LELG TM Monitoring and Policing Advisory -- Public Version (00028312)

8/3/2019 LELG TM Monitoring and Policing Advisory -- Public Version (00028312)

1/5

The Importance of Trademark Watching and Policing

Part I of II What is It, and Why Should You Care?

Key Definitions

A trademark is a product or service name, such as IPAD or GOOGLE. Usually a

companys name and key advertising slogans also are trademarks.

Technically, a trademark applies to goods and a service mark applies to services.

For the purposes below, there is no difference between the two. Accordingly, this

document refers to both collectively as trademarks or marks.

Key Takeaways

Preserve Your Mark Strength. If you dont monitor for infringements ofyour mark and promptly take action to stop them, your mark almost certainly will weaken(your mark turf will shrink) and your mark may die.

Strong Marks Build Your Businesss Value. Your marks can be your mostvaluable assets in an exit strategy (e.g., sale of the business) or in franchising. Thus,

preserving mark strength builds business value.

Strong Marks Help Your Sales. Keeping your marks free of infringingencroachment helps to maintain your distinctiveness in the marketplace, which

distinctiveness can translate into stronger sales.

Budget Time and Money for Monitoring and Policing. You need tocommit effort to, and to budget money for, mark monitoring and policing. Failure to

consistently monitor and police is one of the most common (and most painful) markmistakes we see.

Do-it-Yourself Monitoring? You can do some infringement monitoring onyour own. While you probably will miss important things, its better than doing nothing.

{00028309.DOC;}


2/5

Yet, you should use a professional watching service combined with experiencedtrademark counsel to conduct effective and timely watching.

Police Infringers ASAP! If and when you find someone infringing on yourmark turf, take action immediately. Sitting on a known infringement for even several

weeks in some circumstances can preclude you from stopping that infringement. Worseyet, the existence of that infringement may make it difficult or impossible to stop others

in the future from committing similar infringements.

Why This Matters to Your Bottom Line

If you spent a fortune to build a new headquarters for your business, should you

save money by not maintaining and securing the property? Would it be better to let the

building be looted and crumble?

Of course not. Yet, business owners commonly choose such false savings when it

comes to their marks.

Well leave how to choose a good mark for another day, but, in a nutshell, you

need to choose a distinctive mark and then have legal clearance research performed to

make certain no identical or similar marks are being used to sell similar products orservices. And then you should federally register it.

Unfortunately, many business owners stop at registration.Big mistake.

Just as buildings dont maintain themselves, marks dont monitor and police

themselves. A mark owner needs to watch for, and take prompt action against,

infringements of its mark. If you dont, the mark will weaken and may eventually die.

We see this unfortunate situation frequently: A new client comes to our firm to

get help with a new infringement a confusingly similar product, service or companyname that recently popped up and thats causing a problem, such as confused consumers

and lost sales. When we investigate that clients mark, we discover that (even if the mark

has already been federally registered) the client has allowed too many infringementweeds to grow up around the mark over the years.

If those weeds had been pulled consistently, we could have stopped the new,

hurtful infringement. But the new client allowed weeds to proliferate, sometimesunknowingly. Because of the weeds, usually the new problem cant be stopped.

Mark monitoring and policing can improve the bottom line of your business:

Boosts the Sale Value of Your Company. If your exit strategy is to sellyour business, thenyour registered marks will be key assets in the sale. If your marks

are federally registered and if you can show you have continually defended them from

{00028309.DOC;}2


3/5

infringing encroachment, that should raise the value of your business. The prospectivebuyer will see that it will have the legal power to keep mark copycats at a safe distance.

o Disclosure During Sale. When you sell your company, itwill be Trademark Judgment Day. You will be asked by the prospective

buyer to disclose the marks your company owns and uses, whether thesemarks are registered, whether those registrations cover all of yourimportant products and services, and all information in your knowledge or

possession about any infringements of, or challenges to, your marks.

Enables Franchising and Boosts Your Franchise Value. If you willfranchise your business, it also will be Trademark Judgment Day. Your marks will be

the core assets in the franchising. You will have to disclose in your franchise documents

any problematic issues with your marks. If the problems with your marks have grown big

enough,you might be foreclosed from franchising. Also, a franchisor generally musttake legal responsibility for any trademark trouble encountered by the franchisee that

arises from using the franchisors marks. Thus, use regular monitoring and policing tokeep your marks clean and strong in order to keep the franchising option open andattractive.

Boosts Sales Through Your Brand Distinctiveness. Well protected marksshould boost sales of your worthy products and services. If consumers like yourtrademarked products or services, your sales should be stronger if you consistently keep

competitors from adopting confusingly similar product names.A distinctive and well-

maintained mark is a powerful beacon to potential customers. On the other hand, ifcompetitors crowd you by adopting similar marks, consumers might view your products

and services as generic. The image of poor quality that might be created by competitors

products might rub off on you. (If your strong and well-maintained marks boost sales,those stronger sales records should lead to a higher sale price if you sell your company,

or your ability to charge higher franchise fees if you franchise.)

