California Apparel News

Developing a product is just the first step to a successful business. Once you have a product that you believe will sell, you need to come up with a name for that product to set you apart from everyone else and to help people identify your product as the genuine item.

Creating a brand for your product is a serious matter. It should be (1) unique, (2) not descriptive (as such trademarks cannot be protected; see example below) and (3) a name that consumers will remember.

After obtaining a trademark registration, what you do with that trademark later on, including the manner in which you protect it on the Internet, is just as important as the creation and registration of the brand.

In the Internet age, most companies engage in e-commerce either directly or indirectly through their own website or the website of a third party such as Amazon.com or eBay. Even if your product is not directly sold from your website, your website will likely provide information about the product so consumers can research it before making a purchase.

If a business does not stay vigilant regarding the manner in which its trademark is used on the Internet, it may lose substantial rights in the mark and may lose most, if not all, of the value in the same.

Once you choose your brand, you will register a “.com” domain name incorporating your trademark to sell your product, provide information about your product or both. But there is much more out there than just the “.com” domain name. There are “.net,” “.org,” “.biz” and a whole host of other domain extensions, including different country codes. Without a regular check of the Internet, your trademark can be registered as a domain name and used by third-party infringers for years and years without you even knowing. In some instances, competing businesses are built on these domain infringements, and stopping such infringements can become extremely difficult if you are not diligent.

In personally dealing with trademark-infringement issues on behalf of clients, it never ceases to amaze me what infringers think they can get away with. There are individuals who believe it is acceptable to use another party’s trademark with the addition of generic wording to sell their own products, competing products or counterfeit products. A common scenario involves the registration of a company’s trademark along with a generic word that describes the product. For example, the Apple trademark is owned by Apple. An infringer would likely try to register such a domain as Applepowercords.com in order to sell infringing, counterfeit or competing goods. Such use is illegal and actionable.

Many infringers spend years building up their businesses in such a way, and they are often successful in fooling consumers into believing that they are either the actual company or somehow authorized, affiliated or endorsed by the trademark owner. And, many times, these infringers are able to do this successfully because the actual trademark owners are not monitoring the manner in which their trademarks are being used on the Internet and have not taken any action to stop such infringement. If no action is taken for several years, it is very possible that the trademark owner would not only lose the right to enforce its trademark rights against third parties but also lose all monetary value associated with the trademark and, therefore, the business.

As a trademark owner, there are some very simple steps you can take to avoid these issues and prevent such infringement.

A regular search of your trademark in all search engines provides a good landscape as to how others may be using your mark. Not only will this result in hits for websites that may be using your trademark within the content of the website but will also alert you to whether someone is using your trademark on Pinterest, Facebook, Twitter, Tumblr and others. Many of the social-media websites will allow you to register your name with them to prevent the unauthorized registration by individuals who are looking to profit off your trademark’s goodwill. Information about such preventative registration can be obtained from the individual websites.

An Internet search can also alert you to the use of your trademark in a domain name registered by a third party. While there is no single mechanism available (such as those for individual websites) to file a simple complaint against such registration, there are other actions that can be taken. As an example, you or your attorney can send a cease-and-desist to the registrant of the domain name in an effort to amicably resolve the matter by detailing that you are the trademark owner and explaining that the third-party infringer should either delete the domain name or transfer it to you.

If the cease-and-desist does not do the trick, you can file a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP). The UDRP allows trademark owners to file a complaint detailing its trademark rights. This is often an effective way to prevent an infringer from using a particular domain name, but it does not prevent an infringer from registering additional infringing domain names.

Where there is a serious issue with an infringer who registers one or multiple domain names or refuses to stop registering domain names, a trademark owner can file a complaint in federal court under the Anti-Cybersquatting Consumer Protection Act (ACPA). The ACPA not only allows a court to order the transfer of a domain name to the trademark owner, but it also can punish the cybersquatter. A finding of cybersquatting can result in statutory damages between $1,000 and $100,000 per infringing domain name registered. In some instances, the court can also find that the case was “exceptional,” thus awarding the prevailing party’s attorneys’ fees.

So, what’s the lesson here?

Be proactive. Get into the habit of checking the Internet to see who may be using your trademark. If you receive emails from domain registrars in other countries telling you that someone is trying to register a slew of domain names that incorporate your trademark, it’s likely a scam. However, it may be worthwhile to protect your trademark in foreign countries by registering obvious domain names with the country-code extensions. Shop around for a domain registrar to get the best deal.

Also, do an Internet search for your own name. While many infringers want to profit off the goodwill of your trademark, there are also plenty who may want to disparage you, especially if you have a successful business and they have no other legitimate means to compete with you.

Most importantly, if you discover an infringement, do something about it. You need to be proactive to protect your brand before it’s too late.

Farah Bhatti is a shareholder and chair of Buchalter Nemer’s Intellectual Property Practice Group. She can be reached at (949) 224-6291 or fbhatti@buchalter.com.