Abolishing State Trademark Registrations

Abstract

State trademark registration laws fly under the radar. All fifty states have a state trademark registration system that operates in parallel with — or more accurately, beneath — the federal registration system.1 In all but one state, a state registration is needed to support a state statutory claim of trademark infringement, but these statutory claims coexist with parallel state common law trademark rights in the vast majority of states. This Article examines the role and substantive protection of the several states’ registration systems by a comparative analysis with the roles of and substantive protections afforded by state common law, state unfair competition law, and federal statutory law. My focus is on the judicial enforcement of trademark rights through civil litigation, but I also address the effect an individual state registration may have on a second user’s search and trademark selection process. The heart of my inquiry is whether state registrations have real, effective value (as opposed to stated or theoretical value) for individual owners. A secondary analysis I pursue includes the systemic costs and benefits of state registration schemes at both the state and federal levels.The analysis in this article demonstrates that state trademark registrations do not add significant value for most trademark owners when compared to other civil enforcement options available. Under the law of forty-five states, registrations provide registrants with no significant, enforceable substantive rights beyond those awarded under state common law or under the federal statute protecting unregistered common law trademarks. In five states certain substantive rights can accrue to an owner through state registration, although those rights are limited by competing rights held by certain common law owners or federal registrants. Further, registrants in the forty-five low-value states may rely on these almost-to-completely valueless state registrations to their very great detriment, which can seriously disadvantage a legally unsophisticated trademark owner. Both high-value and low-value state registrations create unnecessary complications in the web of state and federal trademark rights and impose unwarranted costs upon new market entrants. In addition, most state registration systems (both high- and low-value) almost certainly demand more public dollars than the system returns to the state in the form of either private or public benefit. The practical value of state registrations is so low, as a whole, that the costs outweigh the benefits. As a result, I advocate for the complete abolition of all current state trademark registration systems.In support of my argument that trademark law and trademark owners, as well as the public, would be better served by the abolition of state trademark registrations than by their perpetuation, this Article proceeds as follows. First, I briefly survey the history and interaction of state and federal trademark law and review the major statutory benefits of federal trademark registrations. Second, I analyze and critique the trademark statutes of all fifty states, with an emphasis on what rights, if any, a state registration provides that are not otherwise available under state common law or the Lanham Act. Third, I explain some of the private and public costs of state trademark registrations. The analysis leads to my conclusion, set forth in the final portion of the article, that trademark owners and the trademark “universe” in the United States would be better off if states abolished their current registration systems.