Trademark clearances are important when choosing company, brand, or product names to avoid potential litigation and to stand out in the marketplace.
Whenever a company or entrepreneur chooses a name for a new product, brand or even company name, it is extremely important to search the marketplace to make sure the trademark is clear to use. In other words, a trademark clearance search determines if a name can be used in the marketplace without infringing on a third party’s trademark rights.
There are two main reasons to run a trademark clearance search. The first reason is to make sure no third party competitor uses the same or a similar trademark. If a company uses the same trademark as a product that you want to turn into a new company name or brand, you run the risk of being sued for trademark infringement. In addition, by selecting a similar trademark or name as already exists in the marketplace, it will not stand out to consumers and will not be as distinctive in the marketplace.
Avoid Trademark Infringement Litigation
The most important reason to conduct trademark searches and make sure the trademark is clear for use is to avoid costly trademark litigation. If a company chooses a name for a new product or brand that is already in use, they open themselves up to a trademark infringement lawsuit. Even if the company successfully defends themselves in trademark litigation, they will often have to spend thousands of dollars to pay for attorneys to defend the case. The worst case scenario would be defending the case until a judgment is made, spending thousands to defend it, and still losing.
The most common way a trademark issue begin is by the party claiming there is a trademark infringement sending a cease and desist letter. If the case for trademark infringement is strong, the company that received the cease and desist letter would be advised to pull any products using the trademark at a minimum. Sometimes the company that sent the trademark letter may still sue for any profits made while the infringing company used the trademark.
Sample of Trademark Cease and Desist Letter
Standout in the Marketplace
Another reason to run a trademark clearance search, in addition to avoiding trademark litigation, is to make sure the product or company name will be distinctive in the marketplace. When a company chooses a name that is relatively common in a field, it may not be at risk for trademark infringement due to multiple companies using a similar name, however it will not stand out in the marketplace.
Trademark owners should want to choose distinctive names so consumers remember and can differentiate their products from competitors. If three or four competitors use a similar name for a product, it will be hard for any one of those companies to claim trademark infringement based on a company entering the market with a similar name. However, the new entrant to the marketplace will not allow consumers to identify their product as being different or better.
To avoid the headache of litigation, it is best to clear the trademark before using it. The best way to clear a trademark is to hire and trademark attorney or professional to search the USPTO trademark database and conduct a common law trademark search.
If you need help clearing a trademark, feel free to contact Granite Trademark Services for a free trademark consultation today.