Startups: Protecting your Trademark and your Reputation

Startups, especially those at an early stage, focus on building a positive reputation among their users.  Unfortunately, different team members can harm your startup’s reputation – including the legal team when they police your trademarks!

I have noticed a growing number of negative consumer responses to otherwise standard trademark policing actions, primarily cease and desist letters.  Attempts to protect a brand now have the potential to generate negative consumer perception of that brand and may require a trademark policing strategy that considers consumer perception.  Trademark policing involves searching for (among others) unauthorized use of your trademark or trademarks that are confusingly similar to your own.  I must stress that trademarks must be policied.  However, in scenarios where trademark infringement or confusing similarity is extremely weak, I believe that your legal team should factor negative consumer perception into the decision to undertake policing action.

Consider these two questions when determining whether negative consumer perception will result from a policing action:

1. Size of market and consumer knowledge?

The potential for negative consumer perception is greater in a small market with informed consumers.

2. Size of enforcing party relative to allegedly infringing party?

The potential for negative consumer perception is greater in a David versus Goliath scenario.

In the sports world, two large companies recently undertook trademark policing actions against small, local companies with loyal consumer bases.  The result was an uprising of support from around the world for the small companies and substantial negative consumer perception of the large companies.

While policing trademarks is necessary, overzealous policing action may not be.  Startups should consider the impact questionable policing actions might have on their brand, balancing protection and consumer perception.

Solution:  keep in touch with your legal team and understand their trademark policing strategies.