Brand Name Pitfall No. 2: Failing to Properly Clear Selected Brand Names

One of the things that concerns me most as a trademark attorney is seeing brand owners adopt new brand names without undertaking proper clearance procedures. I sometimes see it my own practice. Usually it’s the 11th hour rush to launch a new product with the mindset of “nothing will get in the way of this important launch!” – not even trademark attorneys, apparently. Why companies wait until the last minute to find – what I consider to be one of the most important aspects of a successful brand – a name, I don’t understand.

Sometimes a product might be far superior to others, yet why does it sometimes rank number 4 while lower quality products rank 1, 2 or 3? Sometimes it’s the name. As I have said before, and as I try to convey to my clients, the “right” brand name can drive a product, while the “wrong” name can kill it before it leaves the starting gate. So why do some brand owners ignore the importance of properly clearing brand names? It is the budget? Not understanding the importance of clearance? Usually it can be a bit of both.

What is the value of spending $1000 or $2000 for a trademark availability search and availability opinion? First, a search will determine whether the selected name is likely to infringe third party trademark rights. What’s less expensive, re-branding after launch, which in some cases may be years after launch, or $1000-$2000 to make sure the name is free and clear? Believe me, I've seen companies go through re-branding projects after receiving a threatening cease and desist letter and it isn’t pretty. The cost to re-brand can be tens if not hundreds of thousands of dollars, not to mention the cost to educate customers and potential customers of the new name. Second, properly clearing a mark can drastically reduce the risk of infringements and lawsuits. Third, a proper search will determine whether the company can expand into ancillary products and services. I’ve witnessesd companies launch product A with the intend to expand into product B but to later find - to their dismay - that another company has already launched that name or confusingly similar name for product B. Now what?

Fourth, a search will determine whether a company can expand nationally or will be confined to only certain geographic regions. Fifth, a search will determine whether a mark is strong or weak in the relevant field. That is very important because it’s not the wisest decision to adopt a name or a term that is already widely used within a particular field. How will customers differentiate your product from competitors with a similar name? Sixth, lack of proper clearance has been held to constitute willful trademark infringement, which can result in loss of profits, statutory damages for the plaintiff and an award for attorneys’ fees against the infringer. Ouch! Seventh, on a global scale, proper clearance can also determine whether the adopted name has a negative connotation in a foreign language. What were they thinking when Electrolux launched the slogan “Nothing Sucks Like An Electrolux” in the United States and Pepsico launched the slogan “Come Alive with the Pepsi Generation” in China – which translates into English as “Pepsi Brings Your Ancestors Back from the Grave”!

All selected names should be properly cleared prior to their adoption. To ensure that proper clearance can be undertaken, names should be selected well in advance of launch – preferably 3-6 months. I know many – if not most - marketers think that 3-6 months sounds crazy. But in my opinion, launching a new product without taking the necessary precautions to clear the name sounds just a bit crazier.