Brand Defense: Protecting Trademarks and Copyrights Part II

Aug 25, 2008

Dealing with search engines is the kind of problem you have once your trademarks are established. A more common issue comes from the creation of new brands and the advertising/marketing materials that accompany them. When Ann Garrity, the president of Organic Diva in Minneapolis, started her business in 2006, the "Organic Diva" mark was owned by someone else.

     That business hadn't used the brand in over three years, she said, so she got her lawyer to file for the mark. The company didn't contest it, and now it's hers. Not so the Web address-that's still owned by a California company, OrganicAuthority.com, which is using the site as a referrer. So Garrity is using the plural version-OrganicDivas.com- until she can persuade the other company to relinquish the address she wants.

    On top of that, Garrity scans the Internet on a weekly basis for infringers and sends out cease-and-desist letters to entities using her name, such as a Serbian company that she found making "Organic Diva" handbags. "That's what you have to do to protect the trademark," Garrity says.

    In some ways, the Organic Diva situation represents a classic example of the first thing a company or ad agency must do when creating any new intellectual property. "The overall question is, obviously, how to be sure the ideas you create are original," says Ron Urbach, a partner at law firm Davis & Gilbert in New York, which counsels ad agencies on this type of work. Clients often supply agencies with concepts or images, he says, while agencies provide the slogans. Material coming from both sides needs to be vetted through trademark searches. "The biggest thing is the coordination of those two. Don't presume that someone else is doing those things," he says. "Is the music original? Do we have the rights to it? Is the photography OK?"

    Mistakes can be costly. In 2005, Nestlé was forced to pay little-known actor Russell Christoff more than $15 million after it used his face on the jar of Taster's Choice coffee. Christoff had been to a Nestlé photo shoot years previously but been paid only $250 for the appearance. When he recognized his sipping visage in the supermarket, he dug out his old contract. Sure enough, Nestlé had not paid him for the marketing rights. Nestlé said at the time that one of its employees believed the company had the rights because it had been created in-house.



    Once trademarks and copyrights have been established, a company has a range of options in terms of defending its property. At the most aggressive end of the spectrum might be Built, a New York company that designs trendy totes and bags. CEO Carter Weiss says his company often suffers when rivals steal a design and sell product under their own names. So his lawyers go after infringers, threatening litigation, until they stop. He finds that somewhere along the line- from factory to warehouse to distribution center to store-there's always a weak link who doesn't want to fight. And that brings down the entire chain. Built deals with anywhere between 10 and 30 cases like this a year.

    The other way is to co-opt the infringer. In early 2000, Universal Studios noticed that "Scarface" T-shirts were popular with teens. The problem: Universal had issued no licenses for "Scarface" merchandise. Eventually, the company sat down with one of the major infringers, Changes Inc., and brought them on as a "Scarface" licensee, according to Oliver Herzfeld, chief legal officer at The Beanstalk Group, the New York licensing consultancy involved in the deal.

    Doesn't this reward infringers? No, according to Donald Godshaw, president of luggage-accessory company Travelon in Elk Grove Village, Ill. That's because, when caught, infringers often want the cheapest way out. "The first thing they do when you contact them is they check on your prosecution record. If they see that you go the distance, they will stop, they will listen. They'll say, 'Can't we come to a commercial solution? We'll sell off, pay you a royalty and be done with it,'" he says. "To go to court is really the final resort. You can spend $3 million very easily on patent litigation and still not be done."

    Of course, catching infringers is a business in itself. Most companies generally perform some kind of Internet monitoring. That can range from the simple-sitting down on Friday afternoon and Googling yourself-to the elaborate. Hervey, the lawyer for the Hogan family, has a proprietary online tool that searches and monitors infringers automatically. "It pulls out all the Google ads that include 'Brooke Hogan' as a keyword, and gives me the latest trademark actions and their status."

    A-B's Hellwig has a simpler solution- he says the company gets calls from loyal customers when they see knock-off T-shirts and the like. "It personally offends them, which is a nice thing."

    Lastly, companies need a strategy for protecting their IP, says Kate Shore, a consultant at ipCapital Group in Williston, Vt. They can't just attack it haphazardly. The Scrabulous case is a perfect example. Hasbro waited too long and Scrabulous became popular. When Hasbro moved, some of the media was negative, "with Hasbro coming across as bullies taking away a fun game everyone likes to play," she says. "Hasbro didn't do anything wrong, but it turned into a PR problem for them."

For more on Trademarks and Copyrights:
Brand Defense: Protecting Trademarks and Copyrights Part I
Brand Defense: Protecting Trademarks and Copyrights Part II
Brand Defense: Protecting Trademarks and Copyrights Part III