Protecting Your Valuable Brands
Trademarks are the brand names and logos that your customers have come to recognize as signifying that a product is YOURS. As such, they are probably the most valuable assets of your business, unless you have some extraordinarily valuable patents. If you’re a new business, then your trademarks aren’t yet valuable, but they will be. Think of trademarks as the “buckets” in which all the good will and positive reputation are stored over the years as your customers use your products. Mature businesses own many full buckets. New businesses need to make sure they have buckets, and that they don’t leak.
Startup businesses teach us many lessons about trademarks. Few new businesses want to invest much in legal fees when they have better uses for their precious capital. I usually advise about ways start-ups can put off their investments in patents as long as possible without losing rights. But with trademarks, a little legal work at the beginning can avoid major expensive legal headaches down the road.
Thankfully, trademark protection is fairly inexpensive. To be precise, it’s literally “free,” because simply using a trademark gives you rights under the common law. But those free common law trademarks aren’t cheap when it turns out you have selected a trademark that infringes someone else’s rights.
That’s why at a bare minimum, every new brand name must be searched before it’s put into use. A tiny investment in the reality check of a trademark search can help you avoid having to drop a brand name you’ve already invested heavily in (packaging, inventory, marketing). I have personally seen cases where a startup business failed to invest a couple hundred dollars in a trademark search, and failed because of it. Failing to search a new trademark, especially for a new business venture, is probably the biggest legal blunder imaginable, and the cheapest to avoid.
As a firearms industry specialist, I personally search all firearms-related trademarks filed each month. That helps me to spot any conflicts with my clients’ rights, and to keep my finger on the pulse of the industry. It’s an added benefit my clients enjoy for hiring a specialist, instead of the attorney in their home town.
The Benefits of Trademark Registration
If you can get trademark rights for free under the common law, why bother invest in registering them? There must be a good reason why essentially every well-run company you respect registers their main trademarks, as well as trademarks for every major project and feature they offer.
I detail the benefits of trademark registration in my free book, but I’ll summarize my favorite ones.
First, considering the importance of trademark searching, imagine a competitor is picking a trademark. Supposing at least they are smart enough to search, you can see that of your trademark is registered, it will be there in the public search database form them to find. That way, they’ll pick another one. Which is a whole lot better than if they picked one that conflicted with yours, and you ended up with a lawsuit. You would probably win the lawsuit, but it would be an expensive headache. Trademark registrations mean avoiding legal fees.
Second, imagine your competitor foolishly fails to search but applies to register their brand (this happens a lot when people try to do-it-themselves). The trademark examiner will find your trademark in the database, and use it to reject the competing application. It’s like having a watchdog guarding your trademark assets for generations to come, and it doesn’t even cost you an extra penny!
Third, a registered trademark not only gets more respect from your competitors, but it has more legal power. You’ll probably never need to file a lawsuit to enforce your rights, because when an infringer learns that a trademark examiner has given your trademark the seal of approval, they’ll know that it will be an uphill battle to convince a judge otherwise, and will be more likely to back away. Your trademark registration helps to avoid lawsuits, and makes your case stronger if you do have to sue.
Fourth, if you think you might someday sell your company, or shares on the company, there will inevitably be a bean-counter who is calculating what your company is worth. One of the items to evaluate will be the stack of registered trademarks (and patents) on the table. It’s simplistic to judge value by the height of the stack, but it’s human nature. Registered trademarks are assets that add to the value of your company.
How to Decide What Trademarks to Invest In
Many of my clients started off with dozens of unsecured trademarks, which I helped them turn into a secure portfolio of assets to enhance the value of their businesses. It’s a no-brainer to protect your core brand, the name that goes on every one of your products. But then you face the question of whether to protect all your brands, or to let some go unsecured, without the benefits of registration.
The rule of thumb is to ask yourself: “If my competitor started using a similar brand name (or logo), would it really bother me?” If it really wouldn’t bother you, then you’re probably OK skipping the small investment. But if it’d get under your skin, then you’d really want to have a registered trademark, both to help prevent the conflict in the first place. You can usually trust you gut on this, but I’m happy to help you weigh the options.
What’s the Hurry to File a Trademark Application?
Unlike patents, which have hard and unforgiving deadlines, Trademarks are more forgiving. I have countless clients who had a catalogs full of unsecured brands, and I helped them get fully registered, even though some of those brands were decades old. So it’s never too late.
But it’s happened again and again that a client who put off securing their trademark finds that a trademark that should have been quickly (and cheaply) granted ends up rejected by the trademark examiner because someone else “got around to it” first. We then have a legal headache to unscrew the problem, and my client ends up with weaker rights than they would have, after spending more on legal fees.
Granted, if you have a catalog of unsecured brands, we can start a schedule of getting them registered over a period of months to spread out the investment. But it’s wise not to let the forgiving nature of the trademark laws lull you into procrastinating the important project. The good news is that once you get my office started on securing your valuable brands, you won’t have to worry about it anymore.