Before undertaking corporate branding, such as adopting a new brand or altering the existing one, businesses should ensure the change will not create new liability or jeopardize existing valuable trademark rights. Rebranding can be a costly process involving changes to logos, packaging, marketing materials, and more. It can be disorienting to customers. A business never wants to discover, after that effort, that the new brand is not protectible against others or undermines the business’s own existing registrations. Discovering the change potentially exposes the company to claims of trademark infringement or requires a further rebranding to avoid an infringement claim is worse.
No business wants to incur the substantial cost in adopting a brand which cannot be protected against copying by others. To be protectible, the proposed trademark must be “distinctive.” While businesses may refer to brands and branding, the law recognizes these generally as trademarks, which include the more specific trademark, service mark, trade dress and trade name. In the United States, trademark rights are gained and retained by use of a distinctive term in connection with particular goods or services in a geographic area with seniority being key. A mark is distinctive so long as it is not generic for the product or service or merely descriptive of some characteristic of it. TOILET PAPER would never be protectible for a toilet paper product but might be protectible for a musical band. SOUTH TEXAS PAPER for the same product would not be immediately protectible because of the combination of geographic descriptiveness and product genericness, but might be after such a period of time and after such extensive advertising that the term becomes synonymous with a single source, subject to a disclaimer of rights in the individual terms. ANGEL SOFT would be immediately protectible for toilet paper because the term is suggestive of the product but does not clearly describe it. DELTA would likewise be immediately protectible as it is an arbitrary term. FABBLE, as a coined word, would likewise have distinctiveness and be protectible. Intellectual property counsel welcome the opportunity to assist at this early phase of the brand refresh when the first tranche of potential trademarks has been identified and where some culling can be made.
Having limited the brands to that that are protectible, the next concern must be avoiding a mark which cannot be registered and which may give rise to a claim for trademark infringement. A mark cannot be registered if there is a likelihood of confusion with a registered mark or a senior pending application. This fact intensive assessment primarily turns on the similarity in sound/appearance/connotation and the relatedness of the associated goods and services. The trademark registers can be generally searched for conflicts and deeper dives can be performed where needed. The same likelihood of confusion standard is used when a senior trademark owner, whether registered or not, asserts infringement by business which later adopted use of the mark. Problematically, trademark infringement is strict liability – intent and good faith are irrelevant. The assessment is fact intensive and also may consider the channels of trade, the degree of care exercised by the purchasers, the junior user’s intent, and the extent of incidents of actual confusion. No factor is dispositive, but the last two can weigh heavily in the assessment. In addition to injunctive relief in the event of judicial action, requiring a further rebranding, a successful trademark owner may seek money damages including disgorgement of revenues less proven overhead (which can be more than profit), the actual damages sustained by a trademark owner, and attorney’s fees, among other remedies. A thorough review before deployment can reduce these risks.
Additionally, there is the risk the refresh could jeopardize the existing brand. In the United States, trademark rights are maintained by use of the mark. Substantial changes in a mark may constitute abandonment of that existing brand and prevent the filing of any required maintenance or renewal. While a standard character mark (text without limitation as to presentation) may be supported by any presentation of the mark, a composite (design and text) or design (image) ceases to be used when the changes alter the mark, precluding maintenance and resulting in some loss of rights. This can be profound for a registered mark, where the rights are constructively nationwide as the filing date of the underlying application. Third parties who might have infringed, but no longer do, could become a senior user, creating issues of liability and potentially requiring a further rebrand.
Fortunately, when a business recognizes these issues, it can avoid many of these pitfalls. The business can ensure the senior brand continues to be used and therefore support the associated trademark registration. A trademark search can be conducted to determine potential issues with the proposed new and/or modified brands. Beneficially, where a brand is intended for use in interstate commerce, as soon as brand is sufficiently cleared, the business can file an application with the United States Patent and Trademark Office. Likewise, state level registrations can be pursued as soon as filing requirements are met, which for some states includes actual use.
Taking these actions before changing the brand minimizes the potential risk and challenges which might otherwise arise. Involving trademark counsel in the assessment of the potential changes and new branding can reduce the potential for unfortunate outcomes.