Unraveling Trademarks, Legal Hurdles, and Key Insights
In the realm of business, naming isn’t just a choice; it’s a critical strategic decision that can make or break a brand. Exploring the intricacies of this domain reveals a multifaceted landscape that demands attention to legal nuances and trademark essentials.
Navigating Legal Quagmires: The CarMax vs. TJ Max Case
A striking example showcasing the unsuspected legal intricacies even major corporations encounter in naming strategies. This underscores the crucial need for a profound understanding of trademark laws and the risks they pose.
Unveiling Misconceptions: Trademarks vs. Business Names
One of the fundamental revelations highlighted is the misconception that registering a business name ensures trademark protection. This disentangles a common misunderstanding and stresses the importance of a comprehensive trademark strategy.
“One of the fundamental misconceptions is that registering a business name ensures trademark protection.” -Mike Carr
Trademark Fundamentals: Company vs. Branded Names
A pivotal distinction brought to light is the divergence between a company name and a branded name through the exemplar of “Odyssey Coffee.” This distinction is pivotal in navigating the landscape of trademarks.
Copyright vs. Trademark: Debunking Common Myths
Clarity emerges on the critical divergence between protecting creative works and safeguarding brand identifiers. The conversation demystifies common misconceptions in this domain, shedding light on the nuances between copyright and trademark protection.
Attorney vs. DIY: Weighing the Approaches
The discourse delves into the debate of handling trademark filings independently versus seeking professional legal counsel. It underscores the potential pitfalls and benefits of each approach, emphasizing the prudence of expert guidance.
Proactive Trademark Registration: An Insurance Policy
Emphasizing the proactive nature of trademark registration as a safeguard against potential legal entanglements, underlining its significance in securing a brand’s future.
Preview of Effective Strategies: Navigating Naming Hurdles
Teasing forthcoming insights into strategies aimed at steering clear of naming obstacles and overcoming potential legal challenges, offering a glimpse into proactive approaches to fortify a brand’s identity.
In a landscape where every word carries weight, this conversation provides indispensable insights into the labyrinth of naming and trademarks. Understanding these intricacies is not merely a choice; it’s a strategic imperative for every business navigating the domain of brand identity.
Well, happy Tuesday everyone, and welcome back to Naming in an AI Age with the NameStormers and happy almost Thanksgiving. Mike, I need to know what’s your favorite Thanksgiving dish and then what’s your least favorite dish?
It Is chocolate cream pie. It’s fantastic. I’ll eat chocolate and I only get it for the holidays because it’s a pain to make, but I love that. Sweet potatoes, not so much, but chocolate cream pie. I can eat that instead of the main dish.
Okay, so yeah, my favorite Thanksgiving dish is my mom’s twice baked potatoes because it’s not good enough to just cook potatoes. One time they got to be cooked twice and she puts cream cheese and chives and a bunch of yumminess. But the dish that I say no to, I agree with you, Mike. It’s the marshmallow. It’s not just sweet potatoes, it’s the marshmallow sweet potato casserole. I don’t even know what you call it, but it’s gross. Absolutely not. No way. And so speaking of saying no to things like marshmallow sweet potato casserole, let’s talk about naming. And when you get that dreaded no on a name, there are many ways to get a no on a name, but I want you to talk about the biggest and also usually the most often understood. No when it comes to naming,
Right? And so the thing that I think many of our clients, even many of our most sophisticated clients underestimate and are surprised about is a potential legal conflict. It’s this threat of, oh my God, I’m going to get sued. And so there’s this aversion to any possibility of a legal challenge. And so that is often underestimated for our larger clients or mid-size clients. And for our smaller clients, they don’t really understand how to navigate that path. And an example years ago is Circuit City came to us and they wanted a name for a used automobile dealership. We came up with the CarMax name, and CarMax was sued by TJ Max for a trademark infringement, which sort of caught everybody off guard. So sort of navigating that understanding when you’re at risk, how do you interpret trademark log? You really need to even worry about that if you’re a small single mom and pop or all the kinds of things that we talk about.
And I think one of the big misconceptions, and so one of the ways to avoid getting that big no is understanding that when you register your business with your county or your state as your DBA or doing business as name your company name and they give you the green light that has nothing to do with trademark law. And so a lot of folks come to us and said, well, I registered this name with the state, the Secretary of State, and now I’ve got this cease and desist letter saying I can’t use it and I’m going to have to change it. And in most cases, yep, you’re going to have to change it because registering a name as a doing business has name has nothing to do with trademarks. So this is the kind of minefield that’s out there.
