It is becoming all too common that after spending much time and money to develop the perfect product, one finds that the perfect name for the product is owned by someone else. Even as flexible as the English language is, there are only so many relatively short, pronounceable names for an ever increasing roster of products and services. This is even more true when looking for names that work well the major languages of the world. When it must sound good in Arabic, Chinese, English, French, German, Hindi, Italian, Japanese, Korean, Portuguese, Russian, and Spanish too, finding a good name is a real challenge. Yet the good names are constantly being registered as trademarks, putting them out of reach.
Many of the trademark reservations end up going unused or underused because the products that they are paired with simply don’t succeed. These unused or underused trademarks are often perfect for new products. However, one must first acquire the rights to the existing trademark, a task that can be almost as difficult as finding the perfect name.
The first step in acquiring a trademark is to find identify all of the owners in each jurisdiction where you plan to use the mark. National trademark registries list this information, but relying on the registries alone is never enough. For example, the entity listed as owning a mark may itself cease to legally exist, such as when the company organized to make and sell the product identified by the mark ends operations. In many jurisdictions, the defunct company may no longer have the ability to transfer the mark.
After identifying all the owners and verifying that they do in fact have rights to the mark, it is important to verify that the owners have the right to transfer all the needed rights. A large US company recently had this problem in China when it bought the rights to a name for a multibillion dollar product from a Taiwanese parent company without securing ownership from the Chinese subsidiary of the parent that held the Chinese registration. The subsidiary later sued the US company and won a large award by asserting that there was never a legal transfer.
One must also verify that there are no third-party rights to the mark. In the United States, a first user of a trademark can be vested with common law rights to a mark, even if it never registers the mark. Preregistration use by local businesses is also recognized and protected in other countries too. These rights are not transferred in the purchase and may need to be acquired separately. Rights to a trademark can also be licensed to third parties by the original owner. All of these rights must be identified and managed. Otherwise one may be surprised with a law suit.
Purchasing trademark rights will be more common, and important, as business becomes more international, and competitive. One can purchase the trademark rights for a perfect name without repercussions through proper research and due diligence.
