5 Things Startups Should Consider When it Comes to Their Trademark Strategy

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5 Things Startups Should Consider When it Comes to Their Trademark Strategy

Most entrepreneurs have a general understanding that branding is at the center of their business. They are aware that branding (and the trademark protections that come with it) is what distinguishes their company and its products from others, and in many cases, such as in the ...

October 12, 2020 - By Nora Labbancz

5 Things Startups Should Consider When it Comes to Their Trademark Strategy

Image : Unsplash

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5 Things Startups Should Consider When it Comes to Their Trademark Strategy

Most entrepreneurs have a general understanding that branding is at the center of their business. They are aware that branding (and the trademark protections that come with it) is what distinguishes their company and its products from others, and in many cases, such as in the fashion space and more significantly, in world of luxury goods, may be precisely the thing that entices consumers to buy a product in the first place. Having said that, many burgeoning business owners are not well-versed in the workings of trademark law and as a result, do not appreciate the value and importance of having a trademark strategy in place.

Put simply, a trademark is any word, name, symbol, or design, or any combination thereof, used in commerce to indicate the source of a party’s goods/services and distinguish them from those of others. Over time, trademarks – whether it be a brand name or logo … or the specific use of a particular color or unique product packaging – can acquire a significant amount of goodwill and reputation and become valuable marketing and advertising tools. Incorporating trademarks into your brand development process early can provide significant advantages for your business. The following are key considerations for formulating your trademark strategy … 

1. Prioritize your most valuable trademarks 

Many businesses employ multiple trademarks across their product and service offerings. For example, you may operate your business under one name and logo, sell a variety of different products each under its own unique product names, run a series of advertising campaigns featuring brand-specific slogans, and utilize distinctive product packaging. 

Given the value that trademarks can add to a business, you might be tempted to seek trademark – and/or trade dress – registrations for every word, logo, slogan, and source-identifying product  features at play. However, obtaining and enforcing a wide array of trademark registrations, particularly across multiple classes of goods and services, can be costly. As a consequence, it typically does not make commercial sense for businesses (especially those in the early stages) to apply to register every single trademark they use in connection with their company. 

Rather, you should give priority to those trademarks which provide the greatest value. For example, business names and flagship brands are more important than slogans used as part of short-term advertising campaigns or product names that are part of limited-time offers.

It is also important to remember that trademarks can be registered any time before, during or after product launch. Therefore, it is possible to obtain trademark protection after a mark proves to be commercially successful. And still yet, it is worth remembering that in an array of jurisdictions, such as the U.S., where trademark rights are borne by actual use of a mark in commerce and not by way of a trademark registration, a brand can be amassing rights in a mark simply by using it without ever having filed or received a registration for it. 

2. Keep future business goals in mind

Your trademark strategy should recognize that your brand will develop and potentially expand over time. When filing a trademark application, it is important to consider not only the products or services that your business currently offers but also those that you can reasonably foresee offering in the future. This is particularly relevant for fashion companies, many of whose offerings morph overtime to inhabit various other product categories. Hermès, for instance, made headlines early this year when it announced that it would launch a line of cosmetics. Before that, in 2017, Gucci revealed that it was getting into the home décor business, offering up “an eclectic collection of items with which customers can dress their own spaces.” Meanwhile, this summer, New York-based Rosie Assoulin, the womenswear brand known for its “bold statements of color and silhouette,” launched a natural wine label. 

With these examples (and many, many others) in mind, it is important that when preparing to file a trademark application, a brand keep in mind that such an application must list the specific goods or services for which it is seeking protection. Once you file a trademark application with a certain list of goods and services, you cannot later amend that application to add goods or services that are broader than those included in the original application. For example, if you file a trademark application today for clothing and your company decides to develop a jewelry line next year, you cannot amend your trademark application to include jewelry. It would be necessary to file a new application to capture the additional goods.

This reality must be balanced with the fact that in order for a mark to be registered in the U.S. and for a registration to remain valid, the trademark holder must use the mark in connection with all of the goods/services identified in the application. If a registration holder ceases to make consistent use of his/her mark in connection with all of those goods/services, he/she risks losing those rights. 

3. Identify key markets

Trademark rights are country-specific. A trademark application or registration in one country does not grant you rights in another. (That means that even if you have been using your brand name in commerce consistently in one jurisdiction for years, another company very well may have rights in the same trademark in a different country if you were not using and/or did not file a trademark registration for the mark in that country early enough).

To ensure trademark availability, you should consider seeking protection not only in the countries in which you currently offer products or services, but also those in which you plan to expand in the future. Otherwise, you may find your trademark unavailable in key markets, forcing your company to launch under a different brand name and, in turn, losing any valuable pre-existing goodwill.

Again, such considerations should balance current and future markets for your goods/services against the expenses associated with building and maintaining an international trademark portfolio, and any filings should be prioritized accordingly.

4. Engage in early trademark searching

Incorporating trademark clearance searches into your brand development process at an early stage ensures that trademarks of interest are available for use and registration. A trademark search should be conducted as early as possible and before significant investments are made launching, advertising and promoting new trademarks. 

While the upfront cost of a trademark search may seem high for businesses with limited resources, it is relatively inexpensive when compared to the costs of having to rebrand once a product has already been launched or promoted, let alone the costs of defending a possible trademark infringement lawsuit.

At the same time, while it may be possible to conduct your own preliminary search of the relevant trademark database (i.e., the database in the country in which you are seeking to file an application), such simple searches typically only capture trademarks that are identical (or virtually identical) to your trademark and may not identify potentially relevant and problematic trademarks. For example, trademarks that are spelled slightly differently (e.g. LYFE and LIFE), but are identical when sounded or in meaning may not be captured by such a search. Accordingly, it is advisable to seek the assistance of an experienced trademark practitioner to conduct a trademark search.

5. Secure other key assets 

In addition to trademark availability searches, an effective trademark strategy should also consider whether corresponding key assets are available. These include domain names and social media handles, among other things that are of critical important in the modern marketplace. Securing corresponding domain names and social media handles will not only complement your brand protection strategy but will also prevent potential infringers and trademark squatters from acquiring them first.

A thoughtful trademark strategy adds value and prevents misuse of your brand by others. Keeping these considerations in mind while formulating your trademark strategy will help you to build a powerful brand that aligns with your current and future business goals.

Nora Labbancz is an associate at Smart & Biggar LLP. She provides strategic counseling and IP services to clients throughout the trademark lifecycle, including clearance, prosecution, opposition, and enforcement.

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