When people talk about trademarks they usually mean federal trademarks. Every time you don’t register a trademark federally you run the risk that someone else will register it. That may not sound so bad, but what that means is that that someone can keep you from using your own trademark anywhere else in the United States!
You have to register with the USPTO to get a federal trademark, but you actually get a common law trademark by just using your mark in commerce. This is fantastic for the low-budget company that just opened its doors. You get all the same rights that a federally registered trademark holder gets at no cost. You get to exclude others from using the same mark in connection with similar goods or services. All you have to do is use the mark in commerce to indicate your company as the source of goods or services.
However, federal registration is a good idea if you ever plan to expand your business and use your mark in other places.
The most important difference between the common law and federal trademark is the geographic scope of your rights. Federal registration would give you the right to exclude others from using your mark everywhere in the country. That’s why if someone registers your mark before you do, they get to exclude you from using the mark everywhere in the country that you aren’t already using it.
If this happens, it can be a painful blow to your business plan. You lose all ability to expand your business into other areas. Someone could also start using your mark locally and get common law protection. This wouldn’t be good for your business either, because it would keep you from expanding into their area. If you do expand, they can file an infringement claim against you. When this happens, there’s usually nothing you can do to win the right to use your mark.