Do You Have a False Sense of Security about your Brand?

Business owners frequently have misconceptions about the legal status of their core brand.  For the purpose of this article, when I refer to a “core brand” or simply a “brand”, I am talking about the name a business uses to identify itself.  A business’s core brand might also include one or more logos or slogans, but here I want to focus on the words that your customers or clients use to identify your business as the source of a certain type of goods or services.

We frequently meet with clients that are blissfully unaware that they have not done the foundational legal work necessary to clear and protect their core brand.  These are relatively inexpensive tasks – especially when you consider your business’s brand is on the line.  Nevertheless, businesses sometimes incorrectly believe that because they have done one or more of the things listed below, they are legally entitled to conduct business using their core brand.  Here are five examples of things that do not legally entitle you to conduct business using a particular brand:

  1. Forming or registering your company with a state’s Secretary of State.  In order to form a company, a typical first step is preparing and submitting a document to a state’s Secretary of State’s office.  You must include the name you desire for your company, and will not be permitted to form the company if another company already exists in that state with the same name.  Assuming you have (a) chosen a name that the Secretary of State’s office approves, and (b) met the other legal requirements, your new company will be formed.  You will get an official document bearing your new company’s name and a letter stating that your company has been approved.  Understandably, this often gives business owners the idea that they are legally clear to start conducting business under their new company name.  Legally, however, this is not the case.  Having a company named registered with the Secretary of State in one or more states does not necessarily mean that you are clear to conduct business under that name.
  2. Having the “dot-com” version of a domain.  One of the most common tasks a new business owner will do early on is check to see whether the “dot-com” version of their company name is available for registration.  If so, that often leads to the false conclusion that there are no legal issues using their core brand.  This is incorrect for multiple reasons.  For example, one criteria that is used in determining whether a legal conflict exists with a business’s core brand is whether the business name is “confusingly similar” to another.  In other words, having the “dot-com” domain of your business’s exact name does not mean there aren’t other business out there with confusingly similar names (or even an identical name but a different domain or no domain at all).
  3. Using a different spelling.  From time to time we encounter clients that believe they can avoid a conflict by using a unique spelling.  In other words, these businesses are often aware that a company with a similar brand already exists, but they are going to distinguish themselves by using a K instead of a C, or a PH instead of an F for example.  This doesn’t improve your legal position because phonetic sound-a-likes are treated as identical for trademark law purposes.
  4. Conducting business for a long time.  We often hear from clients that they aren’t worried about a legal brand protection strategy because they have been using their core brand for years and never had a problem.  This “head in the sand” approach is dangerous.  It is true that one can obtain certain common-law rights by using a brand in commerce, however simply using a brand doesn’t tell you anything about other companies out there using potentially confusing names.  Having an understanding of the overall trademark landscape relative to your core brand is essential in helping develop a smart legal brand protection strategy.
  5. Filing a trademark application.  We commonly hear businesses misstate that they “have a trademark” when in fact, what they have done is file a trademark application.  Filing a trademark application might be a good step in the right direction toward protecting your brand, but it doesn’t give you any legal protection.  The trademark application process can take a long time; it is not unusual for the process to drag on for more than a year.  While your trademark application is pending, the legal status of your brand is no different than it was before filing the application.

The first two steps in building a smart legal brand protection strategy are (1) consulting with competent trademark counsel that can work with you to identify the marks you should protect, and (2) have a comprehensive trademark search performed for your core brand and any other important marks.  The most valuable part of a trademark search is having someone that knows what the results mean interpret them for you.  If you have not done this for your business, you risk making an expensive legal mistake that could have been avoided.