Pay now — or pay more later

Generally speaking, the old adage “you get what you pay for” holds true. While we may find the super deal or bargain now and then, most often you are better off paying a bit more and getting a quality product.

The same holds true for legal services and, in particular, trademark search services. In the past few years, websites offering discount trademark filing services, including cut-rate trademark searching services, have populated the internet. While utilizing the services may be an attractive option to cut costs, business owners should be very careful when using these services because they could jeopardize their trademark rights in their brand, which could lead to future liability or litigation. 

With the cost of your average trademark litigation running well into the six figures, the choice to go with a cut-rate clearance search — or forgo one altogether — can literally cost a business hundreds of thousands of dollars down the line.

While not the most glamorous aspect of the trademarking process, trademark clearance searches are quite possibly the most important step. This is due to the nature of trademarks themselves. In general, the individual or company that used a mark to identify its goods or services first is the rightful owner of the mark. The trademark holder doesn’t have to file any sort of registration for their rights to be valid — it just has to be used in commerce to identify their goods or services. 

Unregistered marks are referred to as Common Law marks. The goal of a trademark clearance search is to provide the potential applicant with data to make an informed decision about their branding strategy. The search should determine whether or not there is anyone else out there with a better right to the mark than the individual or company seeking to potentially adopt and register the mark. If there is a user that has a better right to the mark and you use the mark anyway, this could cause legal issues down the road, resulting in you having to change your brand sometime in the future (losing all of the goodwill and name recognition you have built). That’s in the best case scenario; in the worst case, you could be sued by the trademark owner.

The problem with cut-rate clearance searches is that they generally only search the records at the United States Patent and Trademark Office (USPTO). These searches do not look for any common law marks. If an applicant only does a USPTO search, they are essentially only examining a small slice of the universe of potential mark holders. It would be similar to driving in the center lane of an eight-lane highway with a helmet on that only allowed you to see your lane. You would be completely oblivious that there are cars next to you that could cause an accident. A comprehensive clearance search on the other hand, would allow you to see all eight lanes of traffic, and make adjustments as necessary to avoid an accident.  

A quality, comprehensive search will examine not only the records at the USPTO, but also all fifty state trademark and corporate records, industry and trade publications, phone directories and a comprehensive internet search.

Truth be told, the vast majority of the time that I counsel clients to change or revamp their trademarks, it is generally not due to a registered trademark, but due to a strong common law mark that was picked up by our clearance search. Often times these common law marks are not on our client’s radar and almost certainly would have resulted in an expensive confrontation down the road. By having the commercial intelligence to make an informed decision, our clients are able to adjust course and adopt a mark that not only is protectable, but one that won’t cost them a small fortune down the line. 

As with most things in life, you get what you pay for. However, with cut-rate trademark clearance searches it’s what you don’t get that might come back to haunt you.

Categories: Finance