Branding 101: Major Pitfalls to Avoid in Launching a New Business or Product Name
You are ecstatic about your new business name or product line named XYZ and have spent a substantial amount of money on website design, business cards, letterhead, signage, advertising, brochures and other promotional materials to launch this new brand.
Sales are starting to increase and you are gaining some great momentum in the right direction! Several months later, you receive a letter from an attorney representing XYZ corporation who advises you that you are infringing on XYZ’s trademarks and other legal rights and that you must immediately cease and desist from all further use of the XYZ brand. You reluctantly must start over with another brand name, and all of your sunk costs and brand recognition associated with your XYZ brand are wasted.
How can you avoid such a catastrophe? For starters, you should be aware of basic trademark law issues when you launch any new brand. A trademark is typically a word, phrase or logo that identifies a company’s products or services. In the United States, companies can have trademark rights regardless of whether they filed for federal trademark registrations with the United States Patent and Trademark Office, as long as they’re actually using the trademark in connection with the sale of their goods or services. If another company has been using the same or a similar brand name in connection with similar goods or services before you started using the brand, you might eventually encounter the scenario described above.
As you select a brand, whether it is the name of your business or particular product or service, you should also keep in mind that not all brands are protectable under trademark law, which may mean that you may have an up hill battle trying to stop someone else from using an identical or similar brand name. The ideal brand is one that is distinctive, arbitrary or “fanciful” with no meaning in any language, such as KODAK. On the other end of the spectrum, a brand name that is descriptive of the underlying product or services, or generic such as BEER, may not be entitled to any trademark protection. To the extent you can brainstorm for a brand name that has no meaning in any language, this strategy likely would be the best approach from a trademark protection perspective.
After you have selected a possible brand name, you should start your due diligence by checking to see if the domain name is available for your proposed brand. Next, you should conduct an Internet search of the brand name to see if there are any online users of identical or similar brand names. You should also search the United States Patent and Trademark Office online database to determine whether there are any registered trademarks or pending trademark applications that may be an issue. Another option is to order a comprehensive trademark search report from one of the various online trademark search services. If you intend to conduct business internationally under your new brand, you should conduct similar due diligence investigation in the countries where you plan to market and sell your goods and services. Investing at the outset in some basic preliminary research regarding a proposed brand can save you a tremendous amount of heartache down the road!