Four Costly Trademark Horror Stories and How to Avoid Them

Faegre Drinker Biddle & Reath LLP
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Faegre Drinker Biddle & Reath LLP

Since Halloween candy is already in stores (why…?), we‘re here to tell you some trademark tales that are sure to make you shiver – if you care about your pocketbook, that is.  We’ve encountered these spooky situations – with worldwide implications — when we’ve been brought in to clean up.  (Who you gonna call? Faegre Drinker!)

Read on, so you can avoid traps for the unwary.

  1. Plan your trademark transfers carefully and well in advance – and get all documents signed right away.  Let’s say you need to transfer worldwide trademarks from Pumpkin Corp. to Goblins Inc.  You get a single worldwide assignment document signed by both Pumpkin and Goblins on the date of the transfer.  All good, right?  Well, many countries’ Trademark Offices insist that you use their assignment forms, including specific provisions required by local law.  But if you don’t discover those local requirements until after Pumpkin changes its name to Thanksgiving Turkey Corp., you may need to record both the assignment and the change of name, possibly doubling your costs in every country where you need to record the assignment.  It’s worse yet if Pumpkin dissolves.  Sometimes there are expensive work-arounds, but not in every country — leading to loss of rights.
  2. Warn your facilities manager about trademark implications before committing to an office move. So you found cheaper office space down the street?  Great!  But did you consider the cost of updating your address in the records of all the Trademark Offices around the world?  That expense might eat up the money you saved on rent.   Failure to record an address change worldwide can hinder or at least delay trademark enforcement proceedings, so it’s best not to forgo that expense.
  3. Talk taxes and restructuring.  Make sure that new members of your tax and corporate teams know that they need to talk with your trademark team, and vice-versa, before anyone commits to a course of action involving corporate restructuring.  If no one tells the trademark team that Jack-O-Lantern Corp. is now a Delaware corporation, not a Texas corporation, your trademark team won’t know to stop filing trademark applications in the name of the Delaware entity.  In the USA, this can usually be fixed, but it takes time and effort that would be better spent elsewhere.
  4. Check with Legal before changing your logo. Designing a new eye-catching logo is a way to attract and retain business – but before you commit to launching that logo, assess whether your existing registrations for your current logo are sufficient to protect the new logo, too.  Otherwise, you may need to file new applications in all your markets.  (And don’t forget to conduct a trademark search to assess the availability of the new logo – and have the marketing agency execute a written assignment of any copyrights in the graphics!)

Promoting robust communication among all your departments will go a long way toward avoiding these scary scenarios.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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