The Hidden Costs of LegalZoom and Trademarkia

Sticking to What We Know Best

Most people aren’t afraid to invest in what they need, but few people want to learn later that they overpaid, or didn’t get a good value.  So even though it’s the first time I’ve been asked the question, I can understand why a careful entrepreneur would ask it.  He’s simply asking: “Please tell me why I’m not a sucker to pay you ten times what LegalZoom is charging.”

LegalZoom is a big web-based law firm, and they probably file more trademarks per year than any other firm.  I presume they keep all their promises to their customers, and do what they say.  So, LegalZoom has lots of experience, and charges $169 for a trademark.  So far, so good.

You tell them the trademark you want, and what products you’ll use it on, and they file it.  Before filing it, they’ll even search it to try to make sure it’s safe.  So, if you can trust that search, and you didn’t make any mistakes in selecting your trademark, and don’t need any guidance in using the trademark, you might save some money on the business asset that could end up being the most valuable asset you own.

Unfortunately, there’s no such thing as a free (cheap) lunch when it comes to securing your important business assets.  Obviously, if you’re looking for a legal adviser whom you can trust to guide you as your business grows and give you strategic advice, you probably already know that you need something more than a website to help you fill out government forms.  But for readers who haven’t yet gone through the trademark process, I’ll explain just how it works.

The Free Advice that Helps You Avoid Needless Legal Fees

When I get a call from a prospective client, I’ll usually invest five or ten minutes to learn about their business.  Sometimes, it turns out that they simply don’t need any legal services.  Instead of filing a trademark application they don’t need, I’ll tell them they can wait until the time is right, and spend their funds on other priorities for now.  LegalZoom might be cheap, but they probably don’t have an algorithm to tell willing customers that it’s too soon to start filing things.  For instance, this can happen when someone asks about using a slogan in a way that simply isn’t trademark usage.  They might be ready to spend the money and file an application that will never be granted, or they might get a registration that can never be enforced, because trademark rights require trademark use.

The Trademark Search You Should Never Trust

Part of the LegalZoom package is a trademark search.  That’s critical.  But it’s a trap for the unsuspecting.  That’s because the included search is a “direct hit” search.  That might sound like “extra strength” or “weapons grade” to the unsuspecting, but in reality it means it’s just about worthless.

A direct hit search means that the searcher (which might very well be a computer algorithm and not a trained searcher or lawyer – I can’t tell) will search only the exact spelling of your trademark for identical registered trademarks.  But you probably already know that trademarks don’t need to be identical to infringe.  They can have different spellings, and even different words and you can still end up in legal hot water.  Which means that a LegalZoom customer might have a trademark that’s going to get them sued the moment the owner of the similar trademark gets wind of it.  This LegalZoom customer will then need to pick a new trademark, having wasted all the past investment in promoting the old brand.

When a caller tells me he’s “already done a trademark search” I never trust this, because it usually means that his Secretary of State has cleared the company name as not being identical to any other company names in the state.  That’s just about meaningless for trademark purposes because similar names can still infringe, never mind the other 49 states’ businesses.

There are reputable trademark search companies out there, but they’ll charge you about as much for a worthwhile search as LegalZoom will charge for the whole trademark package.  And then you’ll still need to talk to a lawyer to answer the question: “So, does this mean I can or can’t proceed with my first choice brand name?”  If your new brand is X2O for scope rings, and there’s an ammo company with the brand XZO, a binocular company with the brand X2O2, and another scope ring company with H2O, what will you do?

The good news for the guy who called me is that I’m a Curious George with opposable thumbs, so I can access the trademark database pretty quickly while we’re chatting.  And whether or not he ends up hiring me, he might have learned that he’s picked a risky brand, or maybe that it looks pretty clear – I’ll usually caution that we can’t find everything, and the search I include in the trademark filing will be more thorough.

My advice in close cases is that even if you might win the lawsuit filed against you for trademark infringement, you’re better off picking a second choice trademark that never attracts a dispute.

The Fun Part of Trademarks that LegalZoom Misses Out On

LegalZoom won’t tell you that you’ve picked a darn cool trademark, or even that your pick is lame.  I will – but in gentle language.  True, I’ll still file the lame ones if they clear searches and you insist, but I’ll probably explain why avoiding the clichés helps distinguish you from the pack.  If you’re an industry leader you can maybe get away with three-letter acronyms (“TLAs”) but a newcomer should consider something more distinctive to make a bigger splash in the market.

I truly enjoy helping out with branding ideas and suggestions, and am flattered when a client picks a brand I suggest.  One of my recent favorites is STR8IGHT FLUSH for CPD’s 8-round single stack magazine that fits flush with a standard frame 1911 pistol.

I also recommend reading a certain good book on branding (“Hello My Name is Awesome” – no I didn’t write it, but I occasionally advise some of the author’s clients).  When you understand that there’s an effective process of coming up with brand names that help you sell, you’ll stop the old practices of picking whatever the boss likes, or picking acronyms that were adopted as internal descriptions for a project.

The Usage Blunders LegalZoom Won’t Catch

On that first phone call, I’ll help the caller with a question they didn’t even have: What actually is the trademark?  They might be asking me to trademark “Aria Precision Arms Company.”  And that’s what LegalZoom would file for them.  But I’ll quiz him whether he might want to just use the word “Aria” alone sometimes, or “Aria Precision.”  I’ll advise that one should pick one trademark, and then stick with it religiously.  So we might end up agreeing that Aria is the trademark, and “Aria™ Precision Arms” is how it might appear in ad copy, without having to use the whole phrase every time.  It might also mean stronger protection against an “Aria Rifle” infringer.

When we proceed, I’ll also review the way my client is actually using the trademark on his packaging, advertising, and catalog.  I’ll provide any needed tweaks to make sure they get the right trademark symbol and aren’t butchering their own trademark.  A scan through a client’s catalog can quickly reveal a number of usage errors that are easy to fix, and are easy to explain so the marketing people get it right in the future.

The Long Run

Over time, I’ll get to know my client’s needs, and how their family of trademarks works together.  When conducting my monthly search of all the trademark filings in the gun category, or when surfing the web for gun stuff, or just following my Facebook gun geek friends, I’ll encounter potential trademark infringers and alert my client (I don’t think the algorithms or call center team at LegalZoom will do that.) Ideally, I’ll educate the key people at my clients and make them smart about trademarks, so that they’ll be making smart initial branding and strategic decisions without me, and most importantly will know when to pick up the phone and consult me.

The Alternative

As it looks to me, LegalZoom has probably set up their website to be more user-friendly than the U.S. Patent and Trademark website (which isn’t hard).  So their customers are filling out the LegalZoom forms, and LegalZoom plugs the data into government forms.  You get 30 days to talk to an attorney, presumably if you’re confused about how to describe the goods, and things like that when filling out the form.

LegalZoom’s best competition for those who can’t afford the investment in a full service trademark application is probably to learn how to do it yourself.  Both are risky, but D-I-Y is $225 instead of $444.  One can Google for how-to advice, and the government website can be navigated by a determined amateur.  I don’t advise it for important trademarks, but even if you blow it and have to file a second time, you haven’t cost yourself anything.  I suppose that a clever trademark applicant could read this article, read my patent and trademark book, then call and chat me up for a little bit of the free advice I tend to give out, and file one for himself.  It might actually work, but in all my years of reviewing every firearms industry trademark filing, I’ve never seen anyone take it that far.

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About the Author: Ben Langlotz

Ben Langlotz is the nation’s leading firearms patent and trademark attorney, and the author of Bulletproof Firearms Business: The Legal Guide to Success Under Fire. He is trusted by more firearms industry companies than any other lawyer or law firm in the nation, and is consistently ranked at the top of all attorneys in securing gun patents and gun trademarks.