A trademark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of the goods of one party from those of others. A service mark is a word, phrase, symbol, and/or design that identifies and distinguishes the source of a service rather than goods. The term “trademark” is often used to refer to both trademarks and service marks.
It is not necessary that trademarks or service marks be registered. However, federal registration has several advantages, including notice to the public of the registrant's claim of ownership of the mark, a legal presumption of ownership nationwide and the exclusive right to use the mark on or in connection with the goods or services.
There are also common law rights that a mark can receive for use in a certain manner and in a particular geographic area.
A MARK CANNOT BE CONFUSINGLY SIMILAR
The state and local offices, e.g., the Secretary State and Department of Commerce, where businesses submit applications to be recognized as separate legal business entities, are not related to the U.S. Patent and Trademark Office, where one applies to have a trademark registered for nationwide protection.
Usually a state's Secretary of State or processing agency does not have any requirement that the business entity it registers not be registered with another state or federal agency. The state entity only determines if the proposed name of a business entity is the same as or similar to a business on its registrar that is already formed as a corporation, limited liability company, partnership, etc., in the state.
The circumstances may be such that there is a sole proprietor in a specific geographic area that operates under a fictitious business name (DBA) that is the same or similar to the business name of a corporation, limited liability company, partnership, etc., already formed in the state. As such, two businesses might be using the same name, one business registered as a completely separate entity and formed on the state level, for instance a corporation, LLC or partnership, and another business that is a fictitiously named business registered at the county level, neither of each knowing that the other is infringing on its rights. The state agencies leave it up to the the parties to police themselves, for example, through an infringement law suit.
Similarly, the USPTO only checks the USPTO registrar to determine if a “likelihood of confusion” exists between the prospective mark in the application (which could be a trade name, logo, phrase, moto, etc.) and a previously registered mark or prospective mark in a pending application with an earlier filing date.
As it is, the USPTO may inadvertently register a mark that infringes on the rights of a business that is already using a similar trademark, however is not registered with the USPTO but is being used in commerce in a smaller geographic area. In such a case, the person/entity who is granted a registration of a trademark by the USPTO would be permitted to use the trademark on a national basis, but probably cannot use the trademark in the smaller geographic location where the business using the similar trademark is already using the trademark. The rule of thumb is that the first person to use a mark in commerce has the dominant right in the geographic area where the mark is first used, ergo the phrase, "first in time is first in right". In addition, the USPTO does not enforce the rights of the person/entity with the registered mark. It would be up to the parties to sort it out in court. On the other hand, if the person who is using the trademark in the smaller geographic area becomes aware of the USPTO application, that person can oppose the pending application before the registration is granted by the USPTO, or otherwise initiate an action to cancel the mark. Although limited in its power to enforce conduct through an injunction and award damages, an action may be brought with the Trademark Trial and Appeal Board (TTAB) to prevent registration or cancel a mark.
In determining whether a mark can be registered, the USPTO determines whether there is a likelihood of confusion between the mark of the applicant and any registered mark and any mark being considered in a pending application with the USPTO. The first step is to determine whether the marks are "similar". The determination of whether marks are "similar" includes the mark's spelling, sound, meaning, translation, etc.
Even if the marks are similar, the mark may still be registered, if the goods and services that are identified by the mark are not related, i.e., it is possible to register an identical, or similar marks as long as the goods and services upon which the mark is used in commerce are not related. For example, the USPTO may register two identical marks “ABC” if the registered ABC mark is used in commerce to trade hats and the second (applicant's) ABC mark is used in commerce to trade automobiles. On the other hand, the second (applicant's) mark would not be fit for registration if ABC was used to trade shirts instead of automobiles, because hat sales and shirt sales are related, i.e., in the same general industry, clothing.
If both elements are met, (1) similar; and used in commerce for (2) related goods and services, then the mark cannot be registered with USPTO for protection on a nationwide basis.
Claims for damages
Trademark violations can be filed in state or federal court, depending on the the rights affected and usually piggyback other statutory and common law claims, e.g., breach of contract, interference with economic advantage, conversion, fraud, etc. Unlike the TTAB, federal courts have the power to issue injunctions to stop the unlawful use of a trademark and can also award damages and attorney's fees. Notably, bringing a claim in federal court does not require that the mark be registered with the USPTO.