(Published in the Piedmont Business Journal column “Parting Shots”, Summer 2013)
One of the reasons I enjoy business law is the creative, interesting and dynamic entrepreneurs I have the pleasure of working with. Their creativity has resulted in an explosion of names, phrases, and art used to identify their businesses. Unfortunately, this is another aspect of preventive law that most people do not check.
Because nearly every business of every size has a web site, their names, logos, or identifying phrases can be seen all over the globe. Accusations of infringement can come from just about anywhere, and our courthouse doors are open to litigants from all over the world.
Not only can allegations of infringement be expensive, your name, logo and phrases used to describe your business are critically valuable assets. They distinguish your business and its products and/or services from all others. This form of intellectual property represents the reputation and financial value of a business. For example, the Coca Cola swirl and McDonald’s golden arches are so well known that accompanying words are no longer even necessary.
Being forced to make changes not only costs in reworking print materials and web sites, it can have the effect of confusing customers and, worse, making them disappear altogether.
There are many misconceptions regarding the use of a name, especially on the Internet. Obtaining a domain name is not enough to keep a name safe. It is simply the first step. In fact, use of the domain name itself can lead to a claim of infringement. Names, phrases, and art a business uses should be as thoroughly considered as any other item in a business plan. It is the identification of who and what the business is. A diligent search should be conducted to look for potentially competing names, words, or logos. Then, if the mark has any value at all, I encourage registration with the U.S. Patent and Trademark Office.
Although common law stipulates that a person or a company acquires rights in a mark based on its legitimate use of the mark, federal registration provides several valuable advantages.
Federal registration provides a legal presumption of the registrant’s ownership and exclusive right to use it nationwide. Common law rights are often expensive and difficult to prove. Additionally, federal registration provides constructive notice to the public of your claim of ownership, and the ability to bring an action in federal court.
Federal registration can be a basis to obtain registration in foreign countries and it provides the ability to prevent importation of infringing foreign goods.
A good rule of thumb: Any business asset worth having is worth protecting.