A recent lawsuit alleging that Denver-based Smashburger’s new Triple Double infringes on In-N-Out’s own famous “Double-Double” and “Triple-Triple” serves to remind startups and entrepreneurs the importance of protecting their intellectual property, or IP, as they build their business.
Every small business has at least one piece of intellectual property: their name, which is known as a trademark. A trademark may be any word, name, slogan, symbol, device, package design, sound, color, smell or combination of these that serves to identify and distinguish goods or services from others in the marketplace. Generally speaking, if someone else attempts to provide goods or services using a mark that is “confusingly similar” to your trademark in a geographic region where you have prior valid trademark rights, you have the legal right to stop them.
On a basic level, having a trademark allows your customers to find you – especially if you are operating in a relatively crowded market with a business that is difficult to distinguish from your competitors. Customers viewing a trademark immediately know who they are dealing with and the reputation of your business, which could be the critical factor in driving a customer’s purchase decision. Thus, establishing a strong brand is important to a business’ success. As the reputation of your business grows, so will the value of your trademark. However, if your company has not taken the steps to ensure that your name and any other trademarks are available for use, you may be forced to stop using a mark, which could be devastating to your business – especially after much time and equity has been put into building a brand. So spending the time and money up front to determine whether a brand is available will help avoid the very high costs of a dispute or litigation, or even the costs associated with having to re-brand and re-condition your consumers.
Once it is determined that a given trademark is available, protecting that trademark is of equal importance, and many small businesses overlook these important steps in creating and securing their brand. In the United States, parties are not required to register their marks to obtain protectable rights. You can establish “common law” rights in a mark based solely on use of the mark in commerce in a given geographic region, without a registration – assuming you were the first to use that mark in connection with such goods/services in that geographic region, and there were no “confusingly similar” third party marks in use before yours. However, owning a federal trademark registration on the Principal Register provides a number of significant advantages over common law rights alone, including: (1) A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration (whereas a state registration only provides rights within the borders of that one state, and common law rights exist only for the specific area where the mark is used); (2) Public notice of your claim of ownership of the mark; (3) The ability to record the U.S. registration with U.S. Customs and Border Protection to prevent importation of infringing foreign goods; and (4) The ability to bring an action concerning the mark in federal court. Thus, if you are using your trademarks in interstate commerce, strengthening your trademark rights through obtaining federal trademark registrations is highly advisable.