The World Intellectual Property Organization (WIPO) reports that the number of trademark applications filed around the world each year has risen consistently since 2014. While China continues to file more new applications than any other region, U.S. filings have also increased significantly in recent years.
This explosive growth in filings underscores the challenge faced by brand owners who are seeking to register unique new marks that will not pose a risk of confusion with other existing marks. Moreover, copious new filings also mean that brands must be hyper-vigilant in monitoring and enforcing their existing portfolio of marks in order to defend against possible infringement by new entrants.
In her recent article for World Trademark Review, Intellectual Property Partner Dyan Finguerra-DuCharme examines the different stages of the trademark lifecycle and shares her recommendations for what brands can do to protect their valuable marks.
“Brand owners often ask how they can discover potential infringements at an early stage,” Finguerra-DuCharme said. “By the time a product hits the marketplace, the cost of enforcement rises exponentially.”
Finguerra-DuCharme offers the same advice to every client regarding early detection: “It is worth spending the money upfront to clear a mark before use; and once registration is obtained, the mark should be placed on watch to discover marks that are too close for comfort before those goods are introduced into the marketplace.”
Registering New Trademarks: The Importance of Clearance Searches
Before the launch of a new brand, product or campaign, a company will typically consider several variations of a mark. Once a list of options is compiled, Finguerra-DuCharme recommends a preliminary search be conducted in order to isolate a handful of strong possible marks that are safe to use – i.e. not confusingly similar to any existing registered marks – and available for registration.
After a mark has been preliminarily vetted, a comprehensive trademark search should be initiated. Full search reports can be costly, but are highly recommended as brand owners will not want to invest in a mark only to learn later that it is confusingly similar to another, or that other issues exist that will preclude registration.
“The consequences of not fully vetting a mark before adoption can expose the client to liability, including a preliminary injunction that forces the client to immediately cease all sales. The client – which is now the accused infringer – may also be ordered to pay monetary damages, including its profits and the cost of corrective advertising,” Finguerra-DuCharme cautioned.
“Moreover, perhaps the most disruptive consequence is that the client will need to rebrand its goods, which may have a negative impact on consumer perception,” she explained.
Why Brands Should Monitor Their Marks
Monitoring existing marks is as vital in the trademarking process as searches and clearance. Because of the flood of new registrations every year, and the expansion of online marketplaces and social media, opportunities for infringement have increased. As a result, brands are urged to put their marks “on watch.”
How Brands Can Detect Early Infringement
Oftentimes, the first sign of infringement is the appearance of a brand’s mark in the advertising campaign of a junior user. At this stage, it may already be too late for the brand owner to limit the damage and avoid spending significant amounts of money on litigation – appearing before the Trademark Trial and Appeal Board (TTAB) may cost between $75,000 and $125,000, depending on the complexity of the case, whereas arguing a case in federal court could cost upwards of $1 million.
However, if a proper trademark watch has been implemented, brand owners, attorneys and other trademark professionals are notified when applications are lodged for similar trademarks.
“[Trademark watches] enable brand owners to act quickly (and cost effectively) by sending a demand letter; if the application is not expressly abandoned, they can move forward with a notice of opposition or negotiate a coexistence agreement. Speed is critical here, as often the window in which to lodge opposition is limited – and again, once a mark is registered, it becomes increasingly more expensive to take action,” Finguerra-DuCharme wrote.
The Value of Expertise
Beyond the advantages of customized software and other vendor tools, engaging a qualified trademark attorney or paralegal to assist with a trademark matter adds value at every stage of the trademark process.
“Spending money on the front end in clearing a mark is much better than dealing with a demand letter down the road when you have invested in that brand name. On the flipside, watching your important brands is an effective way to keep the register clean and prevent infringements.”