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Is Your Marketing Firm Looking Out For You?

Picture_1 Sounds Great
I have a great marketing plan for your company. You can choose one of these options:

A) I jump my motorcycle over the fountain at Caesar's Palace with your corporate logo emblazoned across the back of my leathers; OR

B) YOU jump your motorcycle over the fountain at Caesar's Palace with your corporate logo emblazoned across the back of YOUR leathers.

Excitedly, you sign up for A, comfortable in the knowledge that whether I make it or not, it is great PR.

Unfortunately, the next thing you know, you wake up in a hospital bed, with everything but your left pinkie toe snapped like an old wishbone. What happened?

The Problem
I often run into this scenario when a company hires a marketing firm. If the marketing firm does not have a handle on trademarks problems can arise.

More often than not, when a problem does arise, the company thought the marketing firm was handling the trademark clearance and the marketing firm thought the company was handling the clearance. Thankfully, most of the time they both get lucky and neither gets sued over an uncleared trademark. When a company does get sued, it often gets a highlighted portion of the marketing firm contract shoved back in its face showing that all of the liability is with the company.

Not only that, but the company often has agreed to indemnify the marketing firm in the even the marketing firm gets drawn into the fray. Not only does the company have to change the name and destroy all of its marketing materials, but it may end up with writer's cramp from writing checks for infringement, indemnification, punitive damages and attorney fees.

The Solution
The most important step to take to avoid spending the next couple years in court, or emptying your corporate bank account, is to make sure you and your marketing firm are in written agreement as to who is clearing all of the intellectual property (issues of domain names and copyright clearance are also important).

If the marketing firm is taking care of the clearance, be sure that they are doing a national trademark clearance search. Google searches and state trademark searches are simply not going to to cut it. If they have a trademark attorney provide a written opinion of trademark non-infringement to you, you can also avoid liability for punitive damages and attorney fees in the event you are sued.

The value of the trademark does not always justify the cost of a full written opinion. In some circumstances, it is worth a small amount of risk to avoid the additional up-front costs of a full search.

Under these circumstances, however, it is still advisable to conduct a low cost knock-out trademark search to identify any obvious problems. While the knock-out search will not insulate you from liability, it may offer you the opportunity to choose a different trademark before you find yourself shredding thousands of dollars worth of marketing materials and begging a registered trademark owner not to sue you.

Build Your Portfolio
If you plan on using a trademark for a long time, it is probably worth investing in a federal trademark registration. After five years, you can make your federal registration incontestable. Incontestability substantially reduces the chance you may get sued for trademark infringement.

Additionally, if someone else starts using your federally registered trademark on similar goods or services, you have the potential of obtaining triple damages AND attorney fees. Having one or more federally registered trademarks in your portfolio can add appreciably to your bottom line. 

Bottom Line
It does not matter if you do a simple knock out search or end up registering your trademark.  The important thing is to determine whether you or your marketing firm is responsible for trademark clearance. Once you know who is responsible, you can decide how much risk you want to undertake, how likely it is you might run into an infringement situation and how much you are willing to spend to avoid litigation.

Brett Trout


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This is great advice, in part because this is oftentimes overlooked.

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