It took her a couple years, but small business owner Melanie Mann is glad she registered her company logo with the U.S. Patent and Trademark Office.
Mann, who co-owns Baby Swank, a Wilmington, N.C., seller of bedding, furniture and novelty items for children's rooms with partner Jamie Mayo, waited two years before registering her distinctive logo that incorporates a baby's bottom. Just two months after getting clearance, Mann received an unexpected solicitation from a children's retailer in Virginia with a logo strikingly familiar to her own.
"I was just shocked," said Mann, 33, who initially became aware of the rip-off after she received a promotional mailer sent from her competitor. "The whole thing was copied. They saw either my website or my business card."
Mann's attorney quickly fired off a "cease and desist" letter informing the Virginia business it was infringing Baby Swank's trademark rights, and it soon abandoned use of the mark.
"When you open a business you don't think about it, you're so involved in living and breathing the opening," said Mann. "You don't think that years from now someone is going to want to buy this store; someone might want to open another one."
Mann got lucky. Many entrepreneurs who follow the same course, neglecting to protect the critical identity of their business from the start, suffer consequences that include copycats or worse yet, news they have infringed someone else's name and must abandon it for a new one.
"The time to think about a brand is absolutely before the brand gets traction," said Mann's attorney, Anthony Biller, a partner with Coats & Bennett in Raleigh, N.C., and chairman of the American Bar Association's Intellectual Property Law Trademark Committee.
"A company can struggle in relative obscurity for months or even years before a brand takes off and has any presence," said Biller. "Then what happens is consumers and competitors take notice; that's when brand problems manifest."
The cost of litigation for trademark disputes, which are often tried in federal court, can run into the hundreds of thousands of dollars, costs that can quickly sink a small company, said Biller. He added entrepreneurs should consider whether a related Internet domain name is available for purchase.
Make your name stand out
Preventive measures are the best course of action for securing a trademark, Biller said, noting the development of a distinctive name early on is critical. He referred to the so-called taxonomy of brands, a legal classification system that segments trade names according to their distinctiveness and inherent strength within the category the business operates.
Arbitrary names, such as Apple Computer or Kodak, which have no readily discernable association with the business, are the strongest under trademark law, followed by suggestive names, such as American Airlines. Weakest are generic names, such as the Chocolate Chip Cookie Company, which have little or no protection due to the sea of rivals in the market. Internet companies, which often use generic names as a way to help drive traffic to their sites, usually fair poorly in trademark protection.
"A strong unique name is much easier to enforce," said Linda A. Kuczma, a Chicago-based trademark lawyer with Banner & Witcoff. Kuczma recommends small businesses eliminate some of the investigative legwork up front.
After choosing a name for their company, product, or service, they can search Google and the website of the U.S. Patent and Trademark Office to get a sense of the competitive landscape for the proposed name. Once confident a mark is unique, they should consider using a trademark lawyer to complete the process. Depending on the intended market scope for the brand name, the lawyer may use a third-party search to get an even deeper read on where the proposed identity fits in the marketplace.
"If it's a manufacturing company going to put its name on the mold of a product, costing tens of thousands of dollars, I suggest a comprehensive search," said Kuczma, adding the same holds true for new products with significant marketing backing. "If you're going to do a major advertising campaign to launch something, it's important to make sure you're not stepping on anyone's toes."
A trademark application costs anywhere from $275 to $325 for each class of goods and services, including a host of categories ranging from leather goods to chemicals and electrical and scientific apparatus. Approval can take more than a year, with rights dating back to the original application date.
Total budget for a small company, including attorneys' fees, third-party searches, and application fees, can range from $1,500 to more than $5,000, lawyers said, depending on the complexity. International trademarks, usually not an initial consideration for startups, require a whole different approval process.
While awaiting clearance, which sometimes includes several rounds of queries from the government, it's a good idea to steer clear of investing in any long-term materials with the chosen mark, said Lisa Bracken, a marketing consultant and owner of AIMS Accelerated Innovative Marketing Solutions in Silt, Colorado.
"There's no guarantee until it's approved," said Bracken, who recommends radio and other non-permanent marketing solutions during the trademark waiting period. "You can do things that are perishable, but when you start getting into collateral that is durable, like printed material, that's a much greater investment."