Choosing and trademarking a name for your business involves dealing with the fact that another business might be using the same name, even if it is in another state. Although the safest course of action is to avoid using the same name as another business, it may not be always be desirable or feasible to avoid it. You can trademark a name used by a business in another state under the right circumstance.
Trademark rights have their origin in common law and the way to establish such rights is to actually use your trademark in commerce. Although government registration gives greater protection to your trademark rights, registration of any type is not required to establish common law trademark rights. However, common law trademark rights are limited by the geographical area that a business serves. For example, if ACME Air is selling air conditioners in the Phoenix, Arizona market, you can be prevented from opening a new business selling air conditioners in that market using the same name, but you cannot be stopped from opening the business in another market, such as Tucson.
Each state has its own laws regarding the procedure to register trademarks. The primary purpose for registering a trademark with the state is to protect a trademark from infringement by competitors throughout the state; however, a state registration in one state will not have any effect in another state. Therefore, if a business has a state registered trademark in one state, such as Arizona, you can register the same trademark for your business in another state, such as California.
Registering your trademark with the U.S. Patent and Trademark Office gives you the greatest possible protection for your trademark, as well as giving you the right to use it nationwide. However, applying for a registered trademark is not guaranteed. During the course of examining your application, USPTO will compare it with all other federally registered trademarks and pending applications. If your trademark is the same or confusingly similar to another trademark -- even if the business only operates in another state -- your application for federal registration will be denied.
Although a competing business in another state has a federally registered trademark that is the same as your business name, it cannot commence business in your state and stop you from using the name. You have the right to continue using your name under your common law trademark rights in your geographical market area; however, you may be prevented from expanding the use of your trademark to other markets in your state. Another limitation on registered trademarks is the classification of the trademark to a specific type of product. For example, the owner of a federally registered trademark for ACME Air under a classification that includes the business of selling air conditioners cannot prevent another company from using the same name for an entirely different business, such as passenger air travel.
