• Trademarks (words, logos, symbols, colors, sounds) associated with the company, product, or service;
• Packaging for a product;
• Creative works (e.g. user manuals, website design, marketing materials, etc.) associated with the company, product, or service;
• Uniforms worn by employees;
• The look and feel of your place of business; and/or
• The design of the product itself.

Branding is critical because it encourages customer loyalty, indicates a high level of quality, and is a source of goodwill and increased value for your business. 

Risks of Not Branding Your Business

Without effective branding, your business and your goods or services are just a generic offering that provides no recognition and does not encourage customer loyalty or repeat business. This often results in one-time transactions, a diminished likelihood of repeat sales, and a reduction in the overall value of your business.

Benefits of Branding Your Business

With the proper branding, consumers come to associate you and your merchandise or services with a particular level of quality. Such “brand association” fosters customer loyalty, encouraging repeat business and boosting referrals. Establishing a brand is an effective way for building a business reputation, enhancing customer awareness and loyalty, increasing the value of your business, establishing credibility and trust with customers, and increasing the effectiveness of marketing efforts.

Establishing a Business Brand

Before you decide on your business brand, you must be certain that it is available for your use. It is vital to reach out to an intellectual property (IP) attorney to research the availability of the brand, as this research can be very nuanced and intricate. If clearance is given from experienced IP counsel, you can feel more confident in dedicating the time, effort, and resources to establish your brand. Establishing your brand may involve securing one or more rights, including:

• Registering a company name with the with the secretary of state;
• Obtaining a trademark registration in your state as well as with the United States Patent and Trademark Office;
• Securing copyright protection for your creative materials;
• Entering business contracts with suppliers, licensees, or distributors to control the branding of the products or services,
• Registering an internet domain name, and
• Attaining a design patent on a product design.

The more of these rights you establish, the better equipped you will be to protect your brand from infringement by others. It is important to engage an experienced intellectual property lawyer who can assist in determining which of these brand-building protections apply to your brand, and can assist in securing the broadest protections possible.

Brand Protection

Once you have established and secured rights in your brand, you now must protect it so that competitors cannot improperly use it and benefit from your goodwill.

The first step in protecting a brand is using it. If you do not use or control the use of your brand, especially for a trademark, you may lose the right to exclude others from using it.

The next step is to monitor the use of your brand (or similar brands) by others. This may include monitoring competitors’ business activities, monitoring trademark applications filed with the USPTO for similar trademarks, keeping abreast of the relevant industry and trends, etc. A trademark watch can be established for this purpose.

The third step is to enforce your rights against infringers. If you do not stop brand infringement, your rights in the brand may be lost with respect to this and other infringing parties. If you find yourself a victim of brand infringement, it is advisable to hire a lawyer to contact the infringing party. Through the counsel of an attorney, a demand to cease the infringement should be made, settlements for any damages caused by the infringement should be negotiated, and if necessary, a lawsuit should be filed.

In summary, establishing and implementing strong branding creates an impactful connection between you and the consumer. This connection not only enables you as a business owner to charge a premium for your goods or services, but it directly contributes to increased profits and the overall value of your business.

If you want to establish a brand, have questions about branding, or if you want to seek counsel from our Intellectual Property practice group, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Protecting Your Brand From Competition appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Obtaining rights in your IP is crucial for business success and may increase the value of your company for a possible future sale or licensing of business interests.  A single business venture or idea may involve one or more types of IP, and therefore without consultation with an experienced IP attorney, it may be difficult to determine which type of IP you have and what type of IP protection to pursue. Successfully navigating the world of IP requires deep understanding and knowledge and should be done with the help of a qualified IP attorney.

The following is a primer on the four types of intellectual property and provides a general idea of how each type of IP may be relevant to your business. 

