Can you name something that refers to
a liquid, exists only in the ozone,
must be continually defended, and is worth more than $67 billion? It’s the brand
name Coca-Cola, one of the most well-known brands on the planet.
Brand names are often more valuable
than the combined physical assets of a
company, a key reason that companies
fiercely police their brands. Words like
“aspirin” and “elevator” were once brand
names owned by successful entities.
“The initial cost of brand protection may
seem daunting for many companies,” says J.
Todd Timmerman, administrator, Intellectual
Property Law Department, Shumaker, Loop
& Kendrick LLP. “But it pales in comparison
with the value that a brand may ultimately
possess.”
Smart Business spoke with Timmerman
about how to establish, police and protect
a brand name, and why it’s money well
spent.
What is a brand?
A brand, or trademark, is whatever in
the marketplace distinguishes goods or
services originating with one source from
those originating with another. It can be a
word, a design, a symbol or a combination
of these elements, among other things.
Using our Coca-Cola example, consumers
are familiar not only with the product’s
name, but also the design elements on its
cans, slogans like ‘The Real Thing’ and
others.
What steps should a company take prior to
adopting or using a brand?
First, you must ensure that when you
choose a brand, you’re not going to
infringe on the rights of others. To determine this, you should conduct a thorough
search of all available records in the
United States. The search should include
the federal trademark register, all 50 state
trademark registers, as well as common-law databases. Many law firms have
access to online searching tools and also
regularly call on searching companies that
specialize in these kinds of searches. Both sources can generate reports very quickly
and efficiently.
Second, adopting a protection and registration strategy concurrent with the use of
a new mark is extremely important. All
trademark rights in the United States arise
as the result of use. These rights can be
expanded or enhanced by federal or state
registration, but those registrations are
also tied back to use. A company should
take steps to preemptively protect the
mark by seeking a federal registration of
the mark, or one or more state registrations in areas where they might conduct
business — not to mention international
registrations.
How can federal registration protect a
brand’s future value?
Common-law rights are based on the use
of a mark and extend geographically as far
as the trademark has a reputation.
For example, let’s look at two companies
named ABC Corp. — one initially based in
Florida and another in Washington state.
Over time, if both companies’ rights
expand, they could find that one has rights
in certain areas of the country, while the
other has rights in the other parts, and neither has the right to invade the territory of
the other. This is why a federal trademark
registration is so important. It takes what
could be a local or regional right, and
expands it to what essentially amounts to a
prior nationwide right, even absent nationwide use.
What could result from an incomplete search
or a failure to register?
If you are forced to change your brand
after the public has come to know you or
your product by a certain name, a number
of substantial expenses come into play. A
name change usually involves new signage,
collateral materials and — most likely — a
public relations campaign to let the public
know you are assuming a new brand.
You could also be liable for monetary
damages from an infringement suit, as well
as disgorged profits that you’ve earned
with the brand. At the very least, you could
be forced to pay off the original user of the
brand name.
How can a company protect established
rights in a brand?
It is extremely important that companies
continually police their brands. A grass-roots policing program can be used where
the sales force keeps its eyes open for
potential infringers or misuse of the brand.
There are also services that monitor the
Internet and the marketplace for brand
abuse.
Once infringements are identified, they
must be addressed. If you allow infringement to continue, you may ultimately be
stripped of your trademark rights. This can
be an expensive and painful process. You
are generally much better off dealing with
infringements promptly, rather than letting
them linger and putting your company in a
position where it has to explain its delay.
J. TODD TIMMERMAN is administrator of the Intellectual
Property Law Department of Shumaker, Loop & Kendrick LLP.
Reach him at (813) 227-2243 or [email protected].
