Small businesses often worry about protecting their intellectual property. Yet, they also hold misconceptions about how to strategically manage their intellectual property. The New York Times recently cited five common misconceptions that small businesses often make concerning their intellectual property. To remain competitive, small business owners need to make smart investments in their intellectual property (IP).
Common Misconceptions
1. It's not worth the time and effort to secure intellectual property rights.
Small business owners often worry that whatever IP they possess is not worth the expense of lawyers. While patents can cost between $10,000 and $50,000+, trademarks are must less expensive to obtain. If you fail to secure appropriate IP rights, your company may face expensive litigation, may be barred from using its chosen name or technology, or may have to pay licensing fees to another company who was diligent in obtaining IP rights. The benefits of obtaining formal IP protection outweigh the costs of doing so. IP protection should be viewed as an upfront investment in the company and be budgeted into any financial plan.
2. Trademarks protect my company's brand.
Brand protection is certainly an important reason for filing a trademark application with the US Patent and Trademark Office. However, you need to make sure that your trademark application covers all the markets that you will foreseeably compete in. This requires a solid understanding of the competitive landscape and your company's strategy, not only now but going forward.
Kogi, a famous lunch truck in Los Angeles, is facing a problem beccause it did not engage in such analysis. Kogi makes Korean style tacos and sells them on its roving food truck. Kogi applied for a US trademark for the term "kogi" (which means meat in Korean) in December 2008. However, the trademark application covered use of the term only for mobile food carts.
Baja Fresh, the chain of Mexican eateries, applied for a US trademark for the term "kogi" in May 2009. Baja Fresh's application covered a wide range of products, including tacos (the "Baja Kogo taco"), burritos, and promotional toys. However, the company is considered revising its application to instead cover the term "gogi," since that may be a more accurate English transliteration.
According to the Wall Street Journal, Kogi co-founder Caroline Shin-Manguera attributes a steep “learning curve” when starting the business for the narrow scope of the trademark application. Now, because of the narrow scope of its trademark application, Kogi may not be able to call its tacos with the moniker as its company name.
Takeaway
This is another example of Legally Informed Strategy, or how business strategy should drive legal strategy.
It's unclear whether Kogi and its attorney discussed the scope of the trademark application before filing it. You should discuss with your attorney the potential market applications of a trademark term before filing the application. Otherwise, you may find that your trademark provides protection only in a narrow market space, thereby constraining your company's growth opportunities. If your attorney understands your business, as well as the principles of competitive analysis, she should be able to advise on the appropriate scope of the trademark application.
Douglas Y. Park
Twitter: @DougYPark
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