Why you Need a Trademark Search Run BEFORE Starting Your Business

Sparks Law | March 11th, 2016

It happens too often: I sit down for the first time with a client who has spent thousands of dollars marketing their brand name only to find that the brand they’ve fallen in love with, and spent countless hours developing and marketing towards their customers, is an Unavailable Trademark. The terrifying legal solutions they are faced with is to either (1) continue to use their brand name with the risk of an infringement suit from someone who was using it first, or (2) start over with an entirely new, trademark that is available. Here are some of the most common questions I receive regarding Trademarks:

 

What if I Approach a Company using the Trademark beforehand and Offer to Pay them a Licensing Fee?

Okay, let’s play this out: The company you contact agrees to license the name to you, and you pay them a monthly or annual fee. This would mean that (1) you would need to hire an attorney to write the agreement, or effectively pay the company to hire an attorney-drafter who is paid for from your licensing fees, (2) the agreement would, by default, recognize their business as the true original owner of the trademark, meaning that (3) at any time, they could effectively force your company to pay exorbitant licensing fees for your use of their trademark, with the threat of a lawsuit if you refuse to pay, and of course (4) you would have to pay the regular fees they charge you regardless.

 

Yes, it is certainly possible that the owners are kind-hearted individuals and will choose not to charge you much, if anything, to use their mark..They also may not ever sue you for infringement, but what about 10 years down the road when they sell their business and the new buyer wants to maximize the value of his newly purchased trademark? The buyer has no loyalty to you or your company, but has all the incentive to take you to court for infringement and sue for profits.

 

But My Brand Name is PERFECT the way it is!

I understand that it’s a great name; if it weren’t, you would not have put so much marketing dollars behind it. However, looking to acquire the rights to use a mark from a competitor from the start is a bit like tying your hand behind your back before a boxing match. You may be successful enough to overcome the handicap, but if you’re just starting your business, changing brand names or logos is relatively cost-less.

 

What Does a Good Trademark even Look Like?

Trademarks need to be unique. Great trademarks are either words that are not commonly associated with the goods/services being sold (such as “Apple” for computer products or “Fender” for guitars) or such a unique name or word that no one will mistake it for something else (think “Nike” or “Gibson” musical instruments).

 

—Getting a good trademark together can require a lot of work on the front end, but once you have your brand in place you can put marketing dollars behind it without the risk of losing your mark to another business that was using the same mark before you.

 

You are going to spend marketing dollars pushing to support your brand name regardless of whether it is a good trademark (one that you can register with the USPTO) or not, so why not spend that money on something that you can register and keep without being concerned about infringement?

 

For more information on Trademarks, see our blog posts here, here, and here, or call us anytime, we’re here to help!

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