March 29, 2024
Knowledge Trademark

How to Lose a Business in Trademarking

lose a business

How to Lose a Business in Trademarking

Congratulations – you’re a business owner (or about to be)! You can create a business plan, develop a brand, and start marketing. There’s a logo to design. Maybe a website to build. Don’t make these mistakes and lose a business because of negligence. 

Owning your own business is exciting, but the protection of your business sometimes gets lost in the excitement. The protection of your brand. Your logo. The protection of what makes your business important and unique. Those aren’t things you can risk – especially when just starting!

Luckily for you, protecting your business is relatively simple. All you need is to register your business’s name, logo, and/or brand as a trademark with the United States Patent and Trademark Office (USPTO). By doing this, you protect your business from costly and time-wasting issues.  

Multiple risks arise when your business is not trademarked. Here are the top three:

Someone Beat You to It

So, you’ve started a business, created a brand, and developed your logo. You’ve decided that trademarking isn’t worth your time or money, or maybe something you’ll deal with down the road. Out of sight, out of mind, right?

Wrong.

If you don’t decide to trademark, that probably means you haven’t conducted a trademark search. This means you’re now operating a business using a name, logo, and/or branding that could be the same or similar to someone else in the industry. If that business already has this mark, there could be confusion when you begin to present your business to the community. Your customers might not understand that you’re different from that business. Or they might decide you’re a knock-off version and ignore your new business altogether.

What could be even worse? That business might catch wind of your business, and you’re facing legal consequences. If you’re lucky, this happens early in your business’s life. The chances of them winning a lawsuit against you if they own the trademark is excellent, meaning you’ll not only lose quite a bit of money, but you will also need to start the concept of your business from scratch.

Can you imagine if that business that owns the trademark doesn’t find you until years later? Then you have an established, successful business brand that you’ll be forced to tear down and rebuild.

Someone Comes Along After

Another significant risk you face when deciding not to trademark your business is that someone else will come along in your industry with a similar name, logo, and/or brand somewhere down the line. If you choose not to mark and this business files a mark with USPTO, they’ll likely be granted the mark.

If you wish to fight against a business coming along and using whatever it is they want to use that’s similar to your business, there is a chance for you. To win the rights over your competition, you’ll need to file an opposition with the USPTO to eliminate their pending or already registered mark. This option is not only costly and time-consuming, but it’s not even guaranteed to work. After all that hard work and money, there’s still a chance that you’ll lose the case, your competition gaining the rights to the name, logo, and/or brand you’ve been using for your own business. Once again, you’re forced to start from scratch.

The Future is Limited

One of the worst potential outcomes of not trademarking your business is that you impede your business’s future success. This is due to the existence of common law ownership – in which, without a trademark, you can still hold some rights over your name, logo, and/or brand without owning a federal trademark. A significant issue with this option is that federal trademarks almost always trump common law ownership, meaning other businesses can still win against you in legal battles.

However, the central issue that concerns limiting your business’s future is that common law is a geographic limitation. This means that your limited rights are narrowed down to a tiny area in which you can maintain those rights.

The location issue comes into play if you hope to expand your business. Some geographic locations can be as narrow as a handful of miles, making it nearly impossible to open other branches or offices for your business. It might also make it more challenging to sell your business’s products outside your area.

In this day and age, the internet is a massive factor in businesses. Unfortunately, the internet is not limited to a geographic area if you’re relying on common law. This means that under common law, you might lose the right to conduct business online or at least have that business limited geographically.

Real-World Example

This might feel a little obscure or unimportant to you even after reading the risks. You might have weighed the consequences and benefits and decided that you still aren’t interested in the hassle of a trademark, willing to take your chances with your business and its future.

Have you ever heard of Burger King? Yeah, the one with the delicious whopper and pretty cool birthday kid crowns. Did you know that the Burger King you know and love isn’t the original? In 1957, a family in Illinois opened the first ever Burger King restaurant. Little did they know that in Florida, a different family owned a restaurant with the same name. No big deal, right? There’s quite a lot of space between Florida and Illinois, anyway.

Wrong.

In 1961, the Florida Burger King opened their first Illinois location. By the decade’s end, they had over 50 sites open in Illinois alone.

The family of the original Illinois Burger King tried to fight the Florida-based Burger King’s presence in Illinois, but they couldn’t. Why? Because Florida Burger King had registered a federal trademark. They owned the rights.

You might wonder how that worked with common law. We explained earlier that common law offers limited protections, right? Surely there was something the family in Illinois could do. And there was. They were allowed to keep their restaurant in the original town and open another one if they’d like – as long as they stayed within a 20-mile radius from their original location. They were also assured that no Burger Kings (Florida-family) would open in that radius.

That original Burger King is still open today – but they’ll never be more than what they are. They’ll never expand. They’ll never make billions like the other Burger Kings.

Is that really the future you want for your business? We think not, so contact Trademark Factory today and we will help you get the trademark you need!

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