably higher.

So why is this? There are three main reasons:

  1. It’s expensive – It costs $225 to file the most basic electronic form of a federal trademark application. If you’re not comfortable filing the application yourself, you need to hire a lawyer, turning a few hundred dollars into a thousand or more.
  2. It’s complicated – If you have all of the relevant information about your mark at hand, it will still take 60-90 minutes to complete your application.
  3. It’s slow – An examining attorney won’t even read your application for 3-6 months after you file. Then, you may have to make amendments to your application based on what the examining attorney finds. Then any changes would have to be approved. All told, it could be another 6 months until your registration is granted, and a significant percentage of applications are never granted registration.

Let’s consider a software startup. They practice lean startup methodology, are live testing a MVP with paying customers, and using a company name that they agreed on just to start testing their product. Every dollar they make either gets reinvested into the company or goes towards the living expenses of the founders. Spending $1,000 to protect the name of a company or line of products – that a) might not be around in five months and b) might change names in the near future – simply isn’t an option. So they do nothing to actively protect one of their most important assets: their trademark. This leaves them vulnerable to someone accidentally, or intentionally, using the same mark.

Or, consider a big corporation with extensive product lines, like a clothing company. They produce thousands of articles of clothing every year, each with their own unique name (trademark). Even the wealthiest corporations can’t or won’t justify spending $1,000 per mark to register every single article of clothing. Many of their products are seasonal, and regardless of cost, a federal trademark application wouldn’t be approved until the clothes were so last season.

For many companies not registering is a matter of cost and practicality. Some businesses don’t require federal registration because they’re not doing business outside of their immediate geographic region. A deli or a dry cleaner will almost never require federal registration. Since they do business locally, many of the benefits of federal registration are unnecessary (like having the ability to register with U.S. Customs to prevent the importation of counterfeit goods).

But that doesn’t mean these businesses shouldn’t do something to claim their trademark rights. All three types of companies described above will have earned common law trademark rights for those “unregistered” marks – simply by using their name in commerce (i.e. they’re making sales under that name). When hundreds or thousands of dollars and a ten-month waiting period aren’t viable options, companies can use Cognate to register their trademark rights. Without breaking the bank, they can make an explicit and public claim of their ownership of their rights and put potential infringers on notice. Trademark registration doesn’t have to be a luxury reserved for only 2% of brands.

For businesses that do have the time and the financial resources, a federal trademark registration with the USPTO remains the gold standard in trademark protection. Federal trademark applications can be filed online using the Trademark Electronic Application System (TEAS). The TEAS page also contains information designed to help businesses decide if filing for a federal trademark is right for them (of course, one of the first suggestions is to hire a lawyer).

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