In the HBO show, “Silicon Valley,” the protagonist Richard Hendriks is an awkward, nerdy creator of a fancy algorithm for a music app that helps songwriters figure out whether their songs are infringing on another person’s copyright. He’s been calling his app “Pied Piper” for reasons unknown, other than the fact that it vaguely has to do with music. The algorithm turns out to be extremely valuable, and Richard decides to start a company to develop and market it, also under the name “Pied Piper.” He brings on Jared Dunn, an awkward, nerdy business development guy, to figure out the procedures required to make Pied Piper a real company.
By doing some minimal research, Jared finds out there’s already a sprinkler company in Gilroy with the name “Pied Piper,” and the company is owned by a crotchety old man who wants nothing to do with young, rich techies. The man claims that he owns the rights to the name Pied Piper. To avoid a confrontation, Richard and his team attempt to come up with some new names, none of which Richard likes.
Jared: What about SMLLR? Because we make things smaller, and this would be, like, a smaller version of the word smaller.
Gilfoyle: Looks like Smeller.
Because this is television, after a series of hilarious mishaps, everything works out and Richard is able to convince the surly old man to sell him the name for $1,000.
My issues (why I screamed at the television set):
1) Richard paid $1,000 to obtain ownership rights to the name “Pied Piper.” No, no, no, no! Richard got ripped off because he paid Crotchety Sprinkler Man (“CSM”) $1,000 for an ownership right that doesn’t exist. CSM never “owned” the rights to the name Pied Piper because no one can own the rights to a name — you can register the name with the USPTO and receive limited protection for it under trademark law. While CSM’s sprinkler company could potentially sue Richard’s company down the line for using the name “Pied Piper” if it caused damage to his sprinkler business, trademark protection doesn’t entitle a registrant to exclusive use of a name.
2) Maybe Richard paid $1,000 to obtain CSM’s agreement not to sue him for infringement. Putting aside the fact that there were no witnesses to this “agreement” or a receipt from CSM confirming that Richard paid him $1,000 (high risk), even if Richard paid the money to preempt CSM from suing him, he was still probably ripped off. Would CSM’s sprinkler company have a viable trademark infringement claim against Richard’s compression algorithm-based startup? Where is the likelihood of confusion? “Pied Piper” itself is not a very distinctive name, as it’s based off of a well-known childhood fairytale. CSM operates out of Gilroy, a small farming community 50 miles (and a world away) from the heart of Silicon Valley, where Richard’s company is based. CSM deals in sprinklers and Richard deals in . . . something so technologically complicated that Richard can’t even describe it in layman’s terms. And CSM’s customer base (probably mostly farmers) likely won’t overlap with Richard’s techie base.
3) The sprinkler company is the only company in the immediate area that uses a name as generic as “Pied Piper.” This one is more of a “reality” gripe than a legal one. Such a generic name would probably have at least dozens of owners, a few of which may be in the Bay Area (and according to the Wall Street Journal – there are). An additional consideration is that the name Pied Piper could potentially infringe on similar names. It doesn’t appear that Jared did a search for similar marks, and searches through the USPTO’s online system are limited. What if there was a plumbing company called Pied Piping? What if there was a local bakery called Piper’s Pies?
Lessons from this episode:
It’s probably not a great idea to immediately pay someone for ownership rights based solely on the person’s representation that he/she has these rights. Do your research and consult a professional.
If you’re starting a business, don’t become invested in a name (emotionally or monetarily) before you, or a business-savvy person at your company like Jared, have done your research. The USPTO website has information on how to conduct a trademark search through its Trademark Electronic Search System. You can also retain a private trademark search firm or an attorney to do a more thorough search for similar marks that may present problems down the road.
Don’t be forced into a situation where you’re surprised by an infringement suit well after you’ve established your company and your brand. And don’t settle for a name like SMLLR.