Helps Protect You in Social Media and Cyberspace Generally. In thefuture, you may need to wrestle for control over akey presence in social media or

elsewhere online, such as a Facebook page address, Twitter handle or domain name that

matches your company, product or service name. That fight is often a trademark fight, so

having a federally registered, well-maintained mark will be invaluable.

What Constitutes Mark Infringement?

What does infringement mean? Well, as in horseshoes and hand grenades, close

counts in marks. When you own a mark, you not only can stop someone from later using

the exact same mark to sell the same product or service, but you also can stop someonefrom later using a confusingly similar mark to sell even a similar product or service.

This means you have a zone of protection around your mark your mark turf.How big that turf is depends on several things, such as how inherently distinctive your

{00028309.DOC;}3


4/5

mark is and whether you picked a mark that is unlike any other mark being used to sellsimilar products and services.

Some marks have really narrow turf essentially covering only exact matches ofa mark for overlapping goods/services. Other marks have wide turf the power to

preclude even moderately similar marks used for even similar or complimentarygoods/services.

What Can Happen if You Dont Watch and Take Action Promptly?

Once you pick and legally clear your mark and commit to it, you need toimmediately begin watching for anyone who invades your mark turf.

The best reason to conduct watching is tonip problems in the bud. If you identifyand contact a user of a confusingly similar mark as soon as it starts usage, it may be

amenable to making a name change because (a) it will not yet have built goodwill

(consumer recognition) in the name, (b) it may not yet have invested much money in thename, and (c) if its a new business, it probably doesnt have much money with which to

fight you. If the user becomes entrenched with the mark, the opposite may become true:

(a) it may have built goodwill in the name, (b) it may have spent a lot of money to

develop the name, and (c) it may have grown the economic power to fight back.

Also,marks require continual care and attention or they can be lost. If you

know or should have known that an entity is infringing on your mark and you dont doanything about it, eventually it will become too late to take action. Something called

laches or estoppel arises. In plain English, this means your delay in taking actionagainst an infringer, coupled with the infringers continued investment in its business

under the name it adopted, may prevent you from doing anything to stop the

infringement. In some situations, a delay in taking actionof only several weeks can beenough to foreclose ever taking action against a target.

In addition, if others start to encroach on your mark rights by adoptingconfusingly similar marks for similar goods and services, the overall power of your mark

may decline your mark turf shrinks. The more you allow folks to crowd your mark, the

less capable your mark becomes of pushing away imitators. Eventually, your mark rights

can die from too much encroachment.

Also, whenever someone applies for mark registration, the U.S. Patent and

Trademark Office (the USPTO) will publish that application before granting theregistration. Such publication creates a30-day window for objecting to registration, such

as objecting on the ground of mark infringement. Generally, you have more leverage and

more legal options if you object to a potential mark registration during the oppositionperiod than you do in waiting until the registration has issued.

You should resist the temptation to brush off possible infringements of your mark.In the past, we often have heard from a new client who knew of a possible infringement

{00028309.DOC;}4


5/5

{00028309.DOC;}5

but sat on the issue, waiting to see whether the putative infringer would get businesstraction. Such a wait and see approach is the wrong way to go. Waiting too long may

limit your legal options, weaken your mark, greatly increase the expense of dealing with

the foe, and, potentially, destroy your mark.

Ultimately, mark rights (and all intellectual property rights) are like other kinds ofproperty you might own land, buildings or hard assets. They require regular upkeep andmust be protected against vandals and squatters. Such regular upkeep costs money, just as

with tangible assets.It all comes down to realistic planning and budgeting.

Part II of II How to Do It

[This part of this advisory is available only to in-house counsel, corporate

decision makers, entrepreneurs and advertising/marketing professionals. To request thisPart II, please send an email from your business email account to

[email protected]. Well email it to you and not otherwise bug you.]

Disclaimer This document is generalized advice about an aspect of mark law. It

has not been customized to your legal needs and may not be appropriate for your legal

needs. Feel free to call us to consult regarding your situation. Also, if you have doubtsabout what you should do, we should talk.

Last Revised February 16, 2012

Leading-Edge Law Group, PLC

Wilton Park

4905 Dickens RoadSuite 100

Richmond, Virginia 23230

804.343.3220 voicewww.leadingedgelaw.com

2004-12 Leading-Edge Law Group, PLC. All rights reserved.
mailto:[email protected]:[email protected]

Documents

LELG TM Monitoring and Policing Advisory -- Public Version (00028312)