The current intellectual property landscape underscores just how precarious it is to register trademarks in connection with your startup.
Perhaps the most famous recent trademark controversy occurred when King.com enraged developers and companies the world over by filing to trademark the very general term “candy” in order to prevent Candy Crush knockoffs.
While the term “trademark troll” has been around for a while, King succeeded in forcing it into trending mode. (Even if it doesn’t have universal rights to the word “candy.”)
Amazon didn’t help the situation this year when it patented taking photos with a white background. Yes, this may be a method photographers have used since the camera was invented, and it’s a basic format for many photos. However, Amazon felt filing for a patent was the best way to protect what it called its “go-to snapshot” for products on the site.
Such maneuvers happen often, in both patent and trademark law, and may seem inexplicable or inappropriate at first. As an entrepreneur your goal should be to understand why companies take these measures and what you can do to avoid letting their decisions affect your business.
And while patent law gets more attention, trademark law can be just as important to a new company.
These tips can help you stay on the right side of trademark law — and public opinion.
1.) Know the USPTO
The main goal of patents and trademarks is to prevent bad actors from creating consumer confusion with knockoffs. When the U.S. Patent and Trademark Office approves a trademark, it’s trying to protect both businesses and consumers.
In the case of Candy Crush, gamers might get peeved if they bought what they thought was Candy Crush for a cheap price and it ended up being a totally different game. Likewise, knock-offs re-direct rightly earned profits from King into a copycat’s pockets.
The USPTO makes decisions for many reasons. Recently the office invalidated the Washington Redskins trademark name because it is derogatory to Native Americans. Now the team may not receive certain protections under federal law.
Startup founders would do well to stay abreast of these decisions as well as understand why they are made.
2.) How far is too far?
How do you know when you’ve gone too far and become a trademark troll? For some startups, it’s appealing to trademark just about anything that’s connected to a success. After all, when success first comes it doesn’t always feel stable — and an entrepreneur may want to take steps to prevent others from making a profit off his or her hard work. How can you tell if you’re taking things to the extreme or simply protecting your assets?
It’s important to learn more about the landscape and how trolls do their “work.” One of the more famous techniques used by trademark trolls is when they register trademarks and then use them for names belonging to a well-known third party, with a clear intention of deploying those marks against the “true” owner.
Here is an example of a troll who trademarked the name “Tesla” in China back in 2006 with the hope of getting the car company to pay him millions. Tesla took him to court and never had to pay him a dime. This outlandish method of trolling is obviously something you want to avoid at all costs.
There are other methods of trolling out there. You are a bad actor if you register a mark, don’t use it, but look to deploy it against businesses who adopt the same name later on. You are also a troll if you register trademarks and then seek to enforce the marks more widely than is legitimate (often against parties in other sectors).
One well-known case of this type occurred in recent years when a small gaming company called “Edge Games” filed suit against Electronic Arts, accusing it of causing confusion by using the word “edge” with some of its games. The suit was thrown out because Edge couldn’t demonstrate there was any actual consumer confusion stemming from EA’s actions.
3.) Search the records
In order to avoid these pitfalls in the future, do your research on what product names or other terms have been trademarked already. One of the best ways to accomplish this is to use the Trademark Electronic Search System (or TESS). This service contains active and inactive records of trademark registrations and applications.
Carefully consider the sector or space your startup is in and make sure you don’t create names that harm anyone’s business. TESS can be searched free of charge.