TRADEMARK LAW

Trademarks give their owners a type of monopoly that protects their use of the mark, and restricts all others from using the same or a similar mark.  This protects a business owner's investment into his or her brand- you can spend time and money to build consumer awareness of your brand and product through clever logos and advertisements, because you know that brand has legal protections from misuse by competitors.

Trademark law ultimately is a protection designed for the benefit of consumers; the law believes that consumers are entitled to be able to rely upon trademarks in order to identify the source or origin of products, so that the consumer can make intelligent and informed buying decisions.

TRADEMARK INFRINGEMENT AND YOUR BOTTOM LINE

Trademark Infringement is a serious business problem that directly impacts business owners' bottom lines.  As a business owner, it is critical to protect the investment you make in establishing your brand's reputation in the marketplace.  One of the most frustrating experiences that a business owner can have is watching a competitor trade off of goodwill that you have paid to develop.  To illustrate, consider the following hypothetical using Nike's well-known "swoosh" logo:

A consumer in a store has heard great things about Nike sneakers.  She sees a pair of sneakers with the swoosh design in her size, and buys them.  As a consumer, she made a purchasing decision based on the reputation that she associated with a well-known trademark.  As it turns out, the shoes are not NIKES, but are made by a competitor company using Nike's swoosh design. 

Let's look at two possible results:

1. Consumer likes the shoes.  Nike has lost a sale due to trademark infringement/ counterfeiting, because if it hadn't been for the confusion created by the infringing logo, customer likely would have found and purchased authentic Nikes.
2. Consumer hates the shoes, but never finds out they aren't real Nikes.  Nike has suffered tarnishment of its reputation due to a product of inferior quality trading off of the goodwill that Nike has built in its brand.  Nike likely loses a lifetime of shoe sales to that individual.

No business owner wants build a brand or develop a product line only to watch a competitor snatch away the sale or hurt the brand's reputation.

HOW TRADEMARK REGISTRATION CAN PROTECT YOU

Registering a federal trademark cannot stop competitors from engaging in such unscrupulous conduct.  What trademark registration does is provide a trademark holder with the right legal tools to stop the conduct, and to recover damages (money) for their losses. 

Trademarks that are not registered have some protection under the "common law," but federal registration provides the following additional benefits:

• Makes your mark easy to find in the federal trademark database, discouraging infringers
• Prevents the registration of confusingly similar marks
• Provides constructive notice of your mark and its validity, so that infringers cannot claim they "didn't know about" your trademark
• Gives you the legal right to place the ® symbol when using your in commerce
• Allows you to sue infringers in federal court
• Allows you the possibility of recovering both statutory damages and attorneys' fees when you sue for infringement and win
• Significantly strengthens your bargaining position and leverage when sending "cease and desist" letters to infringers- often empowering you to stop the infringing conduct without having to file a lawsuit
• Allows you to obtain foreign trademark registrations more easily
• Enables you to request that the U.S. Customs and Border patrol seize counterfeit products

HOW TRADEMARK REGISTRATION CAN AFFECT BUSINESS VALUATION

Registered trademarks are integral to a company's intellectual property portfolio, and can form a key part of a company's valuation when going public or seeking additional investment.  Often, investors and lenders want to see IP protections in place prior to investing in a business.  Protecting your company's IP assets through trademark registration shows diligence, foresight, and pays dividends.