Getting the Name You Want: Dealing with Trademark Obstacles
I wish there were a marketplace for trademarks. There’s nothing more disheartening than spending time and money developing a short list of potential brand names for your latest entry into the marketplace, only to find the one that works the best, that hits your communication objectives, that everyone on your team is fired up about and ready to support…is unavailable due to a trademark conflict.
Unfortunately, it is all too familiar and likely to stay that way.
The United States Patent and Trademark Office recently reported the active trademark registrations for fiscal year 2010: a record-breaking 1,614,121. This is for the US alone. In an increasingly global marketplace, the trademark clutter is harder and harder to cut through, especially in software or consumer electronics, where your phone is a camera and a computer and by the end of this piece, it may even be a cappuccino machine.
Recently Racebrook, a private equity firm and auction specialist, put over 150 retail brands up for auction, many with long histories and fine pedigrees, offering firms an opportunity to avoid worrying about the trademark clutter and leverage existing brand equities. This also represents an opportunity for the market, as valuable intellectual property goes to those who are willing to utilize it. This was a one-time affair, but in the increasingly cluttered world of brands and marks, it may become commonplace. Naturally, it only provides a solution if one of the brands up for auction conveys the brand equities you are looking for. What to do if you have already identified a name that works for your project, but potential trademark conflicts are furrowing brows in your legal department?
It’s important to remember that a potential trademark conflict is just that – a conflict, not a dead end. And, as the old saying goes, there are many ways to skin a cat. Abandoning your team’s favored name is one option. Using the name anyway and hoping you don’t get caught is another, but I wouldn’t recommend it. (Remember: If a registered trademark owner can show willful infringement, they can get treble damages!)
A better option might be to look deeper into the potential conflict to see whether the owner of the potentially conflicting trademark is open to a sale or licensing agreement. It’s important to remember, and often forgotten, that Pepsi could use the mark COCA-COLA if Coca-Cola agreed to it, and vice-versa.
At Lexicon, we constantly look beyond the obstacle for the opportunity, whether that obstacle is strategic, legal, or linguistic. Treating potential trademark conflicts as obstacles rather than as dead ends allows us to find solutions for clients, integrating our knowledge and experience with their needs and concerns.
Some conflicts, like Pepsi trying to use COCA-COLA, or naming your software company MICROSWIFT, are not likely to be resolved except by giving up or getting sued. But if your project is an email app you want to call BLUEBOTTLE, and there is an existing registration for BOTTLEDBLUE for networking software, isn’t it worth looking into?
A licensing agreement can be a win-win for both parties. A big firm releasing their latest mobile phone OS could bundle an existing trademark owner’s app in exchange for a right to use an otherwise infringing brand name; the phone maker gets the name they want and the app maker gets increased market share.
There are obstacles to these kinds of deals. The biggest is uncertainty, hence my proposal of a marketplace for trademarks. Call it TradeMarket. It may be a pipe dream, but an open, public trademark clearinghouse could represent an opportunity to increase efficiency in the realm of trademarks. It would have to be large, and it would have to cost nothing to trademark owners to list their trademarks and whether they are amenable to a licensing agreement (or even to sell their mark, in the extreme). Then, if a firm is considering a name for their next big brand and they see a potential trademark conflict, a quick perusal of the TradeMarket could provide a path to a win-win scenario. This could spawn a peripheral niche industry for third-party neutral valuation of a brand name’s worth.
Certainly many brand owners will eschew any such offers in order to protect their brands, but that could be part of the listing as well, providing certainty to others that they should look elsewhere in their brand name development. Others could list the goods/services for which they would consider a license, and those they would consider off-limits. More certainty leads to better information, and better information leads to better decisions, creating business solutions to legal problems.
TradeMarket might be that solution. But I better check the name first…