The First Order seeks to restore the Empire and all that it entails. As part of the First Order’s plan, it wishes to make sure that its name is not lessened by any non-permitted use of the name. To that end, the First Order registers a trademark for the name First Order.
Meanwhile, for the past several years, Rey has been operating First Order Salvage on the planet Jakku. Being a small business owner, Rey never took the time to register her trademark. However, Rey's hard work running the business has paid off; First Order Salvage is now the largest salvage company operating on the planet, and is a household name on the planet.
When First Order forces land on the planet, they are shocked to discover that their name has been taken. Assuming General Hux doesn't simply destroy the offending party, what are his options?
Types of Trademark Rights
What this example shows is that there are two types of trademark rights - common law and statutory. Common law trademark rights are acquired automatically upon normal business use in the specific geographic areas in which they have been used, but only in those areas. These rights are effective only as long as they are in use - common law trademark rights can be abandoned by non-use. In this example, by operating her business, Rey has acquired common law trademark rights, but only on the planet Jakku, and these rights are only effective as long as she continues to operate the business.
The First Order, by registering its trademark, has acquired statutory trademark rights. These rights were acquired upon registration of the trademark, and are not restricted to the areas in which the name First Order is actively used. Moreover, statutory trademark rights are not abandoned through non-use. The only exception is that these trademark rights do not apply in areas where someone else has a pre-existing common law trademark right. In this case, that means everywhere but the planet Jakku, where Rey had previously acquired common law trademark rights. However, Rey's trademark rights are restricted to that planet, and are effective only so long as she operates the business.
In the United States, the primary trademark law is the Lanham Act, which allows for registration of the trademark at the federal level. Federal registration of a trademark creates a nationwide trademark right that does not require active use to be enforceable. A registered trademark is enforceable through federal courts and federal agencies; however, that trademark does not erase pre-existing common law trademarks in the areas those trademarks have been acquired.
Trademarks do not have to be registered to be effective. However, the level of protection a trademark receives, depends upon whether or not that trademark is registered. It is important therefore to register your trademark, and to do so in a timely fashion. At the Vethan Law Firm, P.C. our business attorneys can help you protect your trademark rights.