You mean to say if I start a business with the word " Water" then I have the legal rights over other businesses in usage of the word "water" even without registering my trademarks and intellectual properties?
Yes ... 100% .. as hard as it is to believe!
Google "Common Law Trademarks" and take a leap down the rabbit hole .. lol
https://www.legalzoom.com/articles/what-are-common-law-trademark-rights
If you have a business name, product name, tagline, or logo that you use regularly, you may have
common law trademark rights—even if you have never registered your trademarks with any governmental agency.
Trademarks are words, phrases, symbols, or sounds that you use to identify your business. Famous trademarks include everything from the McDonald's golden arches to Nike's “Just Do It" slogan, to the business name Amazon.com. Trademarks are an important tool to prevent other businesses from using similar marks that might confuse your customers.
You acquire
common law trademark rights just by using your trademark in your business. You can strengthen those rights by registering your trademarks with the U.S. Patent and Trademark Office, or
USPTO.
It's isn't quite as simple as that .. trademark class and region come into play.
Also .. nobody could ever claim rights over a generic like "Water" in any food category. However if you started selling a software application called "Water", then you would have right's to "Water" in the software TM class.
In a food class you could start using "Red Water" and be protected. But you couldn't use "Water" or even "Blue Water" (because blue is a commonly used descriptor of the industry generic word "Water")
In the same way if you tried to register "Water" or "Blue Water" it would very likely be rejected if you were registering for a food product.
If you don't register your trademark you got nothing to prove in court.
For sure they do. All their internal documentation could be used. Client witnesses. Invoices they issued using the mark (very useful because they have the date on them).
We cannot search the whole world to see how many business are using the word "Water" and fear that they would sue you even without any trademarks registered.
This is where you are somewhat right. Although if your common law trademark is so strong (Microsoft, Coke, and even slightly less popular) that a judge or UDRP panellist believes you very likely knew about the brandl, then you will lose.
However .. in most cases where it's some small 2-3 person company operating out of a basement, it is up to the trademark holder to actively defend their mark. If they didn't contact you within a few years then in most cases you will be same and can continue to use the trademark.
The only real way you'd get in serious trouble is if you are proven to have known about their trademark ...
... and that's where all this ends ...
... the simple act of contacting them inquiring if they want to buy the domain is irrefutable proof that you know about them! And then the act of trying to sell it to them is you trying to profit on their trademark.
So therefore by doing outbound on a company with an existing confusingly similar mark, you are in fact proving yourself guilty.
All that said ... if it's a very common trademark word/term combination .. then things get a little fuzzier. But if there's only one or two X+Y in the world, then you're seriously asking for trouble if the other company knows and understands trademarks.
I can sell my grandmother's apple pie on apple.xyz domain as long as apple inc does not have any trademark registered on apple pie products
Anybody can sell Apple Pie on Apple.xyz since "Apple" would be considered a generic word within any food category .. so effectively nobody could ever have a trademark on the term "Apple" when dealing with food. Which means that anybody can use it.
If your building a brand, a business should make sure they own their rights to all their intellectual properties. Else its like building an office on a piece of land which you don't own.
It's not like that with trademarks ... using this analogy, effectively if you build on a piece of land (/use a trademark) before anyone else .. then that land (/trademark) is yours.
Congratulations .. now you know how trademarks really work .. and why most domainers get it so wrong all the time!