Name Calling

Playing the trademark game.

Who is The Pizza Maker, anyway? Entrepreneur Mark O'Brien in White Lake, Michigan, says he is--and used a federal trademark to stake his claim. But Allied-Sysco Food Services Inc., a subsidiary of billion-dollar food distributor Sysco Corp. in Houston, wants rights to The Pizza Maker moniker and filed a petition to cancel O'Brien's trademark. So who's right?

No one yet, pending litigation. After the U.S. Trademark Trial and Appeal Board canceled O'Brien's Pizza Maker trademark last year, he countered by filing a federal lawsuit against Sysco and Allied-Sysco. Despite the lengthy legal battle, O'Brien insists he'll fight to the end. "If I don't win, I lose my company," he says.

Many small businesses have found themselves caught up in similar legal tangles. Consider Dee's Cheesecake Factory in Albuquerque, New Mexico: After years of success, this bakery's founder launched a legal battle after discovering a national corporation using the same name, minus the "Dee's." As a result, both companies retain their respective rights to use the "Cheesecake Factory" name.

"Rights in names or trademarks in the United States arise from use in commerce--not necessarily from registration," says Mark Partridge, a Chicago attorney specializing in trademark and unfair competition law. "[Small businesses] have to understand that just thinking of a name and getting a registration doesn't give you a monopoly." Anybody can file a petition to cancel your trademark if he or she believes you've abandoned it--the exact reasoning behind Allied-Sysco's hot pursuit of O'Brien's Pizza Maker.

To protect yourself, you must actively use your company name and document all business transactions to prove it. Build an identity with your clients; courts often entitle protection if confusion arises from another company using your name. And get a federal trademark by filing an ITU (intent to use) application with the U.S. Patent and Trademark Office; this guarantees nationwide rights prior to use.

To strengthen your strategy, do business in other states. "Your rights are limited to where you do business unless you obtain a federal registration," explains Partridge. "[And remember,] no marks are created equal. Some are weak from the start, and some are strong." Unique names, such as Xerox, offer far more protection than those that just describe what you do, such as The Pizza Maker.

It's a lot to keep in mind, but covering your bases will help you in the end. Says Partridge, "It's not a losing battle if you think about it from the start."

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This article was originally published in the May 1998 print edition of Entrepreneur with the headline: Name Calling.

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