When it comes to trademark protection, nonprofits have two primary options: state or federal registration. Each comes with its own set of advantages and limitations, and understanding the differences is crucial for making informed decisions about safeguarding your brand and reputation. In this blog, we will explore the distinctions between state and federal trademark registration so that your nonprofit may chart the right course for protecting its valuable intellectual property.
State Registration
As the name suggests, state trademark registration offers protection at the state level. This means that the registered trademark is only protected within the borders of the state where it is registered. Nonprofits often opt for state registration when they operate exclusively within a specific region and have no intention of expanding beyond that region.
Advantages of State Registration:
1. Cost-Effectiveness. State registration is generally cheaper than federal registration. The fees for filing and maintaining state trademarks is often lower, making it an attractive option for smaller nonprofits with limited budgets.
2. Localized Protection. State registration provides localized protection, which may be sufficient for nonprofits with a primarily local or regional focus. If your target market is confined to a specific state or few states, state registration offers adequate protection.
Disadvantages of State Registration:
1. Limited Geographic Scope. The most significant limitation of state registration is its restricted geographical scope. The protection afforded by state-registered trademarks does not extend beyond the borders of the registered state (or states).
2. Less Comprehensive Rights. In the same light, state registration may not provide the same comprehensive rights as federal registration. In the event of a dispute, the rights of state-registered trademarks will be more challenging to enforce across state lines.
Federal Registration
Federally registered trademarks are protected nationwide, which is ideal for those nonprofits planning to grow operations and expand beyond their initial market. The flexibility of federal registration makes it a good option for many organizations. For that reason, many nonprofits choose to register their trademarks federally.
Advantages of Federal Registration:
1. National Protection. The most significant advantage of federal registration is the nationwide protection it provides. Once registered with the USPTO, the trademark is protected in all 50 states and each U.S. territory.
2. Enhanced Legal Standing. Federal registration enhances the legal standing of a trademark. In the event of a dispute, the owner of a federally registered trademark is often granted stronger legal remedies, including the potential for greater damages such as disgorgement of the infringer’s profits.
3. Use of the ® Symbol. Federal registration allows nonprofits to use the ® symbol in conjunction with their trademark. The ® symbol signals to the public and competitors that the trademark is officially registered with the USPTO.
Disadvantages of Federal Registration:
1. Higher Costs and Longer Registration Process. The process for obtaining federal registration is more complex and typically involves higher fees than state registration. Currently, the USPTO’s fee to register a trademark is $350 per mark per class and the registration process can take up to 18 months to complete.
2. Demanding Requirements. Federal registration often has more demanding requirements to qualify for protection, including the requirement to demonstrate use in interstate commerce. This may pose a challenge for smaller nonprofits operating solely within one state.
Ultimately, the decision between state and federal registration depends on the unique circumstances and position of each nonprofit. Small nonprofits with a local focus and limited resources may find state registration sufficient to protect their brand. Conversely, nonprofits with ambitions for regional or national expansion may benefit more from the comprehensive and enhanced protection federal registration provides.
Kyler Mejia is an attorney (bar pending) with Caritas Law Group, P.C. Kyler advises nonprofit and socially responsible businesses on corporate, trademark, tax, and fundraising regulations nationwide as well as donors concerning major gifts. To schedule a consultation, call 602-456-0071 or email us through our contact form.