Why Trademark Searches Matter

Trademarks are the bread and butter of corporate IP assets.   They typically represent the largest percentage of a company’s IP portfolio simply because the registration process is relatively inexpensive. However, before you file a trademark application, and certainly well before you introduce your mark to the marketplace, the most important step you should take in preserving a trademark’s value is to conduct a proper trademark search.

Understanding how trademark rights are acquired in the U.S helps to put this advice into context.  Unlike in most other countries where rights are awarded to the “first to file,” trademark rights in the U.S. are granted on a “first to use” basis. In other words, a business can claim rights to a mark, even if an application for trademark registration was never filed with the Patent and Trademark Office (“PTO”), simply by proving it was the first user of the mark. (Of course, registration offers many important benefits and makes enforcement of rights much easier, but some limited rights can begin to form before registration.). Therefore, it is highly advisable to conduct a proper search before launching a new mark in order to minimize the risk of receiving a cease and desist letter or, worse, facing an infringement suit down the road. 

Clearly then, the key to a good trademark search is the degree of thoroughness. Selecting the right search will typically depend on several factors, including your goals for the search, your budget, and the intended use of the mark.  For example, if you are in the early stages of a product line development, it might make sense to a conduct a “preliminary” search in order to eliminate obvious roadblocks presented by existing marks.  If the stakes are higher – perhaps you are preparing to speak with potential investors – a “full” search would offer greater protection against future challenges to your mark.  However, it is important to distinguish these searches from a search of the PTO’s database, which is limited in scope to only exact marks found in the federal registry, and therefore, not nearly as reliable. 

Below is a comparison of the two search levels offered by Patent GC: 

Level 1 Preliminary Search

– This search is designed to knock potential marks out of contention for relatively low cost.

– A proprietary database is searched for direct or near direct hits for your mark for the same or closely related goods or services.

– Federal and state filings, as well as international registrations with U.S. protection, are covered.

– Unlike a search of the PTO’s database, this search considers the mark and variations of the mark or the goods and services.

– This search level does NOT include searches for unregistered use.

Level 2 Full U.S. Search

– This search digs much deeper to identify and assess risks.

– An outside vendor with specially trained staff is engaged to search large proprietary databases.

– In addition to the federal and state trademark registries, the vendor searches industry journals, business listings, and domain name registries, among other sources.

– Wider variations of the mark are searched, such as phonetic equivalents to uncover “sound-a-like” marks, marks with similar spellings or meanings, etc.

– A voluminous report (often 300-500 pages) is then reviewed and analyzed by a lawyer for potential risks.

Once the decision to conduct a trademark search has been made, the next step is choosing the right search level.  For our clients, we advise consideration of the following key points:

• Expected Length of Use: Will you make limited, short-term use of the mark, or will you use the mark for a number of years or indefinitely?  If your use will be very limited, it might be reasonable to rely on a preliminary search.  If you intend longer use, you should also consider a full search.

• Intended Use: Will the mark be used in a significant branding or marketing initiative?  If so, you should consider a full search.

• Consequences of Lost Use: How easy would it be to stop using the mark and adopt a new mark if someone claims that the mark infringes his or her rights?  Consider not only products that you might have to recall and relabel, but also the loss of customer goodwill and the cost of new signage, business cards, advertisements, websites, apps, etc.  The higher the cost of rebranding, the more you should consider a full search.

• Expected Profitability: How much profit will you make from your use of the mark?  Consider both direct profits (such as the profit made on the sale of a product or service bearing the mark) and indirect profits (such as increased sales of other products and services attributable to your use of the mark).  If a court finds that you have infringed someone else’s trademark, you could be ordered to pay the direct and indirect profits you made from the infringement.  Moreover, if a court finds that you willfully infringed, you could be ordered to pay three times your profits.  You could also be ordered to pay the attorneys’ fees for the other side.

• Market Conditions: How competitive is your market?  Competitors have a financial incentive to disrupt your business.  A more comprehensive search helps you to identify problems before your competitors identify them for you.

As you can see, selecting an appropriate trademark search involves the same risk/benefit analysis used in other areas of business.  By weighing your options, including the risk of inaction, the benefits of conducting a trademark search seem obvious. Because a search can save you from any number of unexpected obstacles down the road, it is simply good sense to do one. For assistance with your trademark questions, please contact Wade Savoy at [email protected].