The Cost of Not Doing a Trademark Search

More than 3,000 trademark infringement lawsuits are filed each year in U.S. district courts. These actions are expensive, as trademark infringement litigation that advances to trial can cost anywhere from $375,000 to $2 million per case. Additionally, if the plaintiff is successful, the average award per mark is $219,739. These immense sums of money can be avoided by following a simple step: conducting a trademark clearance search.

When our firm conducts a trademark clearance search, we provide clients with a full analysis of similar marks in connection with related goods and services. This allows clients to build powerful brands without fearing expensive trademark infringement cases.

Brands are not required to conduct a comprehensive search before filing an application, though it is highly recommended. Without a comprehensive search, another party with prior common law rights could file an objection to your use and registration in the form of a cease-and-desist letter or trademark opposition. Worse yet, they could sue your company for trademark infringement. Ultimately, the costs of a comprehensive search pale in comparison to the costs to re-brand or defend against an infringement claim.

Below are five of the most expensive trademark infringement cases in the U.S., exemplifying exactly why we recommend a trademark clearance search.

Kim Kardashian-West v. Missguided
$2,700,000

Earlier this year, Kim Kardashian-West won $2.7 million in trademark damages from clothing brand Missguided, which was using her name and Instagram handle in their social media posts without her consent. Celebrities often obtain trademarks over their full names, and non-consensual use of those famous names may result in an expensive trademark infringement case.

Tiffany & Co. v. Costco
$8,240,000

Tiffany & Co. alleged that Costco infringed the TIFFANY trademark by selling rings under the name “Tiffany” at its warehouse stores. Costco claimed that it used the mark as a general stylistic term to describe the rings, but the Court held with Tiffany, as the famous mark represents a level of quality that only Tiffany & Co. may offer.

Walmart, Inc. v. Variety Stores, Inc.
$95,500,000

This year, an appellate court awarded $95.5 million in damages to Variety Stores, Inc., because Walmart used its trademark BACKYARD in connection with grills and grilling supplies. Although this is a common term, Variety argued that Walmart infringed on its trademark by using it for backyard equipment substantially similar to Variety’s own products. This is a surprising outcome, as the term “backyard” is frequently used regarding lawn and garden products. Nevertheless, a clearance search would’ve saved Walmart $95.5 million.

Trovan, Ltd. v. Pfizer, Inc.
$143,000,000

In 1999, the giant pharmaceutical company Pfizer was ordered to pay $143 million in damages to Trovan Ltd., for using the plaintiff’s mark TROVAN for an antibiotic. Pfizer claimed that it was unaware of the prior use of the mark, as it did not conduct a trademark clearance search prior to using the mark.

Adidas-America, Inc. v. Payless ShoeSource, Inc.
$305,000,000

The previous case’s amount was topped in 2008, when Adidas sued Payless for the use of their famous three-stripe brand. Indeed, even small decorative features of a product may be trademarked, and Payless could have easily avoided these damages by simply conducting a trademark clearance search.

To avoid falling into infringement cases like these, Vivid IP recommends conducting two levels of trademark clearance. The first step is a preliminary search to eliminate any immediate and obvious obstacles in the form of identical or nearly identical marks in use. If your mark clears the preliminary search, we recommend following up with a comprehensive trademark search to explore not only registered marks, but a full range of unregistered, applied for, common law, or commercially used marks.

The team at Vivid IP is happy to help you clear and protect your valuable trademarks. Contact us at info@vividip.com to learn more! 

Photo by Pepi Stojanovski on Unsplash