Startups, Will Your Brand Name Get You Into Trademark Trouble?

 

Startups, Will Your Brand Name Get You Into Trademark Trouble?

Author: Eric Everson JD/MBA/MSIT-SE

As a startup, your brand often means so much to the success of your company.  If your brand is confusing or if consumers fail to find the link between your brand and your products/ services, it can be catastrophic for your future.  When looking for the right brand name, a startup must be especially careful not to hedge into the lethal ground of trademark infringement.  As Forbes Contributor, Jess Collins recently noted, “In the real world of trademark law, a stronger mark has more value and greater ability to exclude others from using not only the same name, but also anything too similar.”

Whether you’re starting a local services company or the next global technology superstar, you have to be careful not to use a brand that some other company has already worked to establish.  So, where do you start?  In everybody’s favorite Dummies Series’, How to Trademark Your Brand Name, recommends that you start by creating a list of 500-1000 variations that you want to consider.  The book’s authors also cautiously point out, “Coming up with a name that appeals to consumers and gaining a nod of approval from your trademark attorney is a challenging, frustrating, and even painful process.”

So how do you know if your brand is likely to lead you into trademark infringement?  Trademark lawyer’s use a “likelihood of confusion” standard, which like all things in law is not as black and white as it may seem.  Often the legal hurdle a brand name must clear boils down to whether is it probable, under all of the circumstances, that consumers of the relevant goods will be confused.  The gray area however comes in navigating a tangled mess of case law that depending on the unique nature of each name may give some indication on which way things would fall if the court should get involved.  Attorney Rich Stem gives a more thorough review, where he also notes, “The protection afforded to a trademark owner may extend to related goods.”

In an age that increasingly embraces crowdfunding and provides for a faster concept-to-consumer cycle than at any other time in history, trademark infringement is on the rise. This is not a risk limited to small businesses as even Microsoft recently lost their trademark battle for the brand name SkyDrive against British Sky Broadcasting Group (BskyB).  In all cases, adopting a brand name becomes a business decision between risk and opportunity.  Will your brand name get you into trademark trouble?  Britis

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About the Author:  Eric Everson is software engineer with a law degree.  Passionate about matters of global intellectual property, prior to law school he earned an MBA and Masters in Software Engineering.  As the former Chief Technical Officer of MyMobiSafe.com, he is a ten year veteran technology executive within the telecommunications industry. He is a regular contributor, author, and consultant where technology and business intersect with the law.  The views and opinions presented in this blog are his own and are not to be construed as legal advice.  Follow: @iamtechlaw

Tags: Startup, Brand, Brand name, trademark, trademark infringement, intellectual property, trademark clearance, tradename, similarity, confusion, distinctiveness, WIPO

Do I Need A Patent For My Startup?

 

Do I Need A Patent For My Startup?

Author: Eric Everson JD/MBA/MSIT-SE

As a former technology startup co-founder myself, one of the early questions I asked (repeatedly) was if I needed a patent.  Having since sold my company and gone to law school, I can say definitively that pursuing a patent as a startup would not have been the best course for my venture.  Patents can be a great way to protect your innovations, but for early stage ventures, they may not always be the best strategy.

If you are bootstrapping your startup with limited capital, then there’s a good chance that a patent will be more of a financial drain than a revenue channel in the beginning.  What many entrepreneurs overlook is that there are many diverse channels of protecting your creative capital such as trademarks, tradedress, copyright, trade secret, and many more…  the cheapest and sometimes the most effective protection an early stage company can get may come through trade secret protections.

What is a trade secret?  Here’s how WIPO (The World Intellectual Property Organization) describes it: “Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret. Trade secrets encompass manufacturing or industrial secrets and commercial secrets. The unauthorized use of such information by persons other than the holder is regarded as an unfair practice and a violation of the trade secret. Depending on the legal system, the protection of trade secrets forms part of the general concept of protection against unfair competition or is based on specific provisions or case law on the protection of confidential information. The subject matter of trade secrets is usually defined in broad terms and includes sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes. While a final determination of what information constitutes a trade secret will depend on the circumstances of each individual case, clearly unfair practices in respect of secret information include industrial or commercial espionage, breach of contract and breach of confidence.”

How do you gain trade secret protection as a startup?  As a young company, you may not have the resources (just yet anyway) to build a fortress around your secret sauce, but what you can do is put layers of protection in place to keep your secrets safe.  This may consist of limiting employee access to the source or creating employee/ visitor confidentiality policies that require signatures.  It may also be attained by insisting that everyone your speak with about your idea/ technology signs a non-disclosure agreement (NDA).  The hard part that technology entrepreneurs often face is that they instinctively want to share their idea with the world.  Consider however that even the Google algorithm from their inception as a startup to this very day as a global corporation is layered in trade secret protections.  The better you protect your ideas from the beginning the stronger your trade secret defenses may be.

Patents can be very expensive whereas trade secrets often require putting cost effective layers of protection around your innovations.  So before you start shelling out those sacred startup Benjamin’s toward a patent, consider if trade secret protections may be a viable alternative for now.

Legal Disclaimer: The views in this blog are merely the opinions of Eric Everson and should not be considered or construed as legal advice.  As a former technology entrepreneur and software engineer prior to law school, he currently serves an Adjunct Faculty member of the Herzing University Technology Program Team.  As an emerging scholar in global intellectual property law, coaching early stage technology companies is a passionate area of his focus. #TINLA (This Is NOT Legal Advice)

Tags: Intellectual Property, Startup, Startups, Trademark, Trade Secret, NDA, Non-disclosure Agreement, IP, IP Law, Early Stage Venture, WIPO, Patent, Law, Legal Protection, Innovation