The following is an edited transcript of my video, What Are the Potential Costs of an Unprotected Trademark.
I recently spoke with a small business owner who bought a restaurant, rebranded it, opened it to the public, and received critical acclaim. Of course, as part of this process, they ordered new menus, hung a new sign, and poured quite a bit of money, time, and energy into this new venture. Then they received a cease-and-desist letter: another company had already registered the identical brand name for the identical services. So they not only had an unprotected trademark, they had skipped some critical steps in the brand protection process.
There are several risks and costs for a business that skips over brand protection steps and does not have a properly protected trademark.
First, there’s a legal cost to not being properly protected: you can’t as easily stop someone else. Without USPTO trademark registration, a business may not be able to stop someone in a different state, or may not be able to successfully do a take down notice on a social media site, on Amazon, or another website.
Second, there’s the cost of time. The amount of time spent dealing with a dispute when a business doesn’t have a registration is almost certainly going to be more complicated and take longer to resolve. Unfortunately, I also see a lot of stress and emotion from business owners involved in disputes, or having to make a difficult decision to change a name, rebrand and incur additional expenses.
A name change that results from a trademark dispute can cost a business money by having to rebrand and replace those signs and menus, and maybe having to explain it to customers and replace lost patrons. But there’s also the damage to the brand that comes with the change. Why did you have to change it? Are you going to lose customers because of the change? Are they going to be confused? Might they think you’re under new ownership once again?
In sum, the costs of skipping the important steps to clear and to register a trademark can be very significant. But those costs aren’t just dollar signs, the are things that can have an even greater impact on a business, which are time, stress and emotions. I urge you to look at your brand and make sure that your business trademark is protected.
