The path to protection – good trademark strategies start at the beginning

By Kathryn Park, Strategic Trademark Consulting, formerly General Counsel for Brand Management, GE, Connecticut, USA

Introducing a new brand is a costly creative enterprise that will require taking some calculated risks. Often, the lawyer stands in the background. Attention is generally focused on the branding consultants, the surveys and focus groups that provide feedback on the branding options under consideration, the marketing team that is creating the brand story and a promotional blitz to herald its launch, and, of course, the CEO, who will unveil the brand. But do not be fooled. Legal guidance is critical to a successful and smooth product launch.

A great deal has been written about how to protect a trademark. One of the most important steps in establishing a protectible brand is trademark clearance. But trademark clearance initiatives can differ. Several strategic questions need to be addressed to determine how to conduct an effective search. Whether you are in-house counsel or advising your client as outside counsel, the following tips offer a guide.

Legal guidance is critical to a successful and smooth product launch.

Establish timelines and budgets

Educate your client about the time and costs associated with proper trademark clearance and establish a budget. Once the business plans to proceed have been approved, marketing teams typically want an immediate launch. So, it is important for counsel to explain why this may not be possible; that time is required to clear the trademark and that while things can be expedited, doing so involves a greater outlay of resources. A rapid launch may be hard to accomplish if a multinational search is required given the vagaries of how counsel work in different jurisdictions and the potential need for follow-up investigations to assess potential risks. It goes without saying that the earlier the lawyer is involved, the better are the chances of securing rapid trademark clearance. As a lawyer, you can help troubleshoot preliminary searches to weed out potentially unusable and unregistrable marks.

Select where to search

Selecting where to conduct searches to clear a trademark for use can be more complex than it might first appear. Many brands are intended for use in multiple jurisdictions, but there are few, if any, companies that will underwrite true global trademark searching. In practice, companies opt to conduct searches only in the most important markets. In making this compromise, they reason that if a mark is available in those markets, it is unlikely to face serious challenges elsewhere. However, identifying those critical markets is more than just sizing up the largest potential customer bases. Those markets matter, of course, but it is also important to take into account the country in which your client’s major competitor is based and where it is sourcing goods. For example, while a search of the European Union Community Trademark database gives a snapshot of the European playing field, if your client’s competitor is a company based in Germany, a search of the database of the German Trademark Office should also be considered.

Today, there are many great services that promise and deliver faster comprehensive global trademark searches. Artificial intelligence has greatly enhanced the speed at which search results can be compiled and delivered.

You also need to consider countries in which you will seek recordation of your client’s trademark with national customs authorities. They are key to border enforcement and protection against counterfeits. These documents are typically based on a valid and subsisting trademark registration in the country in question. Customs can stop the export (and import) of counterfeit products. If the mark your client is considering will identify a product that is likely to be copied illicitly, countries at higher risk of manufacturing and exporting counterfeited goods should also be included in the search strategy.

Determine the classes to search

While trademarks are searched according to the class or classes of goods and services for which the proposed mark will be used, a broader look at related goods and services often offers a strategic advantage. A prior user of the mark in a related class of goods or services may have expanded its operations to those in the class of interest to your client, but may not yet have sought registration for the relevant goods or services. Or your client may decide to expand his or her usage of the trademark to different classes of goods in the future. A good knowledge of the industry in which the mark is to be used is key to making this assessment.

Descriptive marks – enhanced risks in clearance

Trademark lawyers know that the strongest marks – those that are coined (e.g. Pepsi^® or Oreo^®) or arbitrary (e.g. Apple^® or Amazon^®) and that do not indicate the product or service that is being offered in any way – are the easiest to clear. And post-registration, they are the easiest to protect.

However, for many companies, the countervailing wisdom mandates that a trademark should give the buyer some indication of what he or she is purchasing. The more descriptive a mark the harder it is to clear. Registries are crowded with similar marks requiring the parsing of often small differences. When elements of a mark are commonly used in, or are descriptive of, a particular field, the lawyer needs to weigh the number of such marks; whether they are being used by another company for the same or overlapping products and are closely similar to the proposed mark; and, whether any of the prior registered marks are sufficiently well-known for their owner to argue that they qualify for enhanced protection.

