By Doug Kim, McNair Law Firm
From Forbes’ “10 Big Legal Mistakes Made By Startups,” we know that one of the top legal mistakes that startups make is failing to properly consider potential conflicts with existing names, including trademark infringement issues. When naming a company, product or services, it is important to not just avoid legal issues, but also to select a name that is a “strong” name for branding purposes. Failure to have professional searching performed, not understanding what makes a good brand and not understanding the geographic rules concerning trademarks have led to an increase in trademark litigation, including in South Carolina.
When examining trademark litigation cases for the past ten years, we see that trademark litigation is on the rise as shown by the list below. Avoid being included in the 2018 data as a defendant and consult with a professional intellectual property attorney and marketing company prior to launching a business, product or services. In fact, failure to perform a search has come back to haunt companies when they do find themselves in litigation. As said by the courts:
Frehling Enterprises V. Int'l Select Group, 192 F.3d. 1330, 1340 (11th 1999) defendant’s failure to conduct a trademark search prior to commencing use of a mark (that was already the subject of a likelihood of confusion refusal before the PTO) qualified as “intentional blindness” which weighed heavily in the court’s bad faith analysis.
In A.C. Legg Packing Co. v. Olde Plantation Spice Co. 61 F.Supp. 2d 426, 432 (S.D. Ma. 1999), defendant acted in “blind disregard of the peril it faced,” when it refused to follow counsel’s advice of obtaining a trademark search and opinion. That court likewise found that “such willful disregard” was significant evidence bearing on the question of an infringer’s bad faith.
In The Teaching Co. Ltd. Partnership v. Unapix Ent’t, Inc., 87 F.Supp. 2d 567, 590 (E.D. Va. 2000), defendant’s failure to conduct a trademark search despite its knowledge of a potential infringement and its upcoming national product launch qualified as “willful ignorance” that led to its finding of bad faith.
Something Old, Something New, Inc. v. Joan Rivers Rosenburg, 1999 U.S. Dist. LEXIS 18878, at *23-25 (S.D.N.Y. 1999) failure to conduct a search despite contrary advice of trademark counsel contributed to finding of bad faith.
First Jewelry Co. of Canada v. Internet Shopping Network, 53 U.S.P.Q.2d 1839, 1843 (S.D.N.Y. 2000) failure to search before registering a domain name identical to a trademark evidence of bad faith in light of “very obvious and simple precaution.”