Alright, so I think the first thing is what is a trademark and what is a trade name or a business name? So let me start right off the bat by saying I’m not a lawyer. I cannot give you a legal advice and you need to assume that everything I say is wrong or at least check what I’m saying before you make any critical decisions. I’m not going to try to give you any information that’s wrong. And we’ve been doing this for a while and we talked a lot of attorneys, so I think almost everything I’m going to say is correct, but I’m trying to give you that high level overview, right? It works for 90% of the cases or 95% of the cases, but this is complicated, right? This is why lawyers make so much money in intellectual property protection, trademarks, trade names, copyrights. It’s very nuanced.
And so before you lock and load on anything, be sure and have an attorney vet your decision, make sure the proper paperwork is filed and don’t say, well, my Carr said this, and so that’s what I’m going to do. We think we’re right, we’re probably right in most cases, but just be aware that there are some nuances. So what’s a trademark? A trademark is a name that you use to sell services under. It’s like your brand. And so you can have a company name has absolutely nothing to do with the trademark, it’s just your company name. But if you’re out there selling a branded product or a branded service with that name, that’s trademark use. And so that’s when you really need to dive in a little bit deeper and take a look at what conflict might
You bet. So let’s say you decide to offer, you don’t want to start a new coffee shop, right? You love coffee, you brew or you roast your own coffee beans and you’re ready to take the step and start your own little coffee shop in your neighborhood. And so you come up with the name Odyssey Coffee, and that’s the name of your coffee shop and that’s your business name. That’s where people come to sit down and buy coffee. That’s not necessarily a trademark, that’s just the name of your coffee shop. Now if you decide to roast beans in the back of that coffee shop and sell those beans to customers and you’re calling it Odyssey Coffee on the package, now you’re using Odyssey as a trademark. Now you’re using it as a brand that people are going to talk to their friends about and say, oh, I got this bag of whole roasted coffee beans and they’ve got Odyssey coffee. It’s the best tasting stuff I’ve I’ve ever tried. So you can use a name just as the coffee shop name and you can sell coffee under different brand names or you can buy other people’s beans and use their brand names instead. Or you can put that coffee shop name on the coffees you sell and that’s when you start moving into the space of it being a trademark. Does that make sense? Do you have any more questions about that, Megan? Because I think listeners want, I’ll make sure listeners understand what I just said.
Yeah, so the reason why I can’t have a Starbucks coffee is not necessarily because of its business name, but it’s because they’re using it to sell their beans.
Yes. That Starbucks is both a trade name and I don’t know for sure if the name of their company is Starbucks. It might be Starbucks Corporation, right? Or Starbucks, LLC. They may not have Starbucks in their business name like Proctor and Gamble. You don’t know that Tide Detergent is a Proctor and Gamble brand. Proctor and Gamble is the company name. Their brand name is Tide. In the case of Starbucks, they may have a different company name. They may have Starbucks corporation, but the brand that they sell under that you’ll see on branded products, whether it’s bags of coffee beans or whatever, is the Starbucks something or other ground coffee or coffee bean.
Okay, gosh, that is complicated. Alright, so you have mentioned trade names, trademarks, and then you also said copyrights. Can you tell me first the difference if there is one between a trade name and a trademark? And then let’s talk about copyrights because there’s a lot of confusion around what that is.
There is. We have folks all the time come to us and say, I need help copywriting my name. Oh my goodness, you do not copyright names. You trademark a name, you copyright creative works. And I know it’s subtle, but it’s just super, super important. So what’s a creative work? A book you can copyright a tune, a music that you write, you can copyright artwork that you create, a sculpture or a painting you can copyright software that you code you can copyright. Those are all creative works. A trademark, a name you don’t copyright, you trademark. So they’re both copyrights and trademarks give you protection under the law, but what you use a trademark for is different than what you use a copyright for. And since this podcast is titled Naming in the AI Age, this is an area that AI can get you into trouble. We were playing around with AI in preparation for this podcast, and so I went into chat GPT plus and I asked them for a definition of a copyright and also trademark.
I think the prompt that I used is the difference between copyright and trademark. So I went into chat GPT, and I just entered in that phrase difference between copyright and trademark. And so came back with all kinds of interesting things, and it sounded generally correct until you got down towards the bottom and it said this, copyright and trademark protection serve different purposes and protect different types of intellectual property. Okay, that’s correct. Copyright, safeguards, creative and artistic works while trademarks protect brand identifiers that distinguish products or services in the marketplace. And that’s correct too. And that’s what we just talked about, right? Creative and artistic works like books and music and art and software, and then trademarks for brand identifiers that distinguish products and services in the marketplace. Then it went on to say something which is misleading and maybe even just flat wrong. And this is why using AI is a great starting point, but always has to be checked.
It went on to say, let’s just say copyright is automatic upon creation. While trademarks require registration for legal protection and copyright is automatic upon creation leads one to believe after reading this chat GPT response, great, I’m protected. All I have to do is write a book and publish it and I don’t have to worry about anything else. No, not true. If you go to the US Copyright Office website and you look at what they recommend, here’s what they say, copyright exists automatically in an original work of authorship once it’s fixed. So once you’re done writing the book and you publish it, you have certain copyright rights just by doing that. But a copyright owner can take steps to enhance protection. The most important step according to the US copyright office is to register the work. Well chat GPT just sort of conveniently forgot to mention that.
