Below please see the article I published in the December edition of Northern Nevada Business Weekly
Trademarks are the legal protection for your brand. Trademark law benefits consumers by allowing them to quickly identify and select goods and services that they trust. When I walk into a Starbucks® location, I don’t have to worry about what the coffee will taste like. I trust the brand. Imagine if anyone could call his coffee house “Starbucks”. This would be very confusing and frustrating for consumers. As well, these other coffee houses would be ripping off the goodwill Starbucks® has built.
Trademarks are often a company’s most valuable assets. Forbes magazine recently valued Google’s trademark at $44.3 Billion. Yet, many businesses fail to get good trademark advice and take the right steps to protect their brands. Below I have listed the top 7 mistakes businesses make regarding their trademarks:
1. Failing to file Federal Trademark Registrations. You should file federal trademark registrations on the company name, the name of any particular product you offer, any important logos that you use, and any important marketing “tag lines”. This multi-mark strategy is critical to building a wall around your brand. A quick U.S. trademark search using the phrase “Coca Cola” yields 185 trademarks including the name, numerous logos, numerous product names such as “Vanilla Coca-Cola Zero” and tag lines such as “Always Coca-Cola.” If your company is small, you may have to prioritize your filings in the early going. However, many businesses file for their main name early (if that) and then figure their trademark work is “done”. Don’t make this mistake!
2. Failing to secure your trademark position prior to launching. The most important time to think about your trademark is before you invest substantial resources into a business or product. You want to make sure your trademark is protectable and you want to avoid a costly dispute with another party. If you find a conflicting mark or other trademark problem before launch, it should be easy to simply come up with another name. I have had clients who want to stubbornly stick to a name with a weak trademark position just because they invested a few hundred dollars in business cards and stationary. Bad idea – a trademark lawsuit through trial will be $100,000 minimum.
3. Selecting a weak name. From a trademark perspective, it’s best to select a name that is fanciful or arbitrary. A fanciful name is one that is not a real word (for instance “Xerox” or “Google”,). An arbitrary name is one that has absolutely nothing to do with the product or service being sold (for instance “Apple” for computer products). Names that describe or suggest something about the product or service offered are legally weaker. For instance, “Hot and Fresh” would be a descriptive or suggestive mark for a pizza restaurant. One reason for this is that the law must allow competitors to fairly describe their offerings. As well, their consumers might be identifying with the description (i.e. let’s get some hot and fresh pizza tonight) instead of the brand (let’s get some Hot and Fresh brand pizza tonight). There is always a trade-off here but that decision should be made with the input of an experienced trademark expert. Similar pitfalls exist with trademarks that include the surname of a person or that reference a geographical area.
4. Failing to police their Trademarks. If you snooze you might very well lose. Under the trademark law doctrine of “laches”, infringement may be excused if the trademark owner unreasonably delayed in enforcing his rights. This means that as a trademark owner you need a process whereby potential infringing activity is monitored, and an appropriate level of enforcement applied. This does not mean that you file a costly lawsuit over a small infringement. However, a quick “cease and desist” letter when you find out about the infringement is probably necessary.
5. Filing a trademark application by yourself. Most businesses would never go to Court without a lawyer, but many feel that they can handle something “simple” like a trademark application. This is a quintessential example of being “penny wise and pound foolish”. The cost to hire professional help to file and prosecute a trademark application is nothing compared to the fees involved with a trademark dispute. The potential loss of brand value may be even more devastating. I have a client involved in a costly “cancellation” proceeding at the Trademark Board of Appeals against a prominent national company with a high–priced legal team. Now he’s married to his name. At the time he filed on his own he could have easily steered around this potential conflict.
6. Allowing Trademark Registrations to Lapse. A trademark registration must be renewed between the 5th and 6th year anniversary of registration and then every 10 years thereafter. To renew, you must show the Trademark Office that you are still using the Mark in commerce for the claimed use. Unfortunately, the Trademark Office does not send out any kind of notice of your upcoming deadline. You must docket these deadlines or work with a law firm or service that takes care of this for you.
7. Missing out on Incontestability. At the 5th-6th year registration anniversary, the trademark owner may be able to file “Declaration of Incontestability.” Incontestability enhances the legal power of your trademark registration by dramatically limiting the ability of a potential infringer to challenge its legal validity. To qualify, the trademark must (1) be on the Principal Register; (2) have been in continuous use in commerce for a period of 5 years after the date of the registration; and (3) have no adverse decision(s) or pending proceeding(s) involving rights in the mark. The most important legal benefit of “Incontestability” status is that the infringer can no longer attack your mark on the ground that it is merely descriptive. Incontestability also eliminates problems with having a mark that is a surname or references a geographical area. Unfortunately, “Incontestability” does mean that no legal attack that may be made to your trademark, but it creates a strong impression that it does. This perception can be helpful in a Cease and Desist Letter to an unsophisticated infringer.
And since I believe in always giving a little extra value, here’s bonus mistake 7.5:
7.5 Failing to learn about Trademarks. Perhaps the biggest mistake that any business can make regarding trademarks is ignorance. All too often I’ve talked to business owners who just assumed that their business name, product name or service weren’t worthy of trademarks. If you do nothing else, find out! A little research can save you tons of grief and more importantly, help build a valuable asset for your business.