Attorneys often need specialized advice on intellectual property matters such as trademarks. If you’re advising business clients, learning some basics will help you protect your clients’ intellectual property assets and avoid expensive disputes.
Every business has a brand. Some are strong and some are weak. Business owners should conduct a comprehensive trademark clearance search before they select a name and logo for their company or new product line.
A trademark clearance search should help them weed out names and designs already being used in commerce. The search should include a filtered search in the U.S. Patent and Trademark Office trademark database, a search of an all-states trademark database and a domain name search.
Encourage the client to distinguish their business in the marketplace by selecting a strong trademark not used by anyone else in their line of business.
Failure to conduct a trademark clearance search can lead to business owners spending more money in the future responding to cease-and-desist letters and/or rebranding their business.
For instance, I have been involved in trademark infringement cases in which the owner of a new business, let’s call him Ivan Infringer, intentionally selected a business name very similar to a direct competitor who had been operating for more than 30 years. Let’s call the competitor Superbiz.
Ivan considered himself to be a smart businessman. He knew his new business name was similar to Superbiz and proceeded to set up a website and social media pages with a similar name to Superbiz.
His actions caused consumer confusion and Superbiz started receiving calls from customers wanting to know if Ivan was affiliated with them.
Superbiz hired an intellectual property lawyer who sent a cease-and-desist letter to Ivan. Ivan hired a non-IP lawyer who sent a response to the cease-and-desist letter that essentially told Superbiz to get lost.
A trademark infringement suit was then filed in federal court. Thousands of dollars were spent on lawyers, experts, and mediators for more than two years.
What happened? Ivan was forced to go through a complete rebranding process plus pay damages to Superbiz. A simple trademark clearance search could have avoided the entire situation.
Many business owners do not think about registering their trademarks or aren’t sure that’s important.
Business owners should look to the future and realize if they succeed in business their trademarks will be valuable. Their trademarks need to be registered and protected as early as possible. Some of the most valuable trademarks in the world started off small (Coca-Cola, Starbucks, Bruce Springsteen).
In the story above, Superbiz obtained trademark registrations through the USPTO prior to filing their trademark case. The trademark registrations were prima facie evidence of the exclusive right to use the trademarks.
Business owners will often register domain names like their competitors’ and use the similar domain to redirect consumers to their own website. For example, a company may have the domain sugaracademy.com. A competitor might register sugar-academy.com or sugarsacademy.com which is likely to cause consumer confusion.
Advise your business clients to register multiple domains with several generic top-level domains (.com, .net, .org) and different variations of the domain name. Also, select a domain name that is not similar to a competitor.
Remember Ivan Infringer? He was forced to turn over two domains he had registered to Superbiz. Ivan had to register new domains and create a new website along with social media pages. That’s a lot of lost time and money.
A basic understanding of the value of intellectual property assets can be helpful to business clients and boost their bottom line while also protecting their business from easily avoidable legal disputes.
As lawyers, we can help clients like Superbiz protect their IP assets from Ivan Infringers.
Crystal Broughan is a shareholder at Marks Gray where her practice focuses primarily on intellectual property matters such as trademarks, trade secrets, copyright infringement cases and domain name disputes.