This one goes back more than a few years, but it’s being resurrected because the issues are timeless, and it’s a little amusing looking back when I was just a bit feistier, at least in print. Email me if you have a good guess as to what year it first appeared.
It was so tempting, but I didn’t dare poke the giant beast, even though I could have gotten away with it, and then illustrated a memorable lesson that’s probably important for most of our readers.
It started when I was reading one of the industry’s email news services. This service starts off with a half dozen news releases, and these are followed by a feature article reviewing a new gun, covering a shooting competition, or discussing gun politics. I tend to focus on the press release stories, because I see who’s moving around in the industry, and especially new product releases with trademarks that might violate our clients’ trademark rights.
It wasn’t exactly April 1, but it was close enough. And the situation that came up wasn’t a new one, but it was remarkable because of the size and reputation of the company involved.
How Promoting a New Product Can Cause an Expensive Headache… …or Worse
It’s a classic blunder, and amazingly common. It comes from following the wrong kind of “common sense” and being unaware of a critical legal issue that can lead to an unthinkable business disaster.
It happens when a company has developed a new product. It might even happen to a new start-up company just opening their doors. What’s the first thing you want to do when your new baby is about to be born? Tell the world!
It’s the most logical and sensible approach to marketing a new product. If it’s a new invention, you’ve probably already filed a patent application, so you’re cleared to let the cat out of the bag, right? Shout it to the mountain tops, and let the darned thing start selling!
One of the first things you do when you have a new product is a no-brainer: Send out press releases to all the industry publications. This especially includes the email news release services, because they can turn it around fast, and are almost free. I find that the “new products” I read about in the big gun magazines are about two months old, and we’ve already heard about them on the Internet or by email news. (Update: In the YouTube influencer era, email press releases seem nostalgically quaint, don’t they?)
Why I Keep an Eye On New Product Releases
Like any gun nut, I enjoy keeping up on the new toys being released. But I watch the new product releases closely for a more important reason: Policing our clients’ brands. I want to be sure that if someone adopts a trademark that infringes our client’s trademark rights, I can jump right on it, and nip it in the bud. I do everything I can to avoid delaying this intervention because the longer we wait, the more entrenched the infringer becomes. The more they’ve invested in advertising the infringing brand, the more they’ll invest in a legal fight. I want our clients to have fast and inexpensive solutions, and keeping up on the “new product” news helps with that.
That’s also why each month I search and review every trademark filed with the U.S. Patent and Trademark Office by firearms companies. I can spot infringing brands filed by companies even before they’ve announced or released a product. They’re wise to file early like this to avoid losing their rights to a later filing when someone innocently (or not) adopts a mark similar to the one the company was going to use on their future products. However, they aren’t so wise when they blindly file a trademark application without first searching to find out that their wonderful new brand infringes one that we had already registered for one of our clients. But if you’re going to foolishly file without first searching, at least it’s smart to do it before you start advertising the brand and printing up packaging, because at least it won’t be so painful when you have to drop the infringing new brand name.
So I read the industry news wires with pretty serious interest. But sometimes, I get curious when I spot a new product with an interesting brand name, and I do a search just to check it out. Sometimes I get a little voyeuristic, and if the application wasn’t filed by an attorney, it means someone is trying to save a few bucks by doing it themselves. Because the documents are publicly available on the Patent and Trademark Office website, I see some real doozies where the application was so messed up it has no hope of success. Sometimes, I’ll even end up representing that company to refile the application so that they can secure the rights they deserve.
My Favorite Trademark Snooping Activity
My favorite trademark snooping activity is to find all the filings where a new brand is being proudly promoted, but hasn’t even been applied for. This might not seem shocking if you’ve heard that you can always get around later to registering your trademarks, even years later. That’s true, but advertising a brand you haven’t secured or used is like leaving your garage door open, and running a newspaper ad that you’re leaving the keys to your new Porsche in the ignition!
To understand why it’s so dangerous to promote a brand you haven’t secured, I need to explain the two big blunders.
Blunder #1: They Didn’t Even Search Their New Brand Name
The first risk is announcing (or using) a brand that hasn’t even been searched to make sure it’s safe to use. A pre-usage search is a fast, inexpensive process, and is critical to making sure that YOU don’t end up receiving a nasty lawyer letter telling you that you need to scrap your inventory, change your plans, and kiss goodbye all the advertising investment you’ve made. Usually, you won’t have to pay damages or their attorney fees if you take your lawyer’s advice and roll over. If you’re lucky, we might be able to negotiate a phase-out period to let you sell out your inventory, so you don’t have to scrap it. Most of the time, a trademark owner will just want to be sure that you stop the infringement, and won’t want to sue just to collect some more damages.
Every time I see a new product brand name that I know infringes one of our clients’ trademarks (or the trademark I recognize as owned by another company in the industry) I can be quite sure that the company releasing the new product didn’t search it.
Blunder #2: They Posted a Neon “Steal Me!” Sign on Their Valuable Trademark
This is the key blunder, and the one that tempted me to play a major April Fool’s joke. First, if your new brand name hasn’t been applied for, and hasn’t been used on products that have been sold, it’s extremely vulnerable. It may be the best brand name in the world, perfect to promote your product, and destined to be worth millions (or billions) as a business asset. But if it hasn’t been used (on products sold in interstate commerce) or applied for, you have no legal rights in the name.
This is why smart companies in our industry and everywhere else treat proposed brand names as top-secret corporate intelligence. They keep their new brand names strictly confidential. And they certainly don’t issue press releases about their future strategic branding plans! After all, if a couple of gun-nut trademark attorneys were half tempted to play an April Fool’s joke in order to have an interesting “teachable moment” story to tell, what do you think a company’s cutthroat competitors would do? Or what about some legally-clever extortion artists?
