A pal and I walked across the parking lot at the Maryland State Bar Association conference last month looking for a lunch joint; the topic of our conversation was whether and why copyright and trademark registrations are necessary and beneficial.

My bud correctly pointed out that a trademark acquires common law rights as soon as it is used on goods or services, and a copyright exists as soon as the work is fixed in a tangible medium of expression. The bulb over my head lit up; my June column was born. I offered to buy him an adult beverage, or two, for the idea.

“You’re correct,” I said. “Both copyrights and trademarks exist without registration, but registration of both confers substantial and valuable rights.”

For example, to encourage registration of a copyright, an infringed would-be plaintiff can’t even file suit until the registration issues. Once it does, the registration is prima facia evidence that the copyright is valid and that the registrant is the owner, although both of these presumptions are rebuttable.

Of greater importance is the ability to collect statutory damages of up to $150,000 per work infringed, and attorney’s fees. However, an absolute prerequisite to being eligible for fees and statutory damages is that the registration must occur prior to the infringement, or within three months of first publication if infringement occurs after publication.

“The availability of statutory damages and attorney fees causes many cases to settle,” I explained.

As to trademark common law rights, the owner has the exclusive right to use the mark in the territory of use, and where use may reasonably expand in the near future, but a registrant has a national priority of use.  I explained from experience it can be hard to prove the extent of the territory at the time another registered the mark.

“There are many benefits to registration that an unregistered mark does not enjoy. If someone adopts the mark in a distant market after registration, the national priority allows the  registrant to boot that user even years later when it enters the market. My friend offered, “that would be extremely valuable to a client that intends to franchise or sell nationally, especially with our internet-based economy.”

That means that a registrant using the mark outside the territory can  freeze the use of an unregistered mark to  the client’s territory at the time of filing. That would be a really bad result for a business that spent money to build nationwide goodwill in a brand.

A registered mark generally becomes incontestable if it has been used continuously on the goods or services for five years, subject to a few exceptions. The mark can still be attacked on grounds of abandonment, fraud, genericism and misuse.

Registration prevents state bureaucrats from interfering, say by creating zoning laws that restrict how a mark is displayed, but in different circuits your mileage may vary. And, as with copyright, a trademark registration creates a presumption of ownership, nonfunctionality and validity; if not registered, the burden of proof is the mark’s owner.

This means that a registrant need not establish, in an infringement action, validity, nonfunctionality or ownership. This results because the mark has undergone a rigorous examination at the USPTO, and would not have been registered if not considered eligible.

“We can debate how important the right to display the trademark symbol is,” I said with a shrug of my shoulders. “But if used, that right does serve as a warning the mark is registered and possesses a bundle of valuable rights.”

And, anyone doing a trademark search of a similar mark will certainly be made aware of the registered mark, including a trademark examiner considering a subsequent, third-party filing of an identical or similar mark.  “Registration is constructive notice and there are cases where the infringement of a mark is considered willful” because it is registered.

An owner of a registered mark can enlist U.S. Customs to help prevent goods bearing the mark from entering the United States. Usually, these are counterfeit goods.  nd, finally, a U.S. trademark registration can be used as the basis for obtaining foreign registrations.

“As you see, a relatively small cost and effort buys big benefits,” I said.

I thought our talk had been interesting, but my friend was glazed over; he was having a hard time keeping his eyes open, but maybe it was the walk across hot pavement in the sun.  My friend downed a glass of cold water and the discussion moved to the off-shore power boat races and the O’s chances for a pennant.

James B. Astrachan is a partner at Goodell, DeVries, Leech & Dann, LLP and taught trademark and unfair competition law at Maryland’s law schools for 23 years. 

This article was originally published in The Daily Record.