Building a brand is exciting.
And perhaps nothing better encapsulates the entire process than going public with a trademark. Whether that be for your company name, a new product, or an old one, the process is the same:
Brainstorm name ideas – clear your trademark for use – embark upon the registration process – wait 6-12 months – hopefully, avoid opposition – and finally, proudly put your mark on everything and the kitchen sink. Of course, comprehensive trademark search involves many intermediary steps:
- Searching for identical marks in use within desired region of registration
- Searching for any common law marks in use (i.e. non-registered)
- Determining if any TMs could likely be confused with your TM idea
Though it may be tempting to cut corners, all of the aforementioned steps are essential. Here's why:
4 Reasons Trademark Search is Critical for New Brands
1. You May Be Forced to Discontinue
Building a brand is synonymous with building a business. Developing relationships with prospects, fine-tuning your offerings, and creating marketplace awareness are all done in conjunction with an associated name and logo. Whether your trademark is registered or not makes no difference.
If you are successful in your efforts, consumers will begin to associate you with that trademark. The problem for many new brands comes when they begin to grow faster than originally anticipated. Suddenly, they are receiving increased recognition, selling in new regions, and retaining more customers. People are beginning to take notice. And that's great... Except for the fact that other brand owners are also noticing.
It's at this point a young brand may receive a cease and desist letter. The questions to be evaluated will be: Does this opponent have a case? Are we protected under common law trademark rights in the areas we are selling? Should we settle, give up, or go to court?
2. You May Face Liability
Should you begin the registration process before receiving a cease and desist letter, you may still risk liability. Once a trademark application enters pre-grant stage, it's visible to competitors. Savvy brands regularly monitor applications for similar filings and will let you (and the courts) know if they think your mark could cause consumer confusion.
The court will ultimately uphold or dismiss the opposition based on priority of use and likelihood of confusion. How much does a trademark case actually cost? Before answering this, it's important to remember that most litigation never goes to trial.
But should you participate in a trademark claim, you can expect to pay $100,000 or more. For most small brands, things will never get to that point. Nonetheless, settling is often costly.
3. You May Have to Rebrand
Saying goodbye to a brand aesthetic you love is disheartening. And it's also expensive.
Depending on the size of your business, rebranding can cost anywhere from a few thousand dollars to hundreds of thousands of dollars. Tungsten Branding estimates their complete naming and branding packages at the following rates:
Startups and Consultants - $7,500 to $15,000
Mid-sized companies - $15,000 to $35,000
Corporate Branding - $35,000 to $75,000
Company Rebranding - $15,000 to $35,000
Product Branding - $7,500 to $15,000
Once you have your new digital branding in place, you'll also need to update any relevant signage and product labels. Additionally, you'll need to write off "sunken costs" for:
- Money spent on graphic designers and agencies
- Initial time spent brainstorming brand ideas
- Money spent on advertising and PR materials
- Product materials and packaging
4. You May Lose Customers
You'll also need to consider how your rebrand will affect your current customer base. If you've worked hard to build recognition, you may find yourself in a bit of a pickle: Will your old customers recognize you? And if they do, will they embrace the new brand?
After all, if you've done things right, your brand will have taken on a life of its own. Colors, fonts, and images all work together to inform the perception consumers have of you. In 2010, popular retailer Gap launched a new logo design. The original logo that had represented the company for 20 years was removed with no warning.
Unfortunately for Gap, consumers immediately turned to social media to voice their strong dislike of the new logo. While the company did manage to spin the change as "the first stage of a crowdsourcing process," the damage had been done. Obviously, this is a "best-case scenario." The worst? Your consumers don't even recognize you anymore.