Trademarks

A trademark is a word, symbol, design, or even a sound, that is used to identify a source of goods or services.  A trademark allows consumers to know where the goods or services come from.  Examples of well-known trademarks include the words NIKE, PEPSI, MCDONALD’S, but also Nike’s swoosh, Pepsi’s red, blue and white globe, and McDonald’s golden arches, all of which indicate the source of the goods or services.

You should consider filing an application for a federal trademark registration to protect the branding of your goods and services.  Such a registration offers significant protection for your mark by providing nationwide coverage against infringing use of the mark or confusingly similar marks for similar goods or services.  A federal registration also allows for higher damages to be awarded and can last as long as the mark is used in commerce.

Patents

A patent is the exclusive right to make, use, sell, import, or offer to sell an invention.  There are three types of patents that can be attained.  A utility patent may be granted for a machine, article of manufacture, composition of matter, or a process, and covers how a thing is constructed, how it works, and/or what it does. However, a utility patent does not cover scientific theories, mathematical formulas, discoveries, or other abstract ideas.  A design patent covers how a thing looks, i.e. its aesthetics.  A plant patent can cover a new variety of plant. 

A patent can be granted if the invention is new and also not obvious over what is already known.  A utility patent provides nationwide protection and lasts for 20 years from the filing date of the application, after which the invention can be used by anyone. 

Copyrights

A copyright is the right to prevent others from copying your original work of authorship, such as a photograph, book, article, movie, a recorded song, computer code, etc.  A federal copyright registration allows you to control the distribution, reproduction, display, or performance of your work, and to control the production of derivative works based on your original work.

A federal copyright registration, like a trademark registration, offers nationwide coverage against infringing use of the work, and provides a powerful tool against infringers.  A copyright lasts for the life of the owner plus 70 years.

Trade Secrets

A trade secret is information known only to people within a company and is used by the company as part of the business.  A trade secret is not disclosed to anyone outside the company, and thus is not included in any application for a trademark, copyright, or patent. 

A trade secret may involve a recipe for a product such as the recipe for Coca-Cola, a computer code for a program that is offered as software as a service (SaaS), research and development information, business methods, or plans for expanding a business.  This information can be protected from disclosure through the use of contracts, passwords, restricted access, etc., and thus can last indefinitely.

For more information or to seek counsel from our Intellectual Property practice, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Intellectual Property Considerations for Business Owners appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Recently, Coca-Cola found itself in a situation where its failure to seek registration in the United States ultimately made proving economic and reputational harm caused by a competitor’s superior registration a challenge, and one that they could not meet.

Background

Coca-Cola acquired Parle (Exports), Limited of Bombay, India (Parle) in 1993. Parle had introduced Thums Up, a cola beverage, in India in 1977 and Limca, a lemon-lime soft drink, in India in 1971 and had obtained Indian registrations of the marks THUMS UP and LIMCA. After acquiring Parle and its Indian registrations, Coca-Cola continued to sell the soft drinks under these marks throughout India and in countries such as Bangladesh, Oman, Singapore, the UAE, Angola, Nigeria, Sri Lanka and Bhutan.

While these products were quite popular in these Asian and African markets, Coca-Cola never widely distributed them in the United States. The cola could be found in “World of Coca-Cola” and “Coca-Cola Store” locations in Atlanta and Orlando, but this use was ultimately considered de minimis. The drinks were distributed in the United States by third-party retailers in restaurants, grocery stores and other retail outlets that service the Indian community in the United States. Additionally, Coca-Cola offered no evidence to show it attempted to obtain registrations for THUMS UP or LIMCA in the United States.

Meenaxi began selling cola and lemon-lime soda in the United States under the marks THUMS UP and LIMCA in 2008. In 2012, it sought and obtained registrations at the United States Patent and Trademark Office (USPTO) for both marks.

Trademark Trial and Appeal Board

In 2016, Coca-Cola challenged Meenaxi’s registrations through the Trademark Trial and Appeal Board (TTAB), bringing a cancellation claim under § 14(3) of the Lanham Act for misrepresentation of source. The Lanham Act provides that any person who “believes that he is or will be damaged” by the registration of a mark may file a petition to cancel the registration of that mark if “the registered mark is being used by, or with the permission of, the registrant so as to misrepresent the source of the goods or services on or in connection with which the mark is used.” 5 U.S.C. §1064(3).

