Today’s topic poses an important question—and perhaps one of the very most important questions—impacting the success of any business: “What is (or what should be) the name of the business?” More accurately, the better question might be, “Does (or could) the selected name have value to the business and to its long-term success; and, if so, what should we do to enhance and to protect that value?
I suspect every reader would instantly recognize names like Apple®, Dell®, Microsoft®, Coke®, Hilton®, McDonald’s®, and Applebee’s®. No, I don’t represent any of these distinguished brands, and no, I’m not affiliated with any of them in any way other than, perhaps, as a customer and/or consumer. But used to illustrate the point, these “names” are, in fact, well-respected, exceedingly valuable, branded assets for their respective owners. In this context, it isn’t hard to understand, immediately, what’s in a “name.” And we all would recognize that the respective owners aren’t shy to enforce their rights in these valuable brand names. My premise in this article is that every business can, should, and/or might be forced at some time to consider their brand(s) within this same kind of legal context.
For those with knowledge of this topic, the article’s question touches upon brand identification, management, protection, and enforcement. In legal parlance, we’ll be discussing the body of law dealing with trademarks and service marks (which, often, are just called “marks”). Certainly, the well-heeled branding of a business, product, or service encompasses more than its name alone. Branding can also encompass stylized marks, design -based marks, logos, phrases, trade dress, product configurations, and a host of other business identifiers that, under appropriate circumstances, may be protected. In future posts, we’ll try to revisit this topic and expand the discussion to consider additional legal context surrounding some of these other types of brand identifiers.
It might interesting at this point in the discussion to point out that trademark law can be a slippery, difficult beast to wrangle. U.S. trademark law derives, in part, from our colonial period, during which time we took some of our law from the British system, which, in turn, had taken some of its roots from the Medieval system of guild symbols and guild marks. Today, the bundle of rights attendant to ownership of a trademark may be derived from one or more of common law, state law, federal law, and/ or international law.
And, yes, this topic can become complex and complicated. Necessarily, this article is limited in scope, is general in nature, and is not to be construed as legal advice. Because the circumstances and needs of every business are unique, you should always consult with a knowledgeable attorney regarding any particular circumstances and/or questions that might arise. From that conversation, you should be able to make an informed decision as to whether this topic is relevant for your business and, if so, you should be able to develop and implement an appropriate set of actions to meet your business’s needs.
The purpose of this article is not to delve into the minute details of trademark law and theory; rather, the purpose is to raise the business owner’s awareness of what really can be “in a name” and to offer ways to think about the value and importance of that brand name to the business. The idea is that, from appropriate reflection on these points, a business owner may be able to better understand the value of the business’s brand(s), and to work with legal counsel to develop a plan by which to manage, protect, and enforce the business’s rights in its important brand(s).
So, let’s dive in.
First, let’s recognize that the brand name we’re discussing here—a trademark—is not necessarily the same as the company’s name. They might be the same, but they don’t have to be; and, often, they aren’t. We don’t have to look very hard in the media to find examples of brands being bought, sold, transferred, consolidated, merged, and the like, on a fairly regular basis. A brand is often owned by a company with a very different name from it and from the various other brand names within the company’s particular portfolio. So, whether from inception or from subsequent transfer, a brand name and the owning company’s name may be different.
Let’s consider what a brand name (“trademark” or “mark”) really does in an every-day, hopefully easy to understand, way. From a legal perspective, a trademark allows a consumer of the relevant product or service to identify the “source of origin” of that product or service. That is, when I purchase a McDonald’s® -branded hamburger, I know exactly where it came from, and/or under who’s authority it was sourced, produced, and distributed. In the unlikely event that there is a problem, I know where to go to seek a resolution. In the likely event that it is fantastically delicious, I’m a happy customer spreading the word, influencing friends and neighbors, and frequenting the brand forever.
So let’s break that down a little more. Wrapped-up within a trademark is its consumer’s assessment of the brand’s reputation, status, and stature. Wrapped-up, as well, is the consumer’s perception/ expectation of quality and/or some other important characteristic(s), such as, for example, the brand’s reputation for excellent customer service, responsiveness, favorable exchange/ return/ warranty policies, open communications, and transparency; its commitment to environmental responsibility and/or social causes; its economic strength and longevity; its industry influence; its reputation for innovation; its “coolness factor;” and a host of other attributes that speak to the brand’s loyal customers through their recognition of, and identification with, the brand and what it stands for. Companies hope (dare we say, bank on the fact) that favorable brand reputation will result in significant consumer purchasing preferences for the branded product in the face of often stiff competition.
