8 Tips to Avoid Making a Bad Investment in a Trademark

8 Tips to Avoid Making a Bad Investment in a Trademark

Brand names are like babies. They are cute and adorable and folks get attached to them, often before considering how burdensome they may become. Maximizing the value of brand names is especially important for startups. Startups often have fewer marks, which means that each mark is at the core of its company’s identity and therefore has more impact on customer experience and overall brand. Moreover, startups have relatively small budgets and higher expectations for each trademark filing. Therefore, having strategies for the filing, maintenance, and enforcement of trademarks is even more important for startups.

To maximize trademark resources and avoid pitfalls, a startup must align its trademark and brand strategy. The following eight steps will help you get there:

1. Conduct a good search. Do not head straight to the United States Patent and Trademark Office (USPTO) website and file an application. That is the quickest way to receive a “likelihood of confusion” refusal from the USPTO for trying to register a mark that is too similar to someone else’s and that consumers would be confused regarding the source or origin of a product or service. You really need to either do major digging on your own or hire a professional who will uncover common law uses, state registrations, or business names that your mark could be confused with.

2. Protect word marks first. Most of the time, it is probably more prudent to seek protection for the word mark itself. Founders often want to register their logo first because they spend a lot of time, energy, and money creating it. They may not realize that a trademark registration for a word or sequence of words covers the use of those words regardless of the font, size, color, or configuration of the words. You get more bang for your buck if you apply to register just your word mark. However, if your standard word brand name is descriptive of your business, and thus not likely to merit a successful initial trademark registration, and your logo is unique, you may want to register your logo instead of or in addition to the word mark.

3. Meet USPTO qualifications. Avoid wasting time and money trying to register something that doesn’t even qualify for trademark protection. For example, a functional feature does qualify for a trademark protection. Also, uniqueness is a key requirement: you cannot seek registration for a common word or phrase that others need to use.

4. Select your marks with a lot of heart but with a dose of reality.  Avoid making a bad investment in a trademark. When you enter the trademark registration process, you have to think with your money, not just your heart. While it is important to choose a trademark you like, that resonates with the product or service that it names, you should always try to select your marks with a lot of heart and with a dose of reality. On the same note, avoid getting deeply attached to the mark before is cleared.

5. Protect your trademark abroad sensibly. If you plan to expand to foreign markets, you’ll need to register your trademark in those jurisdictions as well. Otherwise you could risk squatters, infringers, and unscrupulous local distributors. International protection doesn’t have to break the bank. Consider registering under the treaties between your home country and your target market to derive the most value from your filings. To identify in which jurisdictions you should file, consider where your customers, producers, partners, manufacturers, and potential infringers are located and how difficult it is to enforce trademark rights there. Then strategize how to protect your trademark accordingly.

6. Police your trademark prudently. Have a well-thought out plan for policing your brand.  While it’s important to protect your brand against infringements, taking on every perceived threat is costly and can even damage your trademark rights. You need to develop a realistic strategy in light of your priorities, budget, and time/resource constraints.

7. Actively manage growth of your startup. Make sure your trademark protection keeps up with your growing and evolving startup. As you add new brands, products, services, and markets, help ensure that your trademark portfolio gives you adequate coverage for your short and long term growth. Some marks may need to be extended in new jurisdictions while other marks may no longer be relevant and should be sunset. 

8. Respect the rights of others. Finally, avoid infringing someone else’s trademark rights. Trademark disputes may often be costly and prolonged. Trademark infringement occurs when the “likelihood of confusion” is high. An infringement may also occur when there is a trademark dilution by using a mark in a way that would lessen the uniqueness of a “famous trademark.” Thus, third party trademark rights are often overlooked especially when a startup is developing a short term advertising campaign or limited feature.

Originally published on Startup Grind, the global startup community. Also, this article has an accompanying slide presentation.

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