Monday, August 6, 2012

Board-Level Attention to Trademarks is Essential

This Article is authored by Melise Blakeslee, of counsel.*

The protection of intellectual property may seem like a day-to-day operations task with which senior executives and Board members need not concern themselves in the absence of a crisis. But in today’s world of rapid expansion, particularly into the international realm, keeping a close eye on some aspects of trademark protection is sufficiently essential that it warrants high-level attention.

As the Board of Directors begins to explore expansion into international markets, it is important that they ensure that the appropriate product marketing people as well as the company’s trademark counsel be brought into the discussion early. It is too easy to lose valuable trademark protection during international expansion. Many nations have what are called “first to file” trademark laws that assign a trademark to the first person to file for it. If third parties, including your own distribution and manufacturing partners, get wind of your expansion plans before you have secured your trademark rights, difficult and expensive situations can arise.

It is also important that members of the Board monitor senior management to ensure that distribution agreements include appropriate trademark protection language. Too often, these agreements are silent on the subject and in this case silence is clearly not golden. In the absence of clear protection language, a distributor may pre-empt your trademark rights innocently or intentionally. Determining the right person or company to secure particularly international trademarks is a function of the company’s long-term goals. And these goals are most often best understood by members of the Board.

Recent experience leads me to guess that nowadays many marketing departments are “clearing” new trademarks by simply doing a Google search on the Internet. This is a mistake. Conducting only an informal search opens the door to a charge of willful infringement and doesn’t give you any insight whatsoever as to the ability to move into other related product lines using the new brand. It is vital that proper searches be conducted in accordance with best trademark practices to ensure legally binding protection and avoidance of litigation.

Staying on top of possible infringements of your trademarks is another place Board members can play a key role. Insisting on constant monitoring and vigilance of the Internet for mentions of your brands can save significant amounts of money and time by nipping even innocent infringement in the bud. Management should ask for regular reports about what particular trends are impacting the company’s brands on the Internet. Using these reports, management should be giving guidance as to what should be pursued and how. This task is endless, unfortunately. The good news is that consistent enforcement with careful prioritization and smart strategies will help in the long run.

Melise provides advice to clients of The Berkman Law Firm on a vareity of matters including the intricacies of protecting, licensing and enforcing intellectual property rights, and brand protection, Internet-related problems, and data security. She is the author of Internet Crimes, Torts and Scams: Investigation & Remedies, published by Oxford University Press, 2012.

Disclaimer: The discussions in this blog do not constitute legal advice nor create any attorney-client relationship. You are urged to seek the advice of an experienced lawyer who can provide counsel with respect to your corporate/business law matters

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