The Name Game You can shield your trade name from being ripped off by a larger company--if it's distinctive enough.
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Five years ago, a small Georgia toy company called PeaceablePlanet began marketing a stuffed camel named "Niles." Thenext year, Ty Inc., the maker of Beanie Babies, flooded the marketwith stuffed camels also named "Niles." Peaceable Planetsued to protect its trademark. Last April, the 7th Circuit U.S.Court of Appeals ruled in favor of Peaceable Planet and ordered Tyto withdraw its stuffed camel.
Normally, lawsuits over trademarks involve a big company tryingto fend off a copycat. But under a legal doctrine called"reverse confusion," a small company can fight back whena giant threatens to overpower it by adopting a confusingly similartrade name.
It's not easy, though, to win a reverse confusion case. NewYork City attorney Lisa Pearson, a partner in the trademark lawfirm FrossZelnick Lehrman & Zissu PC, says that courts examine eachcase by many standards before finding a trademark violation.
"In some cases, courts have ruled that they'll apply atruncated standard so you don't have to show how famous yourbrand is," Pearson says. Under the easier standard, theplaintiff only has to show that its trademark is unique and thatthe infringing company would be able to saturate the market. Butmost courts insist on the full test.
Consider Glow Industries Inc., a California company producinggift baskets of bath and body products under the trade name"Glow." The company sued to stop entertainer JenniferLopez from marketing a line of fragrances, cosmetics and skin-careproducts under "Glow by J.Lo."
"There were other beauty products with 'glow' inthe name," says Pearson, who represented Lopez. Finding thatthe plaintiff's name wasn't strong enough to be protected,the California district court dismissed the case.
To avoid having your trademark overwhelmed by a largercompetitor, make sure it's unique. It can't be merelydescriptive, such as a line of chairs called "Chairs."Even a suggestive name, such as "Glow" for beautyproducts, is weaker than a fanciful name like "Apple" forcomputers.
Before choosing a name, use a trademark firm to do a search tosee who else is using that name, in the United States and abroad.Then have a trademark lawyer review the results. "Look beyondwhat's federally registered," says James Weinberger, anassociate at Fross Zelnick Lehrman & Zissu. "Are therewebsites that have that name?"
"The theory of reverse confusion is a fantastic tool forsmall business," Pearson says, "but it's properlyused to protect conceptually strong brands."
Jane Easter Bahls is a writer in Rock Island, Illinois,specializing in business and legal topics.