An additional step in clearing a descriptive mark involves closely examining the goods and services identified in the registrations and applications of prior users. In the United States, where a trademark identification must delineate with specificity the actual goods and/or services the mark will be used to identify, it may be possible to use and register a similar mark if the goods are sufficiently distinct. But in many other jurisdictions where more general identifications and even class headings will suffice, the mark may not be registrable absent a consent or co-existence agreement.

Consent and co-existence agreements – risks and rewards

When a search reveals a prior user or registrant of an identical or nearly identical mark, it is hard to convey the bad news. An agreement with that other party, whereby it consents to the use of the mark, or agrees to co-exist with the new mark provided certain undertakings are met, can save the day. When seeking such an agreement, the first thing to consider is the likelihood the prior registrant will entertain the request and the second is the willingness of your client to pay for such consent. Unless your client is prepared to walk away from its proposed mark if permission is not granted, or if an amount of compensation for the permission cannot be agreed upon, asking for consent is risky. Seeking permission tacitly acknowledges the validity of the prior user’s rights. Thus, proceeding to use a mark when consent has been sought but not given may give rise to a claim of willful infringement, which can lead to enhanced damages among other consequences. 

You also need to consider whether such an agreement will be recognized by the trademark office(s) in the country in which registration is sought. Not all offices will automatically accept such an agreement. Even countries that do may critically examine the agreement and may refuse to accept it if they deem its terms do not adequately prevent confusion on the part of consumers. Experienced counsel in the region can provide valuable guidance on this point.

Selecting where to conduct searches to clear a trademark for use can be more complex than it might first appear.

A third consideration is that a consent to registration, or a co-existence agreement as to the use of a mark, often only addresses current usage. Markets evolve, and an agreement that does not anticipate future changes may present serious issues for business expansion, and may give rise to expensive multi-jurisdictional litigation to resolve the parties’ respective rights.

Leaven reliance on search firms and technology with sound legal judgment

Today, there are many great services that promise and deliver faster comprehensive global trademark searches. Artificial intelligence has greatly enhanced the speed at which search results can be compiled and delivered. However, robust legal analysis and sound judgment still need to be brought to search results generated in this way. Often, depending on the nature of the product and its market, the sophistication – or lack thereof – of potential customers, and the industry practice, a mark found to be high risk in a search report may be acceptable to you and your client in light of other factors. Similarly, a mark that is “cleared” by a search report may actually pose a risk given facts that are known to your client’s business.

Beware of the unauthorized practice of law

Know your limitations when giving an opinion. Today, it is easier than ever to access information about trademarks that are registered or in use anywhere in the world. But unless you are licensed to practice in the jurisdiction at issue, be wary about giving a legal opinion about the availability of a mark. First, what might present a problem in your home country may be viewed differently elsewhere. Second, a trademark professional who understands how the laws are applied within a given country or region can better advise a client as to the risks that may arise in those locations. And third, if you are not licensed to do so, at least in some countries, you could be accused of the unauthorized practice of law.

Keep up with market trends

Be aware of trends in the industry in which the mark may be used. Ask who your client’s competitors are and look at their marks when developing your search strategy. Many branding companies capitalize on industry trends when establishing new marks for their clients. These trends may be advantageous to a company that is looking for a new brand that seamlessly enters the vernacular, but it also means that other companies may be considering similar marks. Adopting hyper trendy marks is risky, not least because of the time lapse between the filing of a trademark application and its entry (and searchability) onto a trademark register and the time frames for registration set out in the Paris Convention for the Protection of Industrial Property.

Further, consider the risk of adopting a term that subsequently may be determined to be descriptive. When companies first started filing trademark applications with the term “smart” for connected devices, trademark offices granted registrations with no disclaimer requirements. But as the term has come to be understood by trademark registrars to signify a capability, it is no longer a protectible element of a trademark registration. Even companies that had acquired trademark rights in “smart” marks have been unable to enforce them against later entrants to the “smart” field of marks.

Use common sense throughout the process

Clearing a trademark also requires common sense. Make sure you understand what an unfamiliar term means. Is the trademark clear (i.e. available) because it is a word that has a meaning that most companies would not want associated with their products? Second, how does the mark translate if it is to be used in multiple countries? Does a mark that is desirable in one region convey a negative image of the product or offend sensibilities in another region? Surprisingly, marketing teams are not always aware of these issues. A good lawyer can make such analyses part of her practice as legal issues can arise from inadvertent brand messages.