Has your business picked and established a name, only to receive a cease and desist letter from a business claiming to already operate under or own rights to such a name/mark? Have you planned to use a name for your new business, but discovered that there are already other business(es) using that same name, or something very similar? This type of matter falls under intellectual property infringement, usually of the trademark variety.
We continue to come across more and more businesses that have picked a business name, and potentially a tag line or logo, spent a good amount of funds towards brand development, signage, and advertising materials, and started operations, only to then receive the unfortunate news that another business is already using and/or has formally registered said name or materials. This type of situation is becoming more common in niche industries, such as brewing and outdoor recreation and gear (two of our Firm’s focus realms). Particularly, breweries in and around Asheville, NC and Fort Collins, CO have encountered these challenges a number of times in recent years. Such situations can cause substantial rebranding costs for a company, which could have possibly been avoided by discussing the matter with counsel at an earlier stage.
First, for infringement to occur, the party complaining must use and/or have registered the mark to enforce the alleged claims. Additionally, the alleged infringing mark must be in the same industry (known as “Class” to the United States Trademark Office) or channel of commerce as the established and complaining mark owner. The idea is that infringement occurs when there is a “likelihood of confusion” with consumers. For a likelihood of confusion to occur, there generally needs to be an overlap of the kind of business or industry using the same mark. For example Boosted Electric Skateboards and Boosted Mobile Phones do not compete and would not be “confused” in the marketplace, as they are different products within different industries.
If you or your business has received such a cease and desist letter, all is not lost. There may be options for a business that receives such an infringement notice demand letter. Counsel can assist a commercial client – brewery, gear company, or otherwise – to attempt to get license rights to the name if that is something potentially desired and commercially feasible for the parties. This solution involves the owner of the name or mark allowing use by the alleged infringer based upon a written agreement and probably some sort of consideration being provided. There are other creative problem solving opportunities that include, but are not limited to, collaborative partnerships, co-use agreements, buyouts, and more.
If there is not a solution that allows the alleged infringer to continue using the mark or name, then it is important that the business take proper steps when planning to develop and chose a new name, mark or brand, to avoid running into the same problem again down the road. A counsel’s familiarity with the industry may help and speed up this kind research and progress. Additionally, counsel familiar with such industry and legal requirements or challenges, can provide a more comprehensive service from start to end, and, in that, a long term relationship of trust and faster, more efficient results and work product.
The main goal is for a brewery or other business to work with comprehensive counsel on the front end, before deciding on a name and materials, to be adequately prepared and know that the plans they make for naming and branding can be successful and protected. This will not only save the business from the potential headaches and costs related to changing business names and branding materials, but also the potential legal costs that can come with a conflicted or litigated matter. This is another example of a general counsel service that may cost a Client a little bit in fees up front, but can save them time, stress, and money in much greater amounts in the future.
While the branding and intellectual property side is an important consideration and step for a developing business, it is not the only one in which the inclusion and use of counsel can be important and cost saving. Using comprehensive counsel, with experience in a range of commercial and general counsel matters and materials, can also provide opportunities and protections in leasing and other contractual relationships (drafting and/or review), regulatory guidelines and processes, entity formation and consultation, and liability analysis and risk management. It is generally cheaper to handle an issue before it develops into a problem. However, if a business is not aware of an issue until it becomes a problem, we work with clients to analyze and use creative problem solving for real world solutions to preserve and protect relationships and business success.