The journey of launching a new business or expanding an existing one brings the thrill of crafting a unique identity—choosing a catchy name, designing an eye-catching logo, and selecting other branding elements. This creative process is exhilarating, yet it's fraught with hidden dangers, notably the risk of infringing on another company’s established trademark. This mistake can quickly spiral into daunting legal battles, hefty fines, and the disruptive (and expensive) need for a complete rebrand. To avoid these pitfalls, here are 4 practical steps to help you and your business avoid trouble.
Step 1: Understand How Trademarks Work
A trademark can be any word, phrase, symbol, design, or a combination thereof (for simplicity I’ll refer to these generally as “marks”) that identifies and differentiates the source of one party's goods from another's. Trademarks are protected under intellectual property laws and encompass brand names, slogans, and logos.
The U.S. Patent and Trademark Office (“USPTO”) governs the protection of trademarks by granting applications for registration. A trademark does not have to be registered with the USPTO, however, it will be much easier for you to enforce your legal rights if it is. You can tell if a mark has been registered by the USPTO If you see an “R” in a circle after a mark. Sometimes you’ll see the “™” symbol after a mark. This means that the mark is in the process of being registered, or the owner is planning to apply for registration.
Finally, a trademark can be owned by individuals, corporations, limited liability companies, sole proprietors, and even trusts. So you may own a registered trademark individually and license it for use in your business. Or you may own a business who holds a trademark and licenses it to your other companies. Be sure to consult with a trusted attorney to learn more about ownership options, and the pros and cons of each.
Step 2: Conduct Your Research
In order to secure a trademark, you should always conduct an exhaustive search to ensure the chosen name, slogan or logo isn't already in use. This involves several critical steps:
Trademark Databases: Start with the USPTO database or equivalent databases in other countries. These resources list registered trademarks and are indispensable for determining potential conflicts with existing trademarks. U.S. States also register marks, so make sure you’re also checking each State’s database.
Internet Searches: Beyond formal registries, conduct broad internet searches to discover unregistered trademarks, which still enjoy legal protection (under a concept known as common law) based on actual commercial use.
Social Media and Domain Checks: Investigate social media platforms and domain name availability to gauge if a prospective brand name is in use in less formal contexts, potentially unregistered yet actively used.
Professional Assistance: Given the complexities and time commitment of trademark searches, consider enlisting a trusted advisor to do the work for you. A LIFTed Business Advisor can provide expertise in navigating a complex legal landscape while evaluating the likelihood of confusion between similar marks. Which brings us to Step 3.
Step 3: Evaluate the Risk of Confusion
Trademark infringement hinges on the "likelihood of confusion" standard, which determines whether consumers could be misled about the source of goods or services due to similar trademarks. So when selecting your branding elements, consider:
Similarity of Goods/Services: Does your product or service overlap with those identified by the existing trademark?
Distinctiveness of the Trademark: How well-known or recognizable is the existing trademark?
Similarity of Marks: Are the trademarks similar in appearance, sound, or meaning?
Answering "yes" to any of these questions may significantly increase the risk of legal challenges, so be sure to consult with a LIFTed Business advisor who can evaluate your mark and advise you on whether the mark meets the “likelihood of confusion” legal standard.
Step 4: Consider Geographic Reach and Industry
Trademark rights are generally confined to specific geographic regions and the types of goods or services for which the mark is used. For instance, a local dry cleaning business might not infringe on a software company's trademark even if they share a similar name. However, if your business aspirations are national or global, or if there is any overlap in industry sectors, you should conduct a broader and more thorough search, just to be extra safe. Again, a trusted advisor can help.
If All Else Fails, Be Prepared to Rebrand if Necessary
Despite taking all these precautions, life happens. Sometimes trademark conflicts go unnoticed until years after your brand is already established. If that happens, be sure to be prepared to conduct a total rebranding process. Being flexible and having a contingency plan will mitigate more severe consequences, such as litigation. And having a trusted advisor on call will help make the process smoother, decreasing disruptions to your business.
The Trusted Advisor Your Business Needs
Knowing how to avoid accidental trademark infringement is crucial for any business. By understanding the significance of trademarks, conducting thorough research, and seeking professional counsel, you can avoid time consuming and expensive consequences, freeing you to focus on your company’s cash flow.
As your LIFTed Business Advisor, I’m here to serve as the trusted advisor you need to ensure your company’s success and prevent any accidental negative consequences. You don’t need to go it alone.
Schedule a complimentary call with us today to get started.
This article is a service of a Personal Family Lawyer®. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices with your business throughout life and in the event of your death. We also offer a LIFT Business Breakthrough Session™, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
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