Approximately 20% of all trademark applications are ultimately rejected. But what if you have already been using your trademark extensively? Should you immediately stop using it and change the brand name?
The first thing to understand is that trademark registration is intended to prohibit third-party infringement, not to grant permission to use the trademark.
Trademark registration and usage are separate matters. Technically, if there is no pre-existing registered trademark owner who can claim infringement, you can continue using the rejected trademark without legal issues. However, depending on the reason for rejection, you should carefully assess whether continued use is advisable.
1. In case of Rejection Due to Lack of Distinctiveness
In this case, there is no obstacle to continued use. A lack of distinctiveness means the mark does not serve as a source identifier and is therefore non-exclusive and open for anyone to use. Consequently, no one can claim trademark infringement based on this mark.
You can continue using the mark while considering a reapplication by combining it with a logo or other distinctive elements to improve registration chances.
2. In case of Rejection Due to Similarity with a Pre-Registered Trademark
This situation is more complex. You need to conduct a thorough review of potential infringement risks. If there is a real concern that your trademark may infringe on a pre-existing trademark, it’s best to stop using the mark and switch to a new brand name immediately.
Continuing your business under such risk is dangerous, as legal action could be taken at any time.
A situation poses real infringement risk if:
- The trademarks are similar (i),
- The goods/services overlap or conflict in the actual market (ii), and
- The pre-registered trademark is in use, making cancellation for non-use unlikely (iii).
However, not all cases of rejection due to similarity necessarily imply a high risk of trademark infringement.
Low Infringement Risk Scenarios
Different Market Categories
Sometimes, your business may operate in a different market segment, even if your application was rejected for being too similar to a pre-existing mark. The Trademark Office uses a classification system called similarity group codes, which may not always reflect real-world overlaps.
For instance, suppose a pre-existing trademark is registered for “clothing,” and your rejected trademark relates specifically to custom-tailored men’s suits. The Trademark Office may classify both under the same category, resulting in rejection.
However, if the pre-registered mark owner primarily produces underwear, it is unlikely that luxury tailored suits and underwear would cause market confusion, as the producers, products, and target consumers are vastly different. In such cases, infringement may not be an issue.
You can temporarily continue using the trademark while planning a future brand change.
Non-Use of the Pre-Registered Mark
If the pre-registered mark is not in use, there is minimal risk of infringement claims. Trademark owners cannot seek damages based on unused trademarks. However, it’s still wise to monitor the situation, as the trademark owner may resume use. If changing your brand is difficult, you might consider filing for a non-use cancellation.
3. What Should You Do?
Regardless of the situation, continuing to use an unregistered brand comes with significant business risks. Even if there is no immediate need to stop using the rejected mark, you should gradually transition to a registerable trademark. Make sure to secure trademark registration for the mark you are currently using to protect your business in the long run.