Spring is an opportune time to dust off your trademark portfolio and give it a thorough cleaning. Ideally, brand owners should audit their trademark assets on an annual basis with the primary goal of identifying and resolving deficiencies in brand protection. Trademark audits can vary significantly in scope, but here are the most common objectives:
- Take Inventory of Your Trademarks. On a basic level, a trademark audit involves taking inventory of all trademarks currently used by your business, along with the associated goods and services sold under those marks. This is accomplished through a comprehensive review of collateral materials, product packaging, displays, advertisements, websites, social media accounts and the like. A comprehensive inventory should also identify any nontraditional marks that are valuable to your business but may be easily overlooked as protectable, such as “trade dress” (including product packaging or configuration, and even distinctive building exterior and interior designs), sound marks and scent marks.
- Patch the Holes in Your Portfolio. Once inventoried, the company’s trademarks should be compared against its existing applications and registrations to identify any gaps in federal and state protection, for example:
- marks that the company inadvertently failed to register;
- marks that are “under-registered” because the registration is geographically limited and/or the listed goods and services are too narrow;
- descriptive marks that were previously ineligible for federal registration, but have since acquired distinctiveness through five years of use; and
- marks that were not registrable due to blocking marks that have since been canceled.
Armed with this information, you can prepare and file new applications, as needed, to ensure your brands are fully protected.
- Purge Your Unused Registrations. Oftentimes, a trademark audit will reveal trademark registrations that no longer need to be maintained because the marks are no longer in use in connection with the registered goods or services. These registrations can be flagged for cancellation, resulting in future cost-savings for your company.
- Tidy Up Your Trademark Records. When reviewing your registered trademarks, each corresponding record should be reviewed to ensure ownership by the proper entity and a clean chain of title, including the preparation of license agreements and/or proper recordation of any assignments and security interest releases. Inaccuracy in trademark records can negatively impact your ability to use, license, enforce or transfer your trademark assets, and may preclude you from using your trademark assets as collateral in financial transactions.
- Scour Any Unlicensed Uses. Permitting others to use your trademarks without proper quality controls in place can result in damage to your brand and eventual loss of your trademark rights. Thus, a trademark audit should confirm that all trademark uses by others are governed by written license agreements. Importantly, this includes trademark uses by parents, subsidiaries and sister companies in addition to third-party licensees.
- Repair Improper or Missing Symbols. An audit should confirm proper usage of applicable trademark symbols. Federally registered marks should be accompanied by the ® symbol, while unregistered and state registered marks should be accompanied by the ™ symbol for trademarks and SM symbol for service marks. These symbols provide important notice to consumers and competitors, maximize the enforceability of your trademark rights and assist in the recovery of damages in some instances.
- Polish Your Enforcement Program. Trademark owners have a duty to monitor their trademarks and take enforcement action against third-party uses of confusingly similar marks in commerce. Failure to do so will dilute your mark and diminish its value and enforceability. Thus, another important component of a trademark audit is evaluating your company’s trademark enforcement strategies and ensuring that mechanisms are in place to identify infringing activity.
- Watch Services. The most common mechanism to monitor your trademarks is through a third-party watch service, which utilizes proprietary software to scan various records and databases for potentially infringing activity (e.g., conflicting trademark applications, business entity names, domain name registrations, etc.). An audit will help determine what watch services should be added or removed.
- Dilution Search. Whether or not your company utilizes watch services, it’s a good idea to periodically conduct dilution searches on all your major brands. This is usually done by commissioning a third-party search report, which will flag pertinent references from various databases, publications and internet sources. These references are then evaluated for potential enforcement action.
- Google Alerts. A budget-friendly monitoring option is to set up free Google Alerts to notify you whenever your mark appears at a certain ranking in Google search results. You can choose what sources you receive alerts from, how often you receive alerts and which regions and languages you monitor. