By: Lori T. Williams, Owner/Managing Attorney of Your Legal Resource, PLLC
Whether you have developed a patent, a trademark, or a copyright for your company, protecting and marketing that intellectual property (IP) can dramatically increase the value of your company.
Attorney Gail Straith focuses on mergers and acquisitions (M & A) in her law practice, and helps companies protect their trademarks and copyrights. Straith was drawn to IP and M&A law, because they focus on protecting and increasing the value of a business. They also require a lawyer to anticipate issues and offer creative solutions. “I enjoy being part of a team that expands the value of a company,” says Straith.
Straith notes that IP law is constantly evolving, especially as it relates to online advertising. Recent cases have focused on the use of key words and domain names that contain trademarks of a competitor. “If you use another person’s trademark (without other wording that dispels confusion as to sponsorship or endorsement) to lead consumers to your website, your action might constitute infringement. If, however, your choice of wording emphasized a comparison with the other product, then consumers would not be likely to form expectations about the sponsorship of your website.”
What constitutes a trademark? According to 15 U.S.C. § 1127, “a trademark is “any word, name, symbol, or device, or any combination thereof” used to “identify and distinguish … goods [or services] from those manufactured or sold by others and to indicate the source of the goods [or services].”
Many large companies provide guideline which inform third parties of what they can and cannot do when it comes to use of their marks and logos. Click here for Apple’s guidelines for use of its Trademarks and Copyrights. These guidelines apply to companies which create accessories to a well-known brand, such as the iPad®.
Smaller companies that don’t have an in-house product development team often contract out their designs. A legal problem can arise when it comes to ownership of that intellectual property. If a business retains an independent contractor to create a software program, marketing materials, a logo, or any other copyrightable work, it is erroneous to assume that if you paid for it, you own it. When an employee creates a work within the scope of his or her employment, the employer owns the work. When an independent contractor creates a work, however, the independent contractor (as the “author” of the work) is the owner, unless the company and the contractor have entered into a written agreement that states otherwise. It is very important to address this issue when hiring independent contractors to provide any copyrightable work for a business.
Additionally, Straith advises that companies follow these 3 tips before selecting and launching a name for their newly acquired IP:
3 Tips to follow when selecting a name for your product or service:
1) Choose a brand name that can become a strong mark
This means the brand name is more unique than descriptive. There is an inherent tension between marketing wisdom and trademark law. From a marketing perspective, many businesses choose names that indicate exactly what the product or service is. The more unique or fanciful the name, however, the better protection a brand will have against infringement by third parties.
2) Search for other marks before launching yours
Avoid adopting a mark that you will need to change because of a likelihood of confusion among consumers in the relevant market. A trademark lawyer can run a preliminary search for your desired mark. The relatively low cost of the search reduces your risk of launching a brand that will prompt a demand from another company to change your name. That sort of change can be very expensive, especially after devoting marketing dollars to one mark and then having to start over with another mark.
3) Consider registering the Trademark
Federal registration of trademarks with the U.S. Patent and Trademark Office (PTO) offers important benefits. Although registration is not required to obtain trademark rights, federal registration confers these benefits:
(i) a legal presumption of ownership of the mark and the exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration;
(ii) constructive notice to the public of a claim of ownership;
(iii) the ability to bring an infringement action in federal court;
(iv) the use of the U.S. registration as a basis for obtaining foreign registrations; and
(v) the ability to file the registration with the U.S. Customs Service to prevent importation of infringing goods.
Straith further suggests that companies consider filing an intent-to-use application (ITU) with the US Patent and Trademark Office (PTO). The general rule is that the first person to use a mark in commerce gains rights over others who begin use of that mark later. ITU applications provide an exception to that rule. You can file an application with the PTO before actually using the mark. The filing date will serve as a constructive use date. By filing an ITU application, you can establish superior rights over another person who actually begins using the mark first (but after your filing date). Requirements for the ITU application can be found here and here.
Gail Haefner Straith has 26 years of experience as a corporate, M&A, and trademark attorney. Her clients have ranged from entrepreneurial start-ups to Fortune 500 companies. Straith helps companies grow and assists them with their mergers and acquisitions, financing transactions, private placements, equity buy-ins, general contracts, and protection of their trademarks and copyrights. She opened Straith Law in 2009 in Birmingham, Michigan. Straith received the 2012 Lawyer of the Year award from Best Lawyers, for Mergers & Acquisitions Law, Detroit Area. For more information, visit her website.