A company's brand is how a consumer views and experiences your business. Everything from the name to the logo shows what your company is about and how you are seen by the world. Many companies don't do their homework when it comes to branding and end up in a costly battle for intellectual property rights. Here are some insights on how companies who have not done their homework can get in trouble deploying a new trademark or service mark when a competitor already uses the same or similar mark.
Developing, maintaining, protecting, and enforcing a distinctive brand identity is a valuable business asset that must be safeguarded. As such, business leaders need to know what can happen when brands/trademarks (either yours or a competitor’s) are the same or similar.
When these situations arise, the courts take a hard look at consumer “confusion.” In other words, they weigh whether the similarity of marks confuses (or has the potential to confuse) consumers as to the source of a particular product or service.
For example, in 2013 a Florida judge granted an injunction involving two rival health clubs. One health club was using the mark “FIT U,” which the judge felt was likely to cause confusion with competitor “YOU FIT.” Thus “FIT U” was prevented from using its mark in connection with the sale of goods or services. (You can read more on this at www.entrepreneur.com.)
Clearly, you don’t want to find yourself in the same situation as FIT U did. A little bit of homework, including working with an intellectual property/trademark attorney early one, likely would have saved a great deal of headaches for all parties, plus saved FIT U the time and resources it spent launching and then reworking/redoing its brand after the court’s decision.
When it comes to consumer confusion and branding, what are the areas to concern yourself with? The seminal court case pertaining to whether there is a likelihood of confusion between two marks is In re E. I. DuPont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (C.C.P.A. 1973). These factors include, but may not be limited to:
- The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impressions. In other words, do the marks appear or sound similar to one another?
- The similarity or dissimilarity of and the nature of the goods or services as described in an application or registration in connection with which a prior mark is in use.
- The similarity or dissimilarity of established, likely-to-continue trade channels.
- The conditions under which buyers to whom sales are made, i.e., “impulse” vs. “careful sophisticated purchasing.”
- The fame of the prior mark (sales, advertising, length of use).
- The number and nature of similar marks in use on similar goods.
- The nature and extent of actual confusion.
- The length of time during and conditions under which there has been concurrent use without evidence of actual confusion.
- The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark).
- The market interface between the applicant and the owner of the prior mark.
- The extent to which the applicant has a right to exclude others from use of its mark on its goods.
- The extent of possible confusion, i.e., whether de minimis or substantial.
- Any other established fact probative to the effect of use.
Launching a new mark or repositioning an existing one is often already an expensive proposition that involves market research, strategy sessions, and planning, as well as creative efforts such as a developing a new logo, website, advertising, collateral materials, etc. Making the mistake of infringing on the service mark of a rival, whether intended or not, can often result in litigation, which not only increases the cost of the brand launch/relaunch but results in financial distress and delays for your company.
Think ahead. Working with an intellectual property/trademark attorney early on in the brand development process can save you and your company a great deal of headaches and wasted time and resources.