Simply Green Products (SGP) has neglected to register its trademark of “SafePac”, which it has been using since 2008. The company hired me, Betty Fuller, as the new Head of Marketing and charged me with the task of preparing its marketing plan. In the course of gathering information for the marketing plan, it was discovered that SafePac had already been registered by another company, Safe Choices, Inc. Safe Choices had registered both SafePack and SafePacs in 2002 – six years before SGP started using the SafePac trademark. This discovery raised a couple of issues that needed addressing before the marketing plan could be developed. The first issue was whether or not SGP could still register SafePac. The second issues was whether or not SGP’s use of SafePac constituted infringement of Safe Choices’ trademark registration.
There is a possibility that SGP might be able to register SafePac as its trademark, but it would take a lot of documentation and legal procedures to get it done. The reason for hope is the fact that SGP and Safe Choices are not competitors. Safe Choices’ product is an emergency weather kit in the form of a backpack, while SPG’s product is biodegradable cartons for packing fruits and vegetables to move them to market. The court has a history of permitting registration of the same trademark for non-competing products (Gerhardt, 2007). If this was the only consideration, then SGP could probably register its trademark and continue with its business. But, there are other, perhaps more serious, issues that make trademark registration less than attractive.
First is the issue of potential consumer confusion. If SGP did register its trademark, it might cause confusion among consumers as to the origin of the products and who is actually providing the products in the market. Since the original intention of trademark registration was to provide protection for consumers so that they did not purchase something carrying the trademark but was not the real product (Gerhardt, 2007), the legal system would likely try to remove anything that might cause consumer confusion, making SGP’s trademark registration unlikely. Even though both companies have been using their trademarks without any apparent consumer confusion to date, drawing attention to the trademark conflict might create potential confusion, which the court would quickly seek to correct.
While a trademark can be considered to be registered through use, if it is not actually registered with the U.S. Patent and Trademark Office (USPTO), it will not have the protections afforded to registered trademarks. Use constitutes ownership, but not federal or state protection against infringement by other companies (“Intellectual Property,” 2015). Safe Choices registered its trademarks with the USPTO in 2002; SGP began using SafePac in 2008 without registration, but it did secure the registration of the Internet domain name, safepac.com. SGP can continue to use SafePac until Safe Choice decides to challenge it as an infringement upon its registered mark SafePacs. While they are not identical, they are close enough to cause potential confusion. In addition, the law stipulates that if a company has been using a registered trademark for five uninterrupted years, the trademark is deemed incontestable (“Intellectual Property, 2015). Presumably, Safe Choices has done this even before SGP began to use SafePac. This seems to be a solid wall of defense against SGP’s successful registration of its trademark.
The Trademark Dilution Revision Act of 2006 (TDRA) finished what the original dilution act started in 1995 – the expansion of trademark protection for the owners of the trademark. While the original aim of registration was consumer protection, over the years corporate lawyers and product managers have complained about the lack of protection for trademark owners. The 1995 act introduced dilution theory into the trademark act, which view the trademark as real property belonging to the owner of the trademark. Any use of the trademark by other companies or organizations can do damage to the trademark and dilute its power and use by the company in its marketing to consumers (Gerhardt, 2007). The TDRA broadened the scope of dilution to include both the blurring of the trademark and the tarnishment of the trademark as the subjects of an infringement claim (Gerhardt, 2007). Consequently, if the USPTO were to grant SGP a trademark on SafePac, it would violate the TDRA because it might blur the consumer’s perceptions of Safe Choices’ trademark, which could cause confusion and diminish the usefulness of Safe Choices’ trademark.
Finally, without knowing it, SGP put itself at risk by registering the domain name of safepac.com. Since SGP did not also register SafePac as a trademark at that time, Safe Choices could accuse SGP of cybersquatting with the domain name with the intent of profiting from its use. The Anticybersquatting Consumer Protection Act (ACPA) is intended to prevent cybersquatting, a term that has come to mean the bad faith, abusive registration and use of a distinctive trademark of another company as an Internet domain name hoping to profit from the goodwill attached to that trademark (Samson, 2005). Should the USPTO grant SGP trademark registration of SafePac, Safe Choices might, especially if any damage is done to its trademark, pursue action against SGP for cybersquatting with the intent to profit from the goodwill attached to the trademark or by intending to sell the rights to the domain name at an exorbitant price. If SGP was found guilty of violating the ACPA, the court could make it forfeit or cancel the domain name or cause SGP to transfer the domain name to Safe Choices (Samson, 2005). This can happen even though SGP had no intention of using the safepac.com domain name for any of these suggested reasons. Unfortunately, SGP could actually be in violation of the ACPA.
Given all of these potential issues and possible outcomes, it would be best, in my opinion, to not attempt to register SafePac as a trademark name for SGP’s product. As it now stands, SGP is using the name as if it were a trademark, and Safe Choices seems not to be the least bit concerned that this has infringed upon its trademarks. While prior usage can be a defense in case Safe Choices does decide to pursue legal action, it will not offer much protection to SGP. However, it is not worth the risk of registering the trademark and informing Safe Choices of this so that it now becomes fully aware of the potential trademark infringement by SGP. Should Safe Choices pursue litigation, the cost in time, money and effort could be draining on the resources of SGP.
In its marketing efforts, SGP should continue to use the SafePac name without drawing a lot of attention to the name. Marketing efforts should be directed toward isolating the product features and benefits that have made the product attractive to users and building the marketing strategy around positioning the product on the basis of its strongest benefit. This should become the reason for the packers to purchase the product, not because of its name. The positioning should reinforce the connection between the product name and the benefit or reason for purchasing it, thus building goodwill for the name without drawing much attention to it. For the present time, any additional discussions concerning the trademark issue should be tabled until a later date.