Sales. Repeat business. Likes. Shares. Spread the word. Buy our products. Companies spend vast resources to promote, enhance, and defend their brands because of the “good will” that has been established in the brand over time. And, let’s be honest, ignoring or mismanaging an important trademark can make-or-break a company of just about any size, from start-up to mega-conglomerate (is that really a thing?).
So, hopefully, I’ve made my case and you agree that your trademark is (or can become) one of the most valuable assets in your business. Assuming you agree with me (and with a host of other experts across nearly every industry you can imagine), let’s ask a few questions:
- How would you feel if someone were to copy your brand and/or brand name? To counterfeit your branded products? To trade off-of your brand’s reputation? To improperly use your brand name to cause confusion, mistake, or deception in the market place amongst similar products competing for your customers?
- Would such activities cause damage to your brand? To your business? To your profits? To your brand’s reputation? To your ability to generate future profits from the brand? To your ability to defend your brand into the future against other bad-actors? To your ability to compete fairly and on an even playing field? To your ability to license and/or franchise your brand, now or in the future?
- What would you want to do in such circumstances? Wouldn’t you want to have legal recourse?
- How would you feel if you were to adopt a mark (even if innocently) that was later accused by a competitor of infringing that competitor’s mark? Could you afford to defend against a legal proceeding? Could you afford to re-brand your business, whether voluntarily or by legal mandate?
- Can you see how vetting and acquiring trademark rights as early as possible might be important and advantageous?
- Of course, I’m not trying to play upon anyone’s fear or insecurity. Nonetheless, as an attorney, I’ve seen some pretty difficult situations arise on both sides of this particular issue. My (admittedly biased) professional view is that taking the decision to ask these questions and to implement appropriate legal strategies as early as possible in the business’s (and/or brand’s) life cycle can be more than beneficial. Sometimes, it can be a “bet the company” kind of decision.
So, what are some of the actions that an attorney might recommend to address these considerations? Let’s look at a few:
- Undertake a careful selection and vetting process for every new mark. There are many pragmatic and legal reasons to do so. For example, undertaking a formal trademark search and clearance process can help to mitigate the chances of adopting a mark that could be deemed to be infringing upon another’s mark. As well, it can provide important information bearing upon the potential strength of the proposed mark once it has been adopted and used in commerce. If the mark has already been used, it can provide important information bearing upon the scope of rights to which the mark’s owner is already actually and/or potentially entitled. Still further, it can provide the basis upon which prudent decisions can be made for using, protecting, enforcing, and defending the mark going forward.
- Once a mark has been selected and appropriately vetted, one can make decisions regarding use, identification, and labeling of the mark in advertising and marketing campaigns, branding, store front signage, collateral materials, packaging, web- based uses, and the like.
- Once a mark has been selected and appropriately vetted, one can make decisions regarding the desirability of filing of application(s) for registration of the mark before appropriate state, federal, and/ or international authorities. If such filings are to be undertaken, decisions can be made and effectuated regarding the scope of rights to be sought, the appropriate processes and procedures for doing so, the benefits and risks of doing so, the attendant costs, timing, and the like.
- Once a mark has been selected, appropriately vetted, and used, one can make decisions regarding policies, procedures, training programs, and the like, for in-house and third-party uses of the mark. One can make decisions about policing, enforcing, and defending the mark into the future.
- Once a mark has been selected, appropriately vetted, and used, one can make appropriate decisions regarding management and disposition of the trademark asset, its valuation, and its broader commercialization and monetization.
These are, of course, only representative of some of the recommendations, considerations, and decisions that might arise in the life-cycle of a particular mark. Again, and as always, there is no substitute for conferring with an attorney regarding these kinds of matters.
I hope this article has given you a bit more perspective regarding your important trademark assets. I appreciate your having read and considered it. As always, don’t hesitate to get in-touch with any questions, comments, suggestions, etc.