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Trademark help for businesses and legal professionals |
FAQ: Searching & Clearing Marks |
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Too often new and small business owners make
the mistake of not determining in advance whether the trademark they're
using is already being used by someone else. This usually occurs
because small business owners either don't understand what is at stake or
are too shortsighted to believe it is important. Some business
owners are even mislead by poor information practices
in their Secretary of State's Office, and think that because they registered their
business name, then the name is cleared for use as a trademark. The mere
fact that you are reading this suggests you are well ahead of the
game. Trademark clearance refers to the process of searching for pre-existing trademark uses of your proposed mark, and analyzing search results to determine whether or not your mark is a safe choice, free of substantial risks. The purpose clearing a mark is twofold. First, you want to make sure you will not infringe another company's trademark once you start using your mark. Second, if you want to register your mark federally, you don't want to waste the fees associated with the preparing the application and the filing fee, if you can establish ahead of time that the mark is already being used. The search you need to conduct will depend on your case. There is virtually no limit to the amount of money you could spend in conducting an exhaustive trademark search. However, most companies find that a search of existing and pending State & Federal trademarks, together with a search of common law marks provides a reasonable balance between risk reduction and expenditures. Of course, If you are less risk tolerant, and have the extra cash, you may prefer to supplement the standard search in various ways that may be appropriate for your particular situation. Once the search is done, you will want an attorney to interpret the results. This is because the analysis of whether a proposed mark infringes an existing mark involves a highly complex body of case law which attempts to delineate when a mark is likely to cause confusion among consumers. The legal analysis provided by an attorney is commonly referred to as either a clearance opinion or an availability opinion. Pro se (self-help) parties should not undertake this task lightly, as it usually involves fine interpretation of a complex body of case law. Pliam Law Group, P.A. will not only provide a clearance opinion at a reasonable fee, but will also arrange the search at no cost to you. We help you select the most appropriate search strategy and find the best professional search firm's for your particular needs. If you don't clear a trademark before using it, your mark may infringe an existing mark. If this happens, you will most likely be forced to stop using your mark, and will probably have to destroy all packaging, advertising and other materials bearing the infringing mark. Often the most damaging result of having to stop using a mark is the loss of customer recognition of your product or service, and the accompanying loss of business. Common sense dictates that if yours is a small service business in which customers find you by your location as well as your name, then you stand to lose much less than does the large manufacturer whose products are purchased primarily because of brand name devotion. Nevertheless, because of the potential expense of litigation, even small service businesses risk a significant monetary loss. Furthermore, if you know about a prior right in a trademark that is superior to your own, and willfully continue business, infringing that mark, you stand to loose a lot more than giving up the mark. You will probably have to pay monetary damages to the other party, which is usually disgorging all your profits except those you can prove are not due to the infringing conduct. This is an extremely difficult burden of proof for you to carry. Finally, if the mark you infringe is federally registered, you will have to overcome a presumption that you infringed willfully. If you cannot overcome this presumption, you can be liable for triple money damages, attorney fees, and more. If the other party thinks they can nail you for monetary damages, they may not be satisfied when you stop using the mark, they will probably sue you anyway. Trademark litigation is more expensive than most, and fees and costs alone average $75,000 if you go all the way to trial. Many businesses think they will simply stop using the allegedly
infringing mark if it ever becomes a problem. This is very short-sighted
since you may be sued before you have the chance to stop using the mark.
