The Risks of Trademark Registration
So…you’ve got a killer name all picked out. It’s the best name since Coca-Cola. You have some money left over in your operating budget and you are wondering what to do with it. Why not trademark registration?
This post focuses on the hypothetical registration of the fictional Rose Company, which makes wine bottle cases with a self-opening cork mechanism. The Rose Company has not yet sold anything, or even offered to sell anything, so their trademark application will be an Intent to Use Application.
Let’s look at two other Rose Marks.
- The Red Rose Company. This has been in use since 2004. They too make wine bottle cases, but without the self-opening cork mechanism.
- The Tulip Company. This is also an ITU application, but predates ours. They also make wine bottle cases, but without the self-opening cork mechanism.
The primary aim of trademark law is to protect consumers from confusion about where a particular good or service comes from. To evaluate whether a particular pair of trademarks cause confusion, the Trademark office uses a list of factors termed the likelihood of confusion factors. While the likelihood of customer confusion standard is highly fact dependent, the trademark examiners (in assessing an application to register a mark) and courts (in assessing whether a mark infringes the rights of a prior mark) tend to find the following two factors the most important:
(1) The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression.
(2) The similarity or dissimilarity and nature of the goods … described in an application or registration or in connection with which a prior mark is in use
First, let’s look at our company’s mark, The Rose Company, which again makes wine bottle cases with a self-opening cork mechanism, compared to the two other wine bottle manufactures. Regarding similarity of the marks, when examining these marks, the examiner could focus on the Rose or Tulip portion of each mark, discarding the Red and Company part of the marks. In the case of Red Rose, their mark and ours are thus identical in terms of appearance and sound, and it is possible an Examiner will find this factor weighs against the Rose Company with Red Rose. With Tulip, the story is different. Tulips and Roses are different species, and the Patent and Trademark Office has previously used this as the basis for not finding a similarity.
Regarding the similarity of the goods, all three of these companies make somewhat a similar product. In fact, our company’s product could be thought of as a subset of wine bottle cases in general. In such cases, the Trademark office has found goods which are a subset of other registered goods similar.
All in all, the Red Rose Company provides a pretty steep hurdle for our Rose Company. The name of the marks is similar enough, and when combined with the fact that our company makes a subset of goods that the Red Rose company makes, produces a moderate to high risk that the Trademark Office will find a likelihood of confusion and deny our trademark registration.
But, for the purposes of this exercise, let’s say damn the torpedoes, full speed ahead, and file a trademark application. What are the risks with such a course of action?
The first hurdle is the examiner. We will need to convince him or her that our mark does not produce a likelihood of confusion with the Red Rose Company or any other Rose company. There are several strategies we can employ here. First, we can include a logo with our mark, further distinguishing it from the Red Rose Company. Second, we can describe our goods as narrowly as possible to avoid any confusion with the Red Rose Company or anyone else. But because of the aforementioned subset problem, that strategy probably doesn’t help us much here.
If we can convince the examiner that our mark should be registered, a second hurdle presents itself: opposition. After the examiner allows the mark, the mark will be published publicly, and there will be a period where any interested public party can oppose the mark on a number of grounds, including likelihood of confusion (and the bar who is an interested party is a very low one). Alert trademark attorneys pay attention to these public pronouncements and check them regularly. The opposition proceeding looks somewhat like a lawsuit, and our Rose Company would have to convince an administrative judge that it deserves registration. After registration, an interested party can still file a cancellation – which is very similar to a opposition, except our mark would now be officially registered, which makes the grounds for cancelling it slightly smaller.
Throughout this whole process, there is the omnipresent danger of getting a cease-and-desist letter. Perhaps prior to registration, the Red Rose Company is not aware of our company or its product. But, now that they are aware, they want us to stop. Since the Red Rose Company has a registration dating all the way back to 2004, its rights are significantly superior to ours, which puts Rose Company between a rock (a possible lawsuit) and a hard place (a name change). The short term effects from a cease-and-desist letter or lawsuit would generally be: needing to pick and vet a new name in a short timeframe, having to change and retool any manufacturing processes which use the name (i.e., stamping), as well as removing any products from the market. If you decide to fight the cease-and-desist or lawsuit, additional risks include: a ban against selling any products containing the brand, monetary damages, and possibly even the other side’s lawyer’s fees. Additionally, while trademark suits are not as expensive as patent suits, they can still be a substantial expense.
All this stresses the importance of picking a name that is free and clear of any risks – better to avoid any name risk at the onset then constantly be worried about a cease-and-desist letter or even a lawsuit. If the Rose Company is not too wedded to their name, they should definitely consider changing their name.