DO LITTLE GUYS STAND A CHANCE? by ANTHONY VERNA, managing partner, Verna Law RECENTLY, I COUNSELED AN INDIE FOOD company that was dealing with the possibility of having its company trademark registration cancelled. The plaintiff in the cancellation proceeding was a multinational food conglomerate. Understandably, the indie company was particularly concerned about how the size and financial resources of the plaintiff could help them win the case. She asked wearily, “Do little guys ever win?” Surprisingly, the answer is yes. Although it appears as if smaller businesses can be bullied when it comes to trademarks, there are definitely ways to triumph and emerge unscathed from such matters with good legal counsel and research. TRADEMARK APPLICATION VETTING Understanding how your trademark plays out in a specific industry—such as youth entertainment or home furnishings—is critical. Note that throughout the trademark application process, there are two points at which a third party can challenge the application or registration: • After a trademark application is reviewed by the U.S. Patent and Trademark Office and given tentative approval, it is published in the Official Gazette and third parties have a 30-day window. • Any time after registration. This is why legal counsel will conduct an extensive trademark search, which can unveil a number of challenges in addition to opportunities for brand identification. The reasons for opposing a trademark application or petitioning to cancel a trademark registration vary, but there are three main reasons: • Likelihood of confusion between the parties’ marks. For example, a doll called “Barby” is a conflict with the well-known “Barbie” doll. • The defendants’ marks dilute the value of the plaintiff’s marks and tarnish the reputation of the plaintiff’s
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marks. For example, any mark with the name “Mario” could result in opposition from Nintendo. • The defendant abandoned the trademark. While trademark oppositions and cancellations do not come with monetary damages, the threat of cancelling a registered trademark or an application that has been a year or two in processing, along with the costs of discovery, can result in a “mini lawsuit” of sorts. SEARCH RESULTS AND OPINION LETTER Once an in-depth trademark search is completed, legal counsel will review the results and draft an “opinion letter” identifying the positives and negatives of the proposed trademark. Remember: Trademark law is about using the mark in commerce on goods or to advertise services, so the goal of the search is to find trademarks already in use in the U.S. Trademark searches should cover: • U.S. Patent and Trademark Office (USPTO) registrations and applications • State corporate filings • Domain name registrations • Common-law use A trademark search reveals possible plaintiffs. Some of these may be bullies, but others have legitimate reasons for potentially challenging a trademark. Does the trademark cause a likelihood of confusion with other trademarks that are already registered or in use? For example, LEGO may have a problem with a company using LEGO as an acronym for a product name. Or, LEGO may have a problem with a trademark such as “PLAYGO,” which has a similar sound to “LEGO.” Potential plaintiffs are those whose marks are either registered before another’s trademark or in use before
another trademark. Many businesses find themselves as defendants in either trademark oppositions in the Trademark Trial and Appeal Board or in trademark infringement lawsuits in federal district court because of the lack of a trademark search. Finding these potential plaintiffs helps to judge the risk of being a defendant in a trademark dispute. WILL IT STAND OUT? Is it worth a legal dispute or is it more economical to find a new trademark? A trademark search reveals how strong a trademark choice is. For example, if there are 50 other similar trademarks for a board game in economically related goods/services, then the trademark that is chosen is particularly weak, especially if the trademark itself is related to the goods/services the mark will represent. If a search shows that a trademark is similar to others in the same industry sector, then it may be better to find a new mark. Fanciful trademarks are stronger and will probably thrive in a less-crowded field, making them easier to police and enforce. For smaller companies, this can help them stand out. Every business has competitors. One of the better methods of finding the best goods/services description for a trademark application is to review all the goods/services descriptions of competitors in order to discover the broadness or narrowness of a trademark application.