Trademark Clearance: What Is It And Why It’s Not An Option In The Brand Name Process

Once a new brand name or names have been selected for consideration for a new product (which I have written about here), the next step in the brand naming process is to ensure that the selected names are available for use and eligible for federal trademark registration. That step is known as “clearance.” The clearance step involves making sure that the selected names do not infringe third party trademark rights and are distinctive, thus immediately protectable upon first use.

Clearing marks before product launch is a necessary step and expense. Under U.S. law, courts may find that a trademark owner “willfully” infringed a third party’s trademark rights absent proper clearance. Willful trademark infringement may subject the infringer to statutory damages and plaintiff’s attorneys’ fees. Also, the expense of clearing marks is certainly less expensive than re-branding a product. Believe me, re-branding under these circumstances is not pretty. I’ve witnessed the process…more than once.

In addition to the reasons mentioned above, here are five other reasons to clear marks:

1. Determines likelihood of product expansion under same trademark. Properly conducted clearance searches should determine the likelihood of product expansion under selected trademarks. In other words, should a trademark owner decide to add complementary product offerings in the future, would the selected mark likely be available for those new offerings or would such use infringe third party rights?

2. Determines geographic regions in which selected trademark should not be used due to prior users of the same or confusingly similar marks. Trademark rights are geographic in nature. Meaning that trademark owners generally only secure trademark rights in those geographic regions in which marks are used (absent securing federal trademark protection). For example, if a clearance search discovered a user of a selected mark in Chicago (and that use was limited to the Chicago market only), the “newcomer” or “junior user” of that mark may launch a national product under the same or similar mark other than in the Chicago market. That holds true even if the “newcomer” secures a federal trademark registration. Use of the selected mark in the Chicago market by the “new comer” would subject the “new comer” to trademark infringement.

3. Determines whether selected trademarks are weak or strong. Clearance searches should determine whether selected marks are weak – meaning there are many other users of the same or similar marks or term(s) for similar products or the selected marks are descriptive or suggestive of the associated products. The “weaker” the selected mark, the narrower the scope of trademark rights and protection. Weak marks may limit future expansion within the trademark owner’s field of use and, in some instances, may not even be enforceable trademarks. How would you feel if your company spent tens – even hundreds - of thousands of dollars promoting a brand with a brand name that is not legally protectable and worse with a brand name that your competitors may freely use without infringement?

4. Determines whether selected marks have negative connotations in other languages and cultures. How would you like to launch a new product under a brand name that conveys a negative connation in a foreign language? There have been countless stories of brand name gaffs due to foreign translation and meaning. For example, one of the more well known branding blunder legends is that of the Chevrolet Nova. As the story goes, the word “no va” means “won’t go” in Spanish. And for that reason, Chevrolet apparently had difficulties, as one might expect, selling the Nova model in Latin America. True or not, the Nova legend amplifies the importance of clearance.

5. Determines whether corresponding domain name is available. One of the first tasks in the clearance process is to see if the selected trademark’s corresponding domain name is available. Or at least check to see what kind of web site is used with the corresponding domain name. During a conversation with a client several years ago about a trademark infringement matter, my client asked that I take a look at her company’s web site. I proceeded by entering my client’s name in the URL window and pressing “enter.” To my surprise, my client did not own the .com generic top-level domain name for its name. Instead, it was being used for a pornographic web site. I instinctly said to my client, “well I guess you don’t own the .com domain name!” She said: “No! We’re at .net.” How many other customers and would-be customers went to wrong site? Don’t let that happen to your company. Don’t be that company.

In addition to the reasons discussed above, there are other reasons to properly clear marks before use. Before launching that next brand, be sure to undertake all necessary steps in the brand name process. What you don’t know may hurt you.