Brand Protection for Startups and Younger Companies

Starting a company is difficult.  One thing that makes this so difficult is the owner is faced with so many different initial steps.  Some steps such as forming an entity or getting a tax identification number are often required, and other steps such as acquiring a domain name and creating a website seem essential.  Where does brand protection belong in this list of steps?

I’ve heard many owners of young companies say that brand protection seems like less of a priority.   Many also have the mistaken perception that some of the other steps in starting a company are a proxy for brand protection.  You should not merge these unrelated steps in your mind.  For example, having the Secretary of State approve your company name when creating an entity is not at all related to your risk in using that same company name in the marketplace.  The same can be said for having the IRS approve your name when getting a TIN or having ICANN approve your url.  These steps each accomplish different things.

Essential Steps of Brand Protection

No matter how you decide to approach the initial steps in your young company, you should not ignore the value of brand protection.  This can serve as insurance in the early stages, and as a platform for growth in the later stages.  Ignoring this, or saving it for a later time, could be detrimental to your company’s success.

Brand protection consists of four different components.  Each function plays a distinct role, so different aged companies tend to need some of these components more than others.

For younger companies, the main concerns tend to be determining what branding elements are important, evaluating the level of risk associated with those elements and trying to plan strategies to gain as much right as is reasonable.

Names and Logos

The first component of brand protection is searching.  Of course you should start by identifying what branding elements should be searched.  As a lawyer, I look at the brands a company uses and determine unique characteristics contained in those brands.  For example, I would consider the literal portion (i.e., the readable letters and numbers) used for the company name the names of the products or services sold by the company and any taglines.  I would also consider the way those names are presented, that is, what colors, fonts and other stylizations are being used.  Finally, I consider pure graphic items such as logos or mascots, and the colors and backgrounds used with these.  All of these items are elements of the branding a company may use.  I would suggest that we search the important branding elements, which are those that the company would not want to change if they were challenged.

The search itself can take one of several forms.  At a startup stage, a preliminary search would make most sense for a majority of the branding elements.  Companies may want to perform a full-availability search for those branding elements which are of highest importance.  While business owners could perform some of the searching themselves, intellectual property lawyers have access to specific tools and are better equipped to understand the results returned by the search.

No matter how the search is performed, the goal is to determine what level of risk is associated with the company’s use of the branding element.  This risk should be explained to the business owner in plain language, including a description of the “worst case” scenario and the perceived possibility of that occurring.

Assuming the level of risk is acceptable to the owner of this new business, the next step is to authenticate the business’ rights in the most important branding elements.  Put another way, the business needs to claim the rights in these branding elements.

Ownership Rights

The search likely revealed a reasonable set of rights the business could claim.  That is, once you’ve performed a thorough search, you should know if there are any items you should carve out based on what you found, and whether there are other items that may be included in your claimed rights.  Accordingly, the search reveals not only your likelihood of successfully claiming rights, but what those rights should be.

There are many ways to claim or authenticate your rights.  Most people immediately think of filing a federal trademark application with the United States Patent and Trademark Office.  This is certainly a gold standard, but it is not the only way to authenticate your rights.  In some cases it may be detrimental to your goals.  Finally, filing an application should not be an initial step in your brand protection strategy.

It is important that you get advice on claiming rights in your brands in the most strategic and efficient way.  There are so many ways a business could claim rights in a brand, including multiple forums and differing ways the rights could be described.  It is not uncommon for business owners to venture into this space alone, only to end with an unsuccessful attempt at registration or a registration that serves them little value.

Growth Strategy

The third and fourth components are not typically as important for younger businesses.  These steps, policing and enforcement, are typically reserved for older businesses.  The reason for this is logical: the primary concern in brand protection is that the public is likely to confuse the brand of one company as being associated with another company.  When this happens—the company who used its brand last is forced to stop using that brand.  In many ways this discriminates against younger businesses, that is, since they are younger, they are almost certainly the company that adopted its brand last.  This also highlights how important searching is for new brands.

One common question I get is when a company should begin its brand protection strategy.  Younger and startup companies should begin protecting their brands before they start functioning as brands.  That is, before consumers start to identify their name, logo, tagline, etc. as being uniquely connected to their company.  In many cases, this is within the first year of the company’s existence.

The reason I suggest starting brand protection so early is that you do not want to build your company on an unstable foundation.  It’s not uncommon for a company to grow locally for years under its brand but discover that its brand cannot be used nationally because another company has rights in a highly similar brand in another region of the country.  Similarly, companies frequently discover success under their brand only to receive a cease-and-desist letter (or a lawsuit) after several years from a much larger company.  In both cases, these otherwise successful companies have received the news that they will need to rebrand at a devastating time—just as they are starting to reach a larger audience.   Accordingly, brand protection is crucial at an early stage for successful companies.

Finally, brand protection is usually not as expensive as other areas of law, and can be implemented in stages.  Preliminary searches should be hundreds of dollars each, and most authentication should be thousands of dollars.  Also, the process frequently takes over a year to complete, so starting early could help your company have the assurances it needs to expand in place before it is ready to expand.