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Posted at 10:19 AM ET, 07/09/2012

Opinion: U.S. needs to toughen trademark laws to discourage infringement

Melville once said, “It is better to fail in originality than to succeed in imitation.” My question is: Does our government promote policies that enable imitation?

Smith says our trademark laws aren’t strict enough to protect small business owners’ cherished brands (Andrew Harrer - BLOOMBERG)
I am a woman entrepreneur who has been building a brand and niche for years. I have a U.S. trademark for my brand, and most recently found out someone has “knocked off” my concept and name. In speaking with trademark attorneys and doing research on my own, I found this issue to be quite intriguing, as I am amazed at how many companies have to work diligently just to protect their name.

So a trademark grants you legal rights, but it is up to the trademark owners to police and protect their mark from infringement. The first course of action is usually a cease and desist letter, which communicates to the infringer to stop using the mark. There are many of these boilerplate-type letters online, but I recommend having a lawyer write it, as it will indeed carry more weight. 
So what happens if the infringer does not abide and stop? 
This is the point that can be quite confusing for entrepreneurs and small business owners to wrap their heads around. More letters can be sent, and ultimately a lawsuit will usually be filed. So more lawyer fees and more time will be spent just to protect what is yours.
A trademark owner will most likely win a trademark infringement case if the following can be shown: that the unauthorized use of the mark is “likely to cause confusion.” ( Lanham Act).  This is a good standard to go by. Why should an infringer profit from others’ intellectual property and ride the coattails of their good will and value they have build in their brand? 

Most trademark infringement cases also include the claim of trademark dilution or tarnishing of the value in the trademark, and I think this is one of the most important claims to make. In my case, the infringer is producing poor quality products which ultimately result in harming my trademark, reputation and good faith I have established in my brand.

Other claims that may be relevant may include false advertising and deceptive business practices, counterfeiting and unfair competition. Policing your trademark can be quite costly, in both time and money, and many think there is coverage under their business insurance policies. Such coverage is only available to someone who has infringed on others’ trademark, most likely the infringer’s insurance company will pay their legal fees under their advertising injury clause.  
There is no clause to get  legal fees paid for the trademark owner, who has to spend money to protect his mark.  In addition, trademark owners are not guaranteed their legal fees awarded in trademark infringement cases. It is within the court’s discretion  to award attorney fees, and “reasonable”  attorney fees may be granted, but only in an “exceptional case.”
  So it is better to fail in originality than to succeed in imitation. With the rapid increase in entrepreneurship and small business here in the U.S., we need to ensure that our laws help foster innovation and creativity, and help protect and shield from “failings” for unjust reasons. There is immense value in intellectual property, and we need to make sure that the rights afforded in a trademark are more easily protected. 

Faith Smith is founder and president of Eyes Cream Shades, an Irvine, Calif.-based firm that sells sunglasses for children six months and older.

By  |  10:19 AM ET, 07/09/2012

Tags:  small business

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