It also said that trademarks require registration for legal protection. Wrong. That’s not true. As soon as you start using a name as a trademark, you have certain common law usage rights, certain common law protection just by the fact that you’ve used it without ever having to register it. Now you need to put the little tmm next to it so that you’re notifying people that you’re using that name as a trademark, but you never have to go through the expense of actually registering the name as a trademark to have a certain degree of legal protection. But you want to go ahead and register it, right? Just like copyrights. If you take that extra step and you actually register the trademark, then you have a greater degree of protection. And certainly before you spend all the money building the brand, right, doing the signage or the business card or the website or all this other stuff that you’re going to spend thousands or tens of thousands of dollars on or more, it would behoove you to spend a few hundred dollars to register your name as a trademark if you’re using it as a trademark.
But do you think there’s some benefit to start using, you mentioned common law usage. Is there a benefit? It sounds like there’s risk involved too of going ahead and using that name and then we’re going to register it so that by the time trademark attorneys look at it, they see, oh, they’re using it so therefore they already have some common law usage going on. Or do you go ahead and try to go through the whole trademark process and then start using your name? Is that a delicate balance?
It’s a really good question, and I wish that there was a right answer. I would say best practices for most of our clients is at a minimum, do a search to make sure you’re not infringing upon somebody else’s trademark before you start using it and whether or not you decide to register it, right? So if you say, I don’t want to go through the hassle registering, I’m just going to start using the name, well, you run the risk that there’s somebody else out there may not be in your city, may not even be in your state, but they own federal trademark rights in that name in your space, and you’re going to bump into a problem once you get big enough. It doesn’t happen when you’re small. Nobody wants to mess around with you. Once you get to be a certain size and someone else owns that trademark and they discover you’re out there, their attorney’s going to send you a single page letter.
It’s called a cease and desist letter, and it says, you got to stop using this or we are going to sue you. And now you’ve spent all that time and money and effort trying to build a brand and you’re have to change everything. And we get business from folks like this. So at a minimum, we think you should do the searches Now then it’s a question, do you want to go through the effort and expense of register it or you just want to use it for a while with a common law usage that accrues to you? We would recommend register it, right? If you’ve gone through the effort of searching it and getting a pretty good idea that, yep, I can use it, why not avoid that big no a year or two or five or even 10 years down the road by going ahead and register it now and having that legal protection that’s a level above just that common law usage.
Okay, so you mentioned that I can just go onto the U-S-P-T-O and I can see if I’m infringing upon someone else’s trademark rights and that I can go on and register, but you’ve also mentioned using a trademark attorney. Can you tell, does everybody need a trademark attorney? Is this something I can do on my own? What are the benefits and drawbacks there?
Right. So we don’t really like attorneys. I don’t know many people that aren’t attorneys that really like dealing with attorneys. Attorneys cause us great angst in our business because they’re the ones that typically say, Nope, nope, you can’t do that. No, no, no. I mean, I think that is their default position. You start from a no and you have to convince them often with a lot of effort before they’re going to give you even a qualified yes. However, this is a case where I think an attorney is worth it, right? Yes, you can file yourself, you can file the registration with the patent and trademark office, or you can file the registration for the state registration if you’re only doing business in the state, but you may miss something, you may do it right. There may be a technical flaw in the application. You may not have done the search as completely as an attorney would do.
Just going out to the US PTO website and doing a quick search, which you can do. It’s free, right? You go us people.gov. That’s the website. And there is a tab on there where you can do a quick free trademark search, but it doesn’t find everything. And do you really just want to do it that way? And then assume you’ve done it correctly, file the paperwork, and guess what you’re not going to know for months, maybe even a year or two that you actually get the registration, right? So you’re not going to wait a year or two before you start using the name, right? You’ve done your quick and dirty search on the Patent and trademark office website. You filed the application, you’re out of the chute. You’re going to start using that name. Six months later, the examiner, the PTO sends you a letter saying, oops, we’re not going to grant you this registration.
We found that you are infringing upon someone else’s trademark that you missed in that quick and dirty search. Now you’ve spent six months in all that money. So I just think it’s like an insurance policy. Yeah, it’s going to be a few hundred, maybe even a couple thousand dollars to paying upon how many classes you need to file the mark in and how cluttered the category is. But it’s money well spent at the beginning so you can avoid or mitigate the chances of problems later on. So we’re going to talk next week about other strategies when it comes to how to avoid getting that big no. And then also if you do get the big no right, if you do get a cease and desist letter, or if it looks like you are bumping into problems with an existing trademark, there are ways in many cases around that. And so we’ll talk a little bit about that next week.
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