If you ever find yourself driving through Mattoon, Illinois, and happen to get hungry, you may consider grabbing a quick meal at Burger King. However, this is not the Burger King you might be thinking of. Rather, it is a “mom and pop” restaurant opened by the Hoots family in the 1950s that is still in operation today. You may well ask how this restaurant has avoided a pricy lawsuit from the more familiar franchise of the same name. The answer is that they didn’t avoid the lawsuit, they both won and lost it (more on this below).
A federal registration is the gold standard of trademark protection. However, there are circumstances where a state registration or even common law protection may take priority. State registration refers to a trademark registration at the state, rather than federal level, while common law protection stems from mere use of the mark. The United States, unlike many other countries, grants trademark protection through mere use, even absent registration – this is called a common law trademark. These trademarks grant the owner exclusive rights to the mark within the geographic area where it is used (and perhaps a reasonable zone of potential expansion), but the protection is typically limited compared to federally registered trademarks.
Trademark disputes can arise when a business has been using a common law mark before another entity acquires a federal registration for a similar or identical mark. As mentioned above, a common law trademark holder’s rights are generally confined to the areas where the mark has been used in commerce. In contrast, federal registration provides nationwide rights, even in areas where the mark has not been used. This can lead to conflict if the holder of a federal registration and the holder of a common law mark have a dispute over use.
In these cases, courts typically examine factors such as the first use in commerce, the extent of the common law use, and the geographic reach of that use in comparison to the federal registrant’s rights. If the common law mark was in use first and has established a strong presence in a particular region, the common law user may be able to argue for priority, even against a federally registered mark. However, federal registration is a strong presumption of the registrant’s nationwide rights, making it challenging for a prior user of a common law mark to assert superior rights without significant evidence of prior use and recognition. Ultimately, disputes between common law and federally registered marks often hinge on the specifics of the use and the level of recognition that each party has achieved in the marketplace.
Federal registrations require use in interstate commerce; that is, commerce across state lines. However, state registrations afford registered trademark protection to trademarks that are used only within the bounds of a single state and may be an option if your mark is not in use in interstate commerce. If a state registration is acquired, and the date of first use of the mark in that state precedes the date of first use of a later-filed federal registration, you might reasonably assume that that state registration will take priority within the bounds of that state.
However, this is not always the case, bringing us back to the Hoots family. The Hoots family did seek to protect their trademark, by filing a state registration – their lack of interstate use prevented a federal registration. When the Burger King that we know today obtained a federal registration and began opening locations across the country (including in Illinois), the Hoots family was not happy. The Hoots family filed suit in state court, and their Florida-based competitor countered with a federal suit. The Hoots sought to establish their exclusive rights to the mark within the state of Illinois. Ultimately, the courts found that the federal registration of the Florida company superseded the state registration held by the Hoots; because the court found no intent by the Hoots family to use the mark outside of their current market, they refused to respect exclusive state-wide rights to the mark in the face of federal registration. In the end, the Hoots obtained a partial victory and suffered a partial loss. The court recognized their sole and exclusive right to use the Burger King mark within a 20-mile radius of their location but gave the competing federal registration priority rights through the remainder of the state.
The trademark rights and priority afforded by common law rights and by state and federal registrations can seem both contradictory and confusing. If you have any questions about obtaining, protecting or defending your trademark rights, the team at Way Law is here to help you navigate the complexities!