There are three good reasons a business may sue instead of issuing an
ultimatum to stop your use of a mark. First, they may want to foreclose
your opportunity to have a court judge the matter in a location convenient
to you in the event you sue for a declaratory judgment to determine
whether or not you are in fact infringing. The second reason is that the
owner of a mark may believe you should pay them monetary damages, and may
not want to let you off the hook by simply halting use of the mark. The
final reason for suing before issuing an ultimatum is to intimidate you,
thereby giving the company a superior settlement posture. It is true that not all
business owners care to get involved in litigation. However, you will
never know for certain which businesses are likely to be aggressive and
which will be more reasonable, until it is too late. One circumstance in which you may reasonably contemplate not searching existing trademarks before adopting your mark is if the cost of changing marks down the road is not significant and your general liability insurance policy covers trademark infringement litigation. Some general liability policies cover advertising injuries, of which trademark infringement is included. However, not all policies that include advertising injuries include trademark infringement, and some insurers may deem your failure to search for prior rights in a mark as the kind of willful or grossly negligent conduct that is not covered. Get a commitment in writing from your insurer specifically about trademark infringement before you purposefully refuse to conduct a full trademark search. In any event, you will save yourself much grief if you at least conduct a minimal search on your own. Another situation in which you may reasonably contemplate not searching
for prior rights in a mark is if your mark is generic, since nobody with a
generic mark can stop your use of the mark. However, there are a couple
problems with this approach; namely, you may be wrong about whether or not
a mark is generic, and even if you are right that the mark is generic, the
owner of the mark may not be readily convinced without a long and costly
lawsuit. The going rate for a high quality professional U.S. search is about $400, or $675 if you use the mark on many different products. It is almost never a good idea try and spend less than that. This section is designed for when you have virtually no money or want to make sure your $400+ dollars are well spent. First, if you can afford a professional search, you should still conduct a preliminary search (knock-off search), or have one done for you. The broader the preliminary searching you do, the less likely you will spend upwards of $400+ and wind up with nothing you can use. Thus, even if you pay for a professional search, you may want to do your own searching in yellow pages, trade journals and the Internet. Preliminary searches only look at registered marks (and sometimes domain names). Since many trademarks cannot be registered, you will miss many marks in a typical preliminary search. Second, if money is truly scarce and you run a mom-and-pop sized business, you might consider conducting the full search yourself, not just the preliminary search. Since a professional search is far more likely to find potential problems than you could find on your own, you are unquestionably taking a large risk that you won't find someone with a prior right in your mark. If so, you risk loosing your mark after investing in and growing your business. Talk to anybody who has been through that, and you will quickly learn that loss of a trademark is devastating to a business. If you are a very small business, a court is unlikely to force you to pay monetary damages unless you actually knew about the prior right and went ahead anyway. Nonetheless, attorneys fees and the costs of changing trademarks will probably bankrupt a small business. Hiring a professional search firm won't make you immune to loosing your trademark in this way, but it greatly reduces the odds of such devastation. Third, you can try and choose a mark that you don't think anybody would use. The stranger the word, the less likely someone else has it. Another advantage to this strategy, besides shoring up the odds of a successful clearance, is that made up words receive the strongest and broadest legal protection available under the law. Additionally, you may also be able to obtain a dot com that nobody else has thought of. You want to be careful when using this approach, however, that you don't choose a word that rhymes with another made-up word, or looks or sounds similar to a made-up word. Since made-up words receive strong protection, such a choice would almost certainly be an infringement. In sum, searching for existing trademarks prior to adopting your
mark is almost always the only way to go. However, if you have a small,
start-up business that simply cannot afford to clear a mark for use, by
all means, do as much as you can do to search for prior rights in your
proposed mark. Take advantage of the information on this web site to help
you determine for yourself whether a prior mark is a problem. While
clearing a mark on your own is more risky than paying a professional
search firm and an attorney, and should only be done when there is
absolutely no money available, by doing at least this much, you will be
much better off than ignoring the issue altogether. Finally, if you do
conduct your own search, make sure to print out your search results and
document your search strategy as well as the dates you conducted the
search in the event you are challenged down the road for failing to
conduct a reasonable trademark search. You may even consider notarizing
the search documents to further verify that you conducted your search
prior to using the mark. The final step in determining whether or not a mark is available for use, is to interpret the search results. This sounds easier than it actually is. There is a complex body of law that defines what is confusingly similar. For this reason, you are well advised to hire an attorney to interpret search results. The legal opinion of an attorney can serve not only as immediate advice on the risks in adopting a given mark, but if the opinion is written, which most are, you may be able to deter companies owning marks analyzed within the opinion from suing for infringement by showing them that an attorney has already decided that the marks are not confusingly similar. Since legal opinions focus mostly on those marks that are likely to lead to claims of infringement or dilution, this second benefit of opinions is no small advantage. Of course, a legal opinion can never guarantee that you won't be sued, nor even that you will prevail in a lawsuit if you are sued, since there is so much subjectivity in trademark law. However, an opinion goes a long way toward helping you control the risk of future litigation.
Many popular business books suggest that you can accomplish a competent search of existing trademarks by looking for uses of your proposed mark in the yellow pages, trade journals, the Internet, and the trademark databases available in certain public libraries, called depository libraries. This is outdated information. Because of the availability of computerized searching, you can purchase a search that is much more complete than you could do on your own Many professional search firms have software programs that systematically generate all conceivable search terms. For instance, if one of the words in your proposed mark is "SMART," then the program will generate searches that start with "s" and end in "t," or start with "s" and have "art" somewhere in the middle or end. The software program will also likely generate searches that include synonyms such as "INTELLIGENT" or "WISE" in place of smart. Thus, if the full mark is "SMART GRIP," the program will also generate searches for "WISE GRIP" and "INTELLIGENT GRIP." These are but minor examples of the painstaking combinations of search terms that a program can instantly generate and search. For a human to duplicate these combinations and perform the requisite searches is not only enormously time consuming, but risks human error. Conducting your own search should thus be reserved only for those who have absolutely no money and a lot of extra time on their hands. One other point that should not be overlooked is that if you are ever sued for alleged infringement, you will benefit from having an independent record that a trademark search was done, and you are less likely to be challenged on the basis that your search was not as thorough as it should have been. Keep in mind, while courts have not historically required searching, that is starting to change, especially if you were in a financial position to be able to conduct a search. That said, if you absolutely cannot afford the services of a professional search firm or attorney, trademark clearance is an area where doing something is far better than doing nothing at all. At a minimum, you should conduct a search of the federal trademark databases at the Trademark Office Site. You should also search yellow pages, the Internet, and all trade journals in your industry and related industries. Prior to doing conducting your search, however, it is essential that you learn what to search for. A search is inadequate if only the exact mark or highly similar marks are searched. For instance, you must search all marks with similar meaning, similar sound, and similar visual impact. For more information about what to search for, click here. Finally, Pliam Law Group, P.A. is happy to work
with pro-se (self-help) business owners. We will provide a very affordable
preliminary opinion of any marks you find that you think may be
problematic. For pricing, click here. A preliminary search only determines whether there is a pre-existing mark that is identical or nearly identical to the one you are considering adopting. It is not adequate as a final search. A low end preliminary search costs about $35-$50, and only searches federally registered. marks. A high end preliminary search costs $95-$150, and looks at state marks as well as federal marks, and comes with an attorney's preliminary opinion. A high-end preliminary search is usually worth the additional money not only because of the added service. What the low-end searchers don't tell you is that there is a good chance the first search will show a conflict, and you will have to repeat the process. A high-end searcher should typically offer 3-5 searches before you have to pay a new search fee. Thus, on the average, the high-end search doesn't cost much more than a low-end search, and yet you gain so much more. What's more, you can conduct your own free preliminary
search by using the Trademark
Office database. However, this only includes federal
marks. At a minimum, you will also want to search the Internet search
engines for your mark. Also, you must be careful not to chalk-off marks
that may not be a problem for you even if they are identical. Also, just
because a Trademark Office record indicates an application was abandoned, or a
registration canceled, that doesn't mean they are NOT a problem for you.
You should seek legal counsel when deciding whether a particular mark that
you've found is going to be a problem. We provide this service very
inexpensively. For more information, click
here. The scope of the search, including the region in which you conduct the search and the industries within which you search is dependent upon where you intend to use the mark, how much money you are willing to spend in a search, and your tolerance for taking risks. It is unrealistic for most companies to conduct an exhaustive search, assuming such was indeed possible. Therefore, most companies balance their tolerance for risk with the amount of money they are willing and able to spend. The standard search described below may be more than some can spend, and less extensive than others may wish to perform. What is important, is that you find a happy medium for your company. If you are both limited in funds and intolerant of risk, you can expect feeling quite dissatisfied with the trademark protection process. However, it is an area where investing something is truly better than investing nothing at all. Which Regions to Search Even if a mark is identical to the one you are proposing to use, you are permitted to use it as long as your product or service is not so closely related to those in existence that consumers would be confused as to who was who. One significant exception to this is for "famous" marks, which are protected by the law of trademark dilution. The number of marks that may be considered "famous" is startling, and in an ideal world you would search for identical marks in all industries. However, this is rarely done, because of cost. Generally speaking, a good search will include identical marks in all industries, and confusingly similar marks within your own industry or industries. Engaging in the trademark clearance process, even when you hire professionals, does not guarantee that you will never have a legal dispute over your trademark. For one thing, in our overly litigious society, people tend to threaten and even file lawsuits even if they are frivolous. More importantly, you must realize that not all potential problems will surface during the clearance process. Since many trademarks cannot be registered, it is impossible to uncovered all potentially problematic trademarks. Searching for non-registered marks only finds those businesses that are substantial enough to be detected by radar, so to speak. Search firms use databases of news releases and trade journals. Not all businesses appear in these databases. Thus, when it comes to clearance, you have to settle with the satisfaction that you have minimized your risk of infringing another mark. You will never have absolute certainty that your mark is free and clear. That said, you must also keep in perspective what is actually at risk. While it may be true a business evades detection in the clearance process, any business small enough and inactive enough to do so, is probably one that can be bought off more readily, or that does not have the funds to pursue you. Of course, there are cases where the first-to-use started out small, and grew much bigger and became a force to contend with. Registering your trademark federally will go a long way toward securing your rights in a mark, even when later challenged by a business who earlier evaded detection in the clearance process. Registration allows you to secure your rights across the nation, thus making you the prior user with superior rights in every area of the country except where the prior user operates. This greatly limits the prior user's ability to expand, and gives you great leverage in working out your differences with that prior user. For more information on the benefits of registration, click here. |