Founders often find themselves caught in a situation where they have waited too long to register their business name or brand name as a trademark. They have invested thousands of dollars on marketing and promoting their business or brand only to find out that they are infringing on someone else’s trademark rights or that the name is not protectable as a trademark.
I recently had a client who had launched his tech startup, had invested $20,000 on marketing and promoting his business and then received a cease and desist letter from a competitor that his business name infringed on their pending trademark application. The question that usually comes up among startups is when is the right time to trademark a business or brand name.
A trademark application should be initiated before launching a business or brand. Although there are a few factors to be considered and steps taken before applying for a trademark.
The first thing to do once a business or brand name has been decided is to consult an attorney to determine if the name is available to be registered. There may be a trademark registration or a pending trademark application for the same or similar name in which case you may be infringing on a third party’s trademark rights.
Most times business owners do a Google search to determine if someone else is using the same name. But under trademark law, variations in spelling, addition or deletion of a word, and translation of the word in another language, are considered to be infringing if the sound, appearance and connotation are similar. For example, the word “Love” used in connection with perfumes/fragrances may be considered infringing on “J’Adore” for perfumes.
A trademark attorney can do a search to determine if there are any conflicting marks and whether you should invest further in the business or brand name. If the search shows that there are others in the industry who have filed or secured trademark registration for the same or similar name, it’s best to find another name.
Determine if the Business Name or Brand is Protectible
Not all names are eligible for trademark protection under trademark law. Generic names like jewelry, photography etc. are generic terms which cannot be protected. Terms like “The Food Store” for a grocery store are descriptive and not eligible for protection. You can refer to my earlier blog post regarding eligibility for trademark protection – https://nupurshahlaw.com/2016/08/26/is-your-brand-strong-enough-to-qualify-as-a-trademark/.
Common Law Trademark Rights
It is true that you acquire common law rights in a business or brand name by using it in commerce. But if you use your business or brand name first and another company registers the same name as a trademark before you, your common law rights will not prevent registration of that mark by another company. Once filed, the only way you can claim rights in the name is by filing an opposition or cancellation proceeding before the trademark office or suing the other company in a court of law. More importantly, a trademark gets an incontestable status after five years of registration. This means that it may be harder to revoke the registration and your common law rights may be limited to a specific geographic area in which you were doing business the date the other company’s trademark registered.
In some cases, companies enter into a coexistence agreement limiting and restricting each other’s rights to specific geographic locations, certain categories of goods and services and channels of trade. The best way to avoid all these troubles is to hire an attorney to do a search as early in the business as possible.