Once a proposed mark clears a knockout search, it is best practice in the industry to order a search report from a reputable trademark search company. Although not required by law, a trademark report reduces the risk of future trademark infringement disputes and provides a path to reduced liability for the trademark adopter, should such a dispute arise. Most, if not all, trademark search reports rely on computer generated search algorithms, which search character strings and search terms related to the proposed trademark. These reports will provide search results not only for the PTO database, but also will generally search state and common law sources, such as incorporation directories, business directories, the Internet and the Yellow Pages, as well.
A major difference, then, between a knockout search and a trademark search report, is that the report searches for trademark use by third parties who may have common law trademark rights, but who do not have a trademark registration with the PTO. These are people and companies who acquired rights to their trademarks through use in commerce, but who, for whatever reason, never registered their marks. Although common law trademark rights differ from registered trademark rights in a number of important respects, a common law trademark holder, nonetheless, owns enforceable trademark rights. A common law trademark holder will generally have priority over a later adopter of the same or similar mark for the same or similar goods or services – even if the later adopter is granted a registration by the PTO. Because common law rights are accrued through use in commerce, common law trademark rights are generally limited to the geographic areas in which the marks are used.
Although a trademark search report can cost anywhere from $200 to $600 or more depending on the type of search, it is generally advisable to have your trademark attorney order such a report. In some cases, such as where a mark has been in use over a period of many years without incident, or where budgetary considerations take precedence, it may not always be necessary or feasible to order a search report, although it is always advisable to perform a basic knockout search. For most businesses, however, ordering a search report is an important part of the trademark clearance process. As further stated in the section on trademark clearance, the search report provides the basis for a clearance letter. Good faith reliance on a properly drafted clearance letter from a trademark attorney reduces the risk that a court will find a party to be a willful infringer, and, in certain jurisdictions, may preclude a plaintiff from receiving disgorgement of profits.