A long time ago a little known poet by the name of William Shakespeare wrote the lines:
“What’s in a name? That which we call a rose by any other name would smell as sweet.”
Well, William, that’s a good question… What is in a name? If you’re a business owner, the short answer is “a lot”. Sometimes a name is all that you have. That name, along with the company logo and overall branding are the cornerstone of its market recognition. A business’s brand is developed to elicit certain feelings that increase its demand within the marketplace.
Would Apple by any other name still be Apple? Would Jordan’s by any other name or logo still be Jordan’s? I would argue, no. Both of these brands have built up their strength and value over years and years of struggles, failures, and successes. Now they are both brands that have generated a cult-like following. Very few companies can release the same product over and over with slight modifications, increase the price, and charge almost twice as much for the new product.
Long story short, a name and branding means company value.
So how do you as a business owner, or potential business owner, ensure that you are able to continuously build on your brand’s value? It’s important to do a trademark search before you engage in extensive branding of your product/company. Why you might ask? Because failure to do so may result in fines, fees, and/or you having to completely or partially re-brand yourself.
There are two main potential pitfalls that can occur when you fail to do a trademark search before branding: 1) actual trademark infringement and 2) potential trademark infringement.
Actual Trademark Infringement
This occurs when you have inadvertently produced a name, logo, symbol, etc. that is very similar to another company in the marketplace that offers the same or similar products or services as your company. The foundation of the test for “if you are infringing” is whether a consumer in the marketplace viewing your mark would be confused as to the source of goods or services. To put it plainly, is there a likelihood that people would be confused as to whether the goods or services belonged to you or another company in your industry.
If the answer is “yes” and the other company was first and/or has a federally registered trademark, odds are, you will have to completely re-brand your company. That is unless you are able and willing to go through costly/lengthy litigation, and you actually win. The other rarity is that the company that you have infringed upon writes a letter stating that they give you permission to continue to use your mark… If you are that good at wooing people, hats off to you.
Potential Trademark Infringement
This occurs when you have created a mark that is very similar to someone that is in your industry, as stated above, but there isn’t the immediate likelihood of confusion within the marketplace. This usually occurs because two companies (neither of whom have federally registered their trademarks) on opposite sides of the nation, serving a local market, have similar goods/services and brands. There isn’t an immediate opportunity for confusion because while they are operating in the same industry, they are also operating in completely different territories where their customer base is very unlikely to overlap.
However, with this digital age the world has become smaller and smaller. The Internet has made it possible for almost every industry to span nationwide. Beyond that, many companies have long-term aspirations of expansion into other regions/territories.
So what happens when you have started a company in Illinois and want to expand to Arizona, but you find out that there is a local company whose brand is very similar to yours? Well if you read our previous article, you remember that a common law trademark, protection that automatically attaches to your brand just by you selling your goods or services on the market, gives you geographical protection. Ergo, that company in Arizona has the enforceable protection.
This means that you are left with two options, 1) enter into that market using an alternative branding, or 2) don’t enter into the market…
So Business Owners and Potential Business Owners, be diligent in doing your research beforehand so that you can avoid these potential pitfalls. If you create a product or service with the initial intention of expanding nationwide, or globally, it is ALWAYS a good idea to explore the option of federally registering your trademark upfront.