Naming Your Small Business…Do You Really Need a Trademark?

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Naming your business is often one of the most important decisions a business owner will make when starting a new business. Whether you plan to market your business worldwide or just within your close-knit community, the name of your business is important because it identifies your company. Your name is what makes you different—it is what your customers use to distinguish you from your competitors.

To understand the importance of a trademark, it is helpful to start with a definition.  A trademark is a symbol, word, or combination of words that act to identify a particular company or product. Take for example the trademark of Apple. Standing alone the word “apple” generally suggests a piece of fruit. However, take that same word and use it in the context of computers and technology.  Suddenly, you think of the company that produces and markets MacBooks, I-Phones and I-Pods. The term Apple is a trademark—it marks the consumer’s brain to think of the products and services Apple offers when when they think about computers and technology. To protect this, Apple trademarked their name with the United States Patent and Trademark Office.

So how does this relate to you? Trademarking is not just critical for companies like Apple…it is a critical step for any business to take, regardless of its size or potential market. To better put it into perspective, lets look at what many have called the “David and Goliath” story of trademark infringement, where a small microbrewery based out of Vermont known as Rockart Brewery learned the hard way just how important a federally registered trademark was to its business. In celebration of its 10th Anniversary, Rockart Brewery introduced to its customers its anniversary brew it had coined “THE VERMONSTER.” Although it had successfully sought a state-issued trademark from Vermont in 2006, Rockart Brewery never bothered to seek a federally registered trademark for the name of its new brew.  The problem—Monster Energy drinks.

In recent years, the market for energy drinks has gown exponentially.  One such company that has taken hold of this rapidly growing market is the billion-dollar corporate giant known as Hansen Naturals of California, the maker of Monster Energy drink. Given the success of the Monster Energy drink, Hansen Naturals has undertaken extensive and aggressive steps to protect use of its trademark Monster Energy. So in 2009 Hansen Naturals felt it necessary to serve a cease and desist order on Rockart Brewery claiming trademark infringement for its use of THE VERMONSTER name because it was confusingly similar to Monster Energy drinks. This meant unless Rockart Brewery pulled THE VERMONSTER off the shelves, they would be sued.

What makes this case so interesting is the fact that Rockart Brewery, after seeking the advice of counsel, was told it was likely they would PREVAIL in its defense against Hansen Naturals. The only problem was the legal fees it would take to put on such a defense would bankrupt the company. This left Rockart Brewery with two choices: (1) discontinuing use of THE VERMONSTER name, or (2) go bankrupt. Fortunately, Rockart Brewery rejected both of these options and instead used the local press and other social media avenues to create enough publicity that eventually led to Hansen Naturals backing down. But not all stories end up like this. More often than not when a small business is faced with a similar situation they decide to just stop using the name. We just don’t hear about these examples.

As Rockart Brewery demonstrates, regardless of the size of your business there can be severe repercussions for failing to protect your business’s name, even if use of the name by you is perfectly legal. A federally registered trademark not only helps to prevent others from using the likeness of your business’s name associated with the goods and services you provide, but it also makes it much more difficult to sue for trademark infringement for your use of the name.  In today’s market, the Internet has created a global economy where businesses all over the world will affect the way you do business. This is true even if your business is strictly limited to your local community.  As a result, it is important that you seek the necessary protections to the identity of your business.

So the question for any new business owner is how do you plan on protecting the identity of your business?  That’s simple…by federally registering the name of your business as a trademark with the Unites States Patent and Trademark Office. For more information regarding trademarks or help filing a trademark see our website: Trademark Law Firm.

Published March 20, 2013 by Alex Spurr.

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