When I was pursuing my Master of Laws at Loyola Law School in California, one of my favorite classes was Constitutional Law. No surprise I graduated with honors in that class (the only honors I’ve ever received in my academic life—LOL). Coming from a legal system where all powers not reserved to the federation fall to the states, it was fascinating to study the opposite dynamic here: the structure of federalism, the power of the states, and why decentralization is essential to democracy.

The case law surrounding the balance of state and federal power (especially in the civil rights context) absolutely fascinated me. So as a litigator, when I began practicing intellectual property law in the U.S. and encountered the interplay between common-law rights and federal statutory rights, I was immediately interested in how state trademark rights can, in certain circumstances, override federal rights.  

Understanding that the Constitution’s IP Clause in Article I, Section 8 was crafted with patents and copyrights in mind, not trademarks, creates an important gap. And that gap can become a strategic advantage in litigation, because trademark rights ultimately originate through common law use, not in federal registration.

In 1879, the Supreme Court held that Congress lacked power to regulate trademarks under the IP Clause because marks did not possess the qualities of patents: originality, inventiveness, novelty.

With respect, Your Honor, I disagree.

Marks are creative. They are original. They tell brand stories. They embody identity, goodwill, and commercial meaning.

But regardless of Congress’s reasoning, the Court established something foundational:

“[A trademark] is a property right for the violation of which damages may be recovered in an action at law, and the continued violation of it will be enjoined in equity… This exclusive right was not created by the act of Congress and does not depend upon it for enforcement.”

This affirmed that trademark rights existed long before federal registration and continue to exist independently of it. Courts protected marks under the common law even after the 1870 trademark statute was struck down.

Of course, the Lanham Act and federal registration offer significant advantages, including priority, constructive notice, and nationwide protection. Federal registration helped trademarks evolve alongside a national economy and modern technologies. But Congress always understood federal registration as a layer placed on top of common-law rights, not a replacement for them.

As the Supreme Court later reaffirmed, substantive trademark rights: “grow out of use, not mere adoption.”

If a business has no protectable trademark rights unless the mark is used in connection with an established business or trade, therefore:

1. A holder using a mark in one region cannot block another holder who, in good faith, adopted the same mark in another region.

2. In geographically limited disputes, establishing use in a specific territory matters as much as establishing priority.

This is where state registrations can be a good strategy for litigation purposes.

Why State Registrations Matter in Litigation

State registrations can operate as strategic leverage, especially when:

• A federal applicant claims priority based on an earlier filing date, or
• A senior common-law user wants to lock in territorial rights, or
• A party needs to strengthen an injunction argument within a specific geographic area.

If you don’t mind dealing with state Business Departments that still operate like it’s the 1800s (yes, mailing checks and paper applications in 2025), a state trademark registration offers something a federal registration cannot: it formally acknowledges and records your rights within a defined state boundary.

This is why state registrations can limit the effective scope of a federal registration. They help as evidence of:

• Actual use,
• Territorial priority, and
• Consumer recognition within the state.

A federal registration is prima facie evidence of nationwide rights, but only prima facie. It can be rebutted.

The Lanham Act Explicitly Preserves Common-Law Territorial Rights

Two sections are especially important:

§33(a) Allows a prior user to assert any legal or equitable defense against a federal registrant, including the Tea Rose/Rectanus doctrine (good-faith, remote senior use).

§33(b)(5) Protects a non-registrant’s continuous prior use in the territory it occupied before the federal registrant’s constructive use date.

In other words: Federal registration gives national rights, except where someone else already has them.

This can serve you as leverage during litigation to exclude main jurisdictions strategically and obtain an injunction in an specific territory.

Using State Registrations as Litigation Tools

When you obtain a state registration and prove use within that state:

• You solidify your claim to that geographic area.
• You bolster your ability to obtain a preliminary or permanent injunction.
• You limit where the federal registrant can enforce its mark.
• You increase leverage in settlement negotiations.

Under common law

• If the junior user adopts a confusingly similar mark within the senior user’s territory, it can be enjoined.
• Conversely, if a junior user adopts the mark in a different geographic area and creates a likelihood of confusion there, the junior user can enjoin the senior user from entering that territory

When the fight is about where you can enforce your rights (not just whether you have rights) a state registration can make all the difference.