Trademarks in the Outdoor Recreation Industry

By Charles H. Van Gorder

One of a company's most valuable asset can be its own name, or perhaps that of one of its products or an event which it sponsors. Such names can reflect the owner's personality or philosophy, and oftentimes is the result of significant market research. Imagine the plight of entrepreneur Alyx Fier who developed a new patented concept in day packs. After much soul searching, he decided to name his company "Treknology" - reflecting the owner's love of hiking and the advanced design concepts and materials being incorporated into his products.

After several years of showing his product at Outdoor Retailer, advertising in trade journals and making the rounds of regional and national retailers, his packs began to catch on. Orders rose, production increased and it seemed possible there might actually be a positive cash flow. TreknologyTM became recognized in the industry for its innovative new design and high quality packs. Then along came the three-hundred pound gorilla, TrekTM Bicycles, and forced Fier to abandon his then-established company name and begin over again with a new name - True NorthTM - which had to develop its own customer recognition. Alyx Fier's tale is told in more detail below, but this article is intended to show how you might avoid a similar conflict.

Trademark law governs the regulation of company and product names to prevent confusion in the market place. However, the term "trademark" includes more than a name; it includes any word, symbol, or device, or any combination thereof, used to identify a company's goods or services. Trademark protection can even be applied to telephone numbers, Internet web site addresses and sounds. A trademark distinguishes a company or its products from those manufactured or sold by others, and to indicate the source of the product. As illustrated by Alyx Fier's plight, it is important for retailers and manufacturers to take proper steps to minimize future trademark disputes. This advice also applies to companies organizing "events" who want to prevent others from developing competing events with similar names. Whenever a company considers developing a new brand name, it should take adequate steps to be sure no other company has already established rights in the name. While federally registering a mark presents a hurdle for the company with a new name, trademark law protects the holder of trademarks from competitors who attempt to confuse the consumer by producing inferior product with similar names.

The standards for determining if a mark is confusingly similar to another mark include several factors. The first factor is the similarity of the marks themselves (e.g., appearance, phonetics, suggested meaning, etc.). Second is the relationship of the products or services to which the marks are applied (e.g., the similarity of the products or services themselves, whether they are offered through the same commercial channels, whether they are expected to come from the same type of company or source, whether the product or services are such as to attract more discriminating customers, etc.). Third is the strength or distinctiveness of the mark or marks affects likelihood of confusion. A rather imaginative mark made up of less commonly used words or symbols not descriptive of the product (e.g. Yahoo.comTM) would likely be given a broader range of protection than a mark utilizing more commonly used descriptive words or symbols. Finally, the fame of the mark must be considered. A mark which has been highly advertised for a sufficient length of time and has achieved strong public recognition would likely be given a broader range of protection than a more obscure mark.

Possibly the most common point of confusion in trademark law is the overlap of trademarks with corporate names and other business names. As an initial step in forming a corporation, the owner or an attorney will commonly "reserve" a corporate or "trade name" with the proper state office (generally the Secretary of State) so the name is "protected" while the formation of the corporation is completed. Is the client's right to use that trade name adequately protected? Not really. Reserving a trade name will prevent another party from registering that same or a similar trade name in the same state during the interim period, but it would not be an obstacle to someone else adopting the same or a similar name as a trade name, or even as an assumed business name during that same period in another state. Furthermore, the "clearance" given by the state office will not assure that adopting that trade name will be free from trademark infringement problems.

There are two general concerns when adopting a mark. The first is determining the odds of obtaining a federal registration. The second issue is whether the prospective mark is free from any potential infringement problems. A trademark availability search can be conducted on the U.S. Patent & Trademark Office ("USPTO") homepage at www.uspto.gov. However, this database only searches federally applied-for marks and does not search "common law marks". Common law marks are non-registered marks where the use of the mark in specific geographic areas develops exclusive rights to use the mark in those areas.

Federal registration provides exclusive rights to a mark for the goods and services as filed, but these rights are still subject to pre-existing common law rights. This means that earlier common law users can continue to use a similar mark in commerce even though there is a federal registration; however, the common law users can not expand their geographic use of the mark. A second issue may arise when there is a dispute between two similar federal trademark applications where the application having earlier use is dominant. For example, assume party A and B both file applications for federal trademarks for similar marks and specifying similar goods and services. Let us assume B files first and A files second. Even though B filed first, if A is a common law user having earlier use dates of the mark with a national pattern of expansion, A's registration would likely win over B's.

Another issue to consider prior to adopting a mark is to stay clear of adopting a mark that is similar to a famous mark (e.g. Coca ColaTM, KodakTM, Rolls RoyceTM, etc). As mentioned above, trademark law is based upon preventing confusion in the market place. However, under the legal theory of "dilution", a famous mark can prevent use and registrations of similar sounding marks even if these marks have entirely different goods and services.

Given the problems which may arise with similar common law marks, it is highly recommended that a full trademark availability search be conducted prior to adopting a mark. Such a search can be conducted by Thomson and Thomson®. It is easier to change a name of a product line prior to investing money in expenses such as labels and signage as well as developing "good will" associated with the mark. The loss of a trademark and name recognition for a product or company can and has led to financial collapse!

The trademark owner should also take steps to prevent their marks from becoming generic. For example, the terms ESCALATOR and THERMOS were actually trademarks at one time. To help prevent "genericide" with your marks, place the "TM" next to the mark or an "®" symbol when you get a federal registration. Also, make sure third parties print these symbols next to mark as well. This identification is especially important when you are introducing a new product and you want exclusive rights to the name of the line. For example, ROLLER BLADETM (notice my respectful use of the "TM" symbol) must fight constantly to prevent their strong trademark from becoming, through popular usage, generic names for the product of an in-line skate.

Trademark law is designed to protect consumers and retailers by  preventing confusion in the market place. It is important to properly search a prospective mark prior to committing financially (and emotionally) to a name of a product line. Immediate steps should be taken to protect your mark such as filing for a Federal Registration and giving the public notice (e.g. Outdoor RetailerTM) of your marks. Note that registration can be accomplished when there is an intent to use the trademark. Timing can be everything in trademark litigation, and a company that registers an "Intent-To-Use" application only months or weeks before a competing company commences actual use may stand a much better chance of ultimately prevailing.