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The Perils of a Poorly Chosen Trademark

Look no further than this news story about an Iowa t-shirt company that felt the very painful sting of failing to clear their trademark. The lessons that this company learned the hard way are the same ones I try to convey to my clients as early as possible in their business life cycle.

The best and most critical message from the story, and from any tale of a trademark dispute, is:

“For a company like this, the brand name is pretty much everything,” he said. “We don’t have an invention that’s ours that we sell to people. All we’re selling is the name of the company.”

I would add that even if you have a great invention and the patents to go with it, your brand name and the reputation it garners is likely to be one of the most important, if not the most important, assets of your business. This is more easily comprehended if you think of all the customer service, marketing, support, networking, and business development that goes into creating an association in your customers’ and potential customers’ minds between your business and quality of product or service that you deliver—all of this is wrapped up in your trademark and would largely have to be rebuilt if you were forced to change it.

To be sure, trademarks are more important to certain kinds of businesses than others. Any business that sells a product or service to a retail customer base, where purchase price is small and decisions are made relatively quickly, ought to be especially careful about trademark selection and protection. But any company that would like to avoid getting the news that they’ll have to change their name or their product’s name should spend the time and effort in clearing and protecting their marks from the get go.