Internet marketing and trademark trouble

In the not so distant past, marketing and advertising a business was a particularly challenging and daunting task. Local businesses relied heavily on Yellow Pages advertising, radio and television. They had to decide how large a listing, under what categories to be listed, and/or how comprehensive a broadcast campaign they could afford.

The cost could be substantial and no matter how large the listing, the amount of information conveyed was relatively small. Depending on the product and services, the businesses might also have to print brochures to be handed out or mailed to prospective consumers. If a mistake were made, the businesses would have to wait an entire year to make corrections.

Businesses with a national or international scope didn’t fare much better. They had to choose from a dizzying array of options to promote their products and services from magazines, trade shows and listing directories. The mailing of brochures and other comprehensive information to inquirers was a necessity even when the majority would never purchase anything. Small businesses could rarely afford to saturate all possible avenues, so deciding where and how to spend marketing dollars was of crucial importance. Pick the wrong advertising mix and a business might not be able to survive long enough to stumble onto the correct formula.

The Internet changed all this. In a relatively short period, a company’s Website replaced the Yellow Pages listing, the magazine ad, brochures and informational material. SEO specialists tailored Web pages to provide companies with prominent listings on Google and other search engines.

Websites replaced the Yellow Pages and industry specific directories for consumers looking to find providers to meet their needs, wants and desires. Many companies now pay Google and the others to provide links to their websites. More and more prospective customers use Google in place of phone and other industry specific directories. Whether it’s a local search or nationwide, search engines can provide the answer.

There are some drawbacks, however, to this brave new world of marketing. Most obvious is the enhanced competition and the increased amount of time and money spent on optimizing a website. The less obvious disadvantage is the risk of being accused of trademark infringement. Before the Web, it was not uncommon for businesses with similar names and similar products and services to co-exist, each plying its trade in different parts of the country blissfully unaware of the other.

Twenty years ago, a fictitious restaurant named Lights On Broadway could have co-existed in numerous locales across the country, but since local customers expect that they can look up information about a restaurant online, a website is a necessity. Sooner or later owners with businesses with the same name stumble upon each other over the Internet. Often one sends a letter to the other accusing the other of trademark infringement.

The scope of this column does not permit a discussion of all the legal complexities that ensue. Suffice it to say, the costs of resolving the matter can be substantial not only in legal bills but also in the loss of goodwill and name recognition if one of the businesses has to rebrand.

Recognizing the potential risks, there are a few things businesses can do. Initially, in choosing a business, product or service name, a business would be advised to conduct a national trademark search to identify whether there are other businesses using a similar name that could prove to be problematic down the line. Choosing names and trademarks that are more arbitrary and fanciful opposed to those that are descriptive or suggestive makes good sense: think Xerox (a made-up word) to Duplicators for copiers, for instance. Avoid names that are plays on common clichés: they may be clever, but the probability is often high someone else will be similarly clever.

If the business is already a going concern and especially if its trademark is one that might be shared by other businesses around the country, plan for an eventual dispute. Sadly, prevailing in a trademark dispute often comes down to who has the most money to defend or advance its position and not who is the senior user of a particular name.  Being in the right is cold comfort if your business does not have the capital to defend your rights.

At Leyendecker & Lemire, we regularly counsel clients to create a legal rainy day fund. We know very few ever do, but if and when a trademark dispute arises, it is much easier and even axiomatically often less expensive to resolve a case to a client’s satisfaction if the business can afford to assert its position. Some of the money saved canceling or downsizing the large Yellow Pages ad might be best socked away for future legal expenses.

While marketing and advertising in the 21st Century may seem simpler than it was in the last century, in reality, old challenges have been replaced by new ones. The key to success is often anticipating and adapting to these new challenges just a little bit better than the competition, and one of the biggest of these new challenges is that something as simple as choosing a business or brand name has become much more complex in consequence. 

Categories: Company Perspectives, Sales & Marketing