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What if Someone Else Owns the Trademark I Want?

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Imagine this scenario: you start building a business from scratch. You pour your heart and soul into developing a brand you believe in and building a loyal customer base. You even do all your homework to make sure that your brand name is unique in your state. But, when it comes time to file for federal trademark protection, you learn that someone else already holds the trademark to your brand. What do you do? You are in too deep to just switch your brand name – after all, your customers have come to know you by your current brand!

At The Brand Protected ®, we do our best to avoid this kind of scenario right from the start. That’s why we conduct thorough searches of all trademark databases (as well as extensive online searches) to make sure that you will be the sole owner of your unique brand identity. However, many of our clients come to us afterthey have already been doing business under a certain brand some. Sometimes, they come to us decades into their business lives, when it is far too late to change course. In these cases, all is not lost. There are some things you can do to try to resolve the problem if you learn that someone else owns the trademark you want.

Persistence is a Key Ingredient

You may have seen this storyin the news this week. It’s the story of how Elon Musk, CEO of Tesla, actually obtained the legal rights to the trademark “Tesla Motors.” Before Tesla was Tesla, the trademark was held by a man named Brad Siewart, who had already owned the name for ten years at the time Musk approached him in 2004. Musk tweeted that Siewart didn’t want to sell him the trademark, so “[w]e sent the nicest person in the company to sit on his doorstep until he at least talked to us and then he said yes.” According to The Independent, Tesla ended up paying Siewart $75,000 to obtain the trademark. This may seem like a lot to those of us with local businesses, but to Tesla, it was a real bargain. Especially as compared to what the company had to pay to obtain the website domain, Tesla.com. The web address took ten years to secure and ended up costing Tesla $11 million!

So, what can we learn from Musk’s story? First, is that obtaining the rights to a name you want is, in fact, possible with a little tenacity and persistence. The second, far more obvious lesson, is that it can cost a lot of moneyto get what you want.

Purchasing a Trademark from Someone Else

As Tesla’s story shows us, it is possible to buy trademark rights from someone else. In legal terms, this is called “trademark assignment.” SIDE NOTE: trademark assignment is not the same thing as trademark licensing, which we’ve discussed elsewhere. Although the actual cost of the mark will vary widely depending on the current owner, the value of the mark, and how important obtaining the mark is to you, the process of assigning a trademark isn’t outside the realm of possibility. It will, however, be fairly complicated. Here’s how it works:

Trademarks, as we know, are only valid when used in commerce. They are also specifically used to identify a particular good or service. So, how is it possible to purchase a trademark that is associated with another company’s goods or services? The short answer is, you have to buy the whole thing. Yep, you have to buy that company’s assets andtheir “goodwill.” Goodwill is kind of a complex intellectual property concept, but it basically is the valuation of a particular company’s reputation or standing in the marketplace. In general, the longer a business has been around, the more goodwill it accrues. So, a business that holds no assets and hasn’t been around too long, will likely have a low cost of trademark assignment. A business with huge assets and strong goodwill will drive the trademark value up.

There are countless ways that trademark assignment can be tailored to the mutual satisfaction of the seller and purchaser of a trademark. However, they are far too complicated for a blog post and shouldn’t be conducted without the help of an attorney. Suffice it to say, there are options if you find that it is necessary for you to purchase someone else’s trademark.

Despite the complexity (and possibility of astronomical cost) that comes with trademark assignment, some business owners actually choose to purchase trademarks, rather than register one from scratch, simply because it takes less time. Trademark registration can be a long, and sometimes burdensome, process.

Obtaining a Domain Name that is Already in Use

Ok, so we know trademark assignment is a possibility, albeit a fairly complex one. But what about a simple domain name? You are committed to your business brand and are in pursuit of trademark ownership, but what about your web address? Very often, this is the first and best place for customers to connect with your business. How will they find you?

When you settle on a business name that is available in your state and has an available trademark, you can jump in with both feet right? Not quite yet. The next step is to check and make sure that the domain name you want is available. You can do this all kinds of places, including your website host, GoDaddy.com, and Google Domains (among many others). If the domain you want isn’t available, you often can find something that is similar enough to make sense. For example, a company called “Kelly’s Socks, Inc.” may want the domain kellyssocks.com. But, if it’s not available (or if it’s too expensive), they may choose to go with kellyssockstore.com or buykellyssocks.com.

If a similar domain isn’t right for your company, or if you have your heart set on a particular domain, you may need to go through the “domain aftermarket.” This is the marketplace where you can buy domains that are already in use or owned. GoDaddy.com’s aftermarket can be found at auctions.godaddy.com. However, not all domain owners are actively seeking to sell. If a particular domain isn’t listed in an aftermarket, you may need to go straight to the source. This is where an attorney can be a big help.

An attorney can help you do the research to find the owner of a particular domain and initiate contact. If you are trying to buy a domain directly from the owner, it’s likely that there will be some negotiations involved, especially if the domain is currently in use. It is important to approach negotiations from a position of mutual benefit, rather than an attempt to “low ball” the owner. The owner will know that they have something you want, and negotiations can be fragile.

Not sure how much you should expect to pay for the domain of your dreams? GoDaddy.com has thought of that, too. They have an appraisal feature on their website that analyzes the value of a particular domain and gives you a price that you can use in your negotiations.

Avoid the Hassle and Expense, Get it Done Right the First Time

As we mentioned at the top of this article, of course the best way to avoid the stress, expense, and time involved in obtaining trademarks and domain names after you’ve built up your brand is to get things done right the first time. At the outset of your business venture, meet with an experienced trademark attorney to talk through your business goals and your brand ideas. A good attorney can do all the research for you and help you identify whether a particular brand idea is worth pursuing. Then, as your brand continues to build, they can support you in protecting your investment every step of the way.

If you are ready to talk brand protection, reach out to The Brand Protected ® for an initial consultation. We are here to help you find success with your business.

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