Do You Make the Same Blunder These Big Guys Did?
Now and then, even big companies with teams of lawyers blow it. But not the biggest industry behemoths like Remington, huh?
Actually, our story is all about Remington. And it’s not just one little new brand on a minor product. It’s about one of their biggest product introductions in a long time. I saw it in the email news one morning, then it was all over the internet in moments. It’s their R1™ 1911 pistol, and it’s gotten a lot of attention.
R1™ Pistol on the Remington Home Page
Predictably, the attention it got from us was a quick search on the U.S. Patent and Trademark Office website to do a trademark search. My jaw dropped when the result was: “No records were found to match the criteria of your query.” How could this monster company neglect such a critical asset? What’s amazing is that two months later Remington still hasn’t filed to secure the rights to this important brand name. (Update: Another company has since registered R1 for firearms)
What Would Have Happened If I Had the Nerve?
Suppose that today, with no Remington R1 trademark application filed (not at the time this was written), I filed my own R1 trademark application, just for the fun of it. Or suppose that a Remington competitor or disgruntled former employee or extortion artist decided to have their lawyer file their own R1 trademark application?
Odds are, the application would get the stamp of approval by the trademark examiner. That’s because Remington can’t participate in that part of the process, and the examiner probably doesn’t care that Remington’s R1 is all over the internet. Examiners stubbornly refuse to consider whether maybe Remington started using the trademark first, and might have superior rights. They figure if Remington wanted to protect their trademark, they would have filed an application. Bottom line, whoever files first earns the examiner’s favor.
After the examiner gives the application the thumbs up, it is “published for Opposition.” Here’s where Remington has a chance to get involved. If (big if) Remington’s lawyers are on the ball, they are watching the trademark database, and they’ll have 30 days from the date of publication to file an Opposition. This is why I review every trademark filing every month, so if something that deserves to be opposed by one of our clients is filed, I can put it on our own little condition-red “watch list” so I don’t miss that window of opportunity.
Now, if Remington’s managers and attorneys are asleep at the switch regarding the need to file to secure their trademarks, it’s hard to imagine that they’re being alert watchdogs to the filings made by other companies.
But even if they noticed our nefarious application within the 30-day window, they’d be faced with filing an Opposition. An Opposition is like a mini-litigation over the issue of who really deserves the trademark rights. It includes depositions, evidence, legal briefs, and the rest of that litigation fun. If an Opposition is fought to the end, each side can easily have six-figure legal bills. I can reveal that in this example, Remington would win, because the competing trademark application would have been filed well after Remington actually started selling R1™ pistols nationwide. That gave them “common law” rights that the examiner ignored, but the Trademark Trial and Appeal Board will respect (but only after extensive evidence is expensively presented).
End result, Remington ends up having to spend a fortune to get the rights it would have had for next to nothing, if only they’d simply filed a trademark application before announcing their product.
Knowing this, how much do you think an extortionist could get from Remington to make the problem go away so that Remington can avoid over $100,000 in litigation expenses? $5000? $25,000? And I can tell you that an extortionist could do this many times per month in our industry, if the pattern of announcing brands before securing them continues.
Now, Imagine That Remington Loses!
In the last scenario, the extortionists lost the litigation, but might have gotten a decent payday. That’s because they filed their trademark application after Remington started selling their R1™ pistols. But in April, when I spotted the new releases, Remington hadn’t yet sold any pistols!
This means that an extortionist will WIN the opposition. They will own the R1 brand. And they’ll have the right to order Remington to cease and desist from selling R1 pistols! That means that the fortune Remington invested in full page color ads in the major magazines will be lost, and Remington will have to scrap all those pistols with the R1 trademark engraved on their slides, as well as all the R1 packaging. Either that, or pay the extortionists. ($100,000? $1,000,000?)
To repeat, if the extortionists (or a prankster) filed a trademark application after a company announces a product name, but before product is sold (or the company files their own trademark application as they should), the extortionist wins. He is entirely in the right, legally speaking. He can sell the trademark rights to your worst competitor, or keep them for himself. He can demand a royalty for every product you sell under his brand. Or, he can simply shut down your newly-branded product, forcing you to change the brand or pay damages.
I noticed Remington’s blunder, but apparently no one else did (or I would have found their application in the trademark database). It’s a common blunder, and an expensively dangerous one.
Lesson: File First, Announce Second
We’ll keep an eye on the trademark database, and let you know when the Remington lawyers get around to filing their application. Until then, anyone could file and create a nuisance of themselves, knowing that they might get a small payoff because Remington wants to avoid an expensive legal battle.
Incidentally, I see that there are some valuable domain names that Remington hasn’t secured: R1Pistol.com and RemR1.com. The first one I checked: RemingtonR1.com was registered a month after the product release, but not by Remington – it’s owned by a guy with a Hotmail email address.
The lesson here is that the computer-jockey bottom-feeders will scour the net for new product names, and register the domains to generate traffic, and then offer them up to you for sale at a tidy profit. Even without owning that name (or engaging in the kind of domain recovery services I provide) Remington can still sell its R1 pistols at the main Remington site. It’s annoying, and might cost some profit, but Remington can ignore domain-name pirates if their demands are excessive.
But imagine if the domain-name pirates suddenly caught on to this untapped trademark opportunity. Their demands could not be ignored, and the consequences could be enough to destroy careers, or companies.
The bottom line is that if you aren’t going to make the modest investment in applying for new brands before announcing them, then please don’t announce your new brand before you start selling it nationwide. That way, at least the extortionists won’t expect you to write them such a big check.