(Educational): Common Law Rights Explained: Why "First to Use" Matters for Startups
How common law trademarks can block national brands.
By VisiName Team · January 23, 2026
The Invisible Wall: How Common Law Trademarks Can Block National Brands
Imagine this scenario: You are launching a new coffee franchise, "Morning Ember." You search the USPTO database, and the name is available. You file your application, buy the domain, and launch nationwide.
Two weeks later, you receive a Cease & Desist letter from a small café in Portland, Oregon, also named "Morning Ember." They have never filed a trademark. They have no website. They have one location.
Can they stop you? In the United States, the answer is often "Yes."
This is the realm of Common Law Trademarks—the invisible iceberg that sinks countless modern brands.
1. What is a "Common Law" Trademark?
To understand the risk, you must understand the definition. A Common Law Trademark is a property right that arises solely from the use of a name in commerce. It is not granted by a certificate; it is forged by the act of selling.
The United States follows a "First to Use" doctrine, distinct from the "First to File" systems in China or Europe.
The Golden Rule of US Rights
Usage > Registration.
You do not need to pay the government $350 to own a trademark. By simply hanging a sign above a shop door and selling a cup of coffee to a customer, a business owner automatically acquires valid, enforceable legal rights to that name in their geographic area. These are "Common Law" rights, and they are invisible to standard federal searches.
2. Why Do These Rights Exist?
It stems from consumer protection, not business protection.
If the locals in Portland know "Morning Ember" as the spot for great espresso, and a national chain comes in with the same name selling mediocre drip coffee, the consumer is confused. The law protects the local customers' understanding of the brand, regardless of whether the shop owner filed paperwork.
3. The Nightmare Scenario: "Swiss Cheese" Branding
Common Law rights are typically limited to the geographic area where the business operates (plus a "zone of natural expansion"). This creates a massive problem for digital-first or national brands.
If you launch nationally, and a "Mom & Pop" user predates you in three specific cities, they can legally force you to:
- Geofence your digital ads: You cannot show ads to users in their zip codes.
- Rebrand locally: You might be "Morning Ember" in 47 states, but forced to be "Morning Brew" in Oregon.
- Pay a ransom: Often, the only way out is to pay the small business a massive sum to acquire their rights.
Historical Precedent: Burger King
The most famous example is Burger King of Florida, Inc. v. Hoots. A small restaurant in Mattoon, Illinois, was named "Burger King" before the famous chain expanded there. The court ruled that the giant corporation could not enter the local market. To this day, the Burger King chain cannot operate within a 20-mile radius of that one store in Mattoon.
4. How to Spot the Invisible
Since these businesses don't appear in the USPTO database, how do you find them? You must conduct a "Common Law Search." This goes far beyond government databases.
A proper audit must scrape and analyze:
The Takeaway
Just because a name is "Unregistered" doesn't mean it is "Unowned."
For national brands, the risk isn't just a rejection letter—it's an injunction. Before you invest in a name, ensure you aren't accidentally declaring war on a local legend.
About the Author
VisiName Research Team
We specialize in uncovering the "invisible" risks that standard checks miss. Our Common Law audits scan millions of local data points to keep your expansion safe.