Common law trademarks versus federal registration
The term "common law" indicates that the trademark rights that are developed through use are not governed by statute. Instead, common law trademark rights have been developed under a judicially created scheme of rights governed by state law. Federal registration, a system created by federal statute, is not required to establish common law rights in a mark, nor is it required to begin use of a mark. However, federal registration, if available, is almost always recommended and gives a trademark owner substantial additional rights not available under common law. See the BitLaw discussion of federal registration for more information.
Geographic limitation of common law marks
Common law trademark rights are limited to the geographic area in which the mark is used. Thus, if a coffee blend is sold under the name BLASTER in California only, the trademark rights to that name exist only in California. If another coffee retailer begins to market a different blend in New York under the same name (assuming they had no knowledge of the California company), then there would be no trademark infringement. However, if the New York company attempted to sell their coffee blend nation-wide, they would discover that the California company's common law rights to the mark would prevent them from entering the California market.
Effect of common law marks on trademark searches
Since no registration is required in order to establish common law rights to a trademark, it can be difficult to discover whether anyone has trademark rights in a particular mark. This is the legal background for the difficulties and expenses involved in trademark clearance searches. If registration were required for trademark rights, clearance searches would only need to examine trademark registers. Under U.S. law, however, an attempt must be made to discover these common law rights.