In its 2019 decision, the TTAB sided with Coca-Cola and found that Meenaxi’s copycat business model of reproducing popular Indian brands and selling them to Indian-American consumers was intended to cause consumers “to draw the logical conclusion that Respondent’s products in the United States are licensed or produced by the source of the same types of cola and lemon-lime soda sold under these marks for decades in India.” The TTAB also found it notable that these were not isolated instances by Meenaxi, but rather “part of a broader pattern of copying the word marks and logos of others, particularly brands from India.” In fact, other Meenaxi marks, including NUTRELA, RASNA and REAL NAMKEEN, have been challenged in the United States, resulting in the cancellation or abandonment of the other Meenaxi registrations or applications. Coca-Cola seemed to have won the day.

Court of Appeals for the Federal Circuit

Meenaxi appealed to the Court of Appeals for the Federal Circuit (CAFC) and the court reversed the TTAB decision holding that Coca-Cola had not established a cause of action under the Lanham Act. It may seem strange that a basis for appeal would exist given Meenaxi’s copycat business strategy. However, despite the seemingly deceptive business practice by Meenaxi, Coca-Cola needed to show harm in the United States. Meenaxi’s appeal challenged that Coca-Cola had met that threshold.

In 2014, the Supreme Court decision in Lexmark International, Inc. v. Static Control Components, Inc. stated that “entitlement to a statutory cause of action under the Lanham Act requires demonstrating (1) an interest falling within the zone of interests protected by the Lanham Act and (2) an injury proximately caused by a violation of the Act.” This requires a claimant, here Coca-Cola, to show an injury to its commercial interest, like lost sales and damage to its business reputation, in the United States. The TTAB accepted Coca-Cola’s assertions that Meenaxi’s actions resulted in these types of injuries, but the CAFC called their conclusions “stereotyped speculation.”

Meenaxi’s appeal asserted that Coca-Cola failed to show evidence of lost sales and failed to demonstrate any reputational injury in the United States. Coca-Cola provided testimony that their THUMS UP and LIMCA products were sold in Indian grocery stores to show lost sales, but the court rejected this argument because third-party sales do not establish sales lost by Coca-Cola. Further, Coca-Cola did not present any survey results or other evidence to show that brand recognition for either product existed in the United States. Awareness abroad, regardless of how widespread, is not relevant in the United States because trademark rights are territorial.

Coca-Cola’s failure to establish an injury in the United States meant it was not able to sustain a cause of action under the Lanham Act. The court found the evidence did not support the TTAB’s holding and reversed, restoring Meenaxi’s registrations for both marks.

Conclusion

This case showcases the importance of trademark registration. Coca-Cola had at least 15 years to make use of and secure its rights in these marks in the United States before Meenaxi began using the marks, but it failed to do so. Coca-Cola’s failure to use and seek registration for these marks in the United States allowed a competitor to obtain priority in the marks. Despite Meenaxi’s arguably unscrupulous business practice of intentionally adopting well-known marks of Indian goods, there must be a showing of economic and reputational harm in the United States in order to obtain recompense under federal trademark law.

It is critical for brand owners to seek protection of their brands in the United States if they intend to enter this market. This case underlines the importance of seeking federal registration, as well as beginning and documenting use in the United States as early as possible. The importance of trademark registration cannot be understated. Registration should be part of the beginning stages of brand protection so that businesses can benefit from the full protection provided under trademark law. Businesses that miss this crucial step could find themselves without rights in the very situations that the trademark law was intended to prevent.

For more information or to seek counsel from our Intellectual Property group, reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Coca-Cola’s Trademark Rights Fall Flat as Meenaxi Wins on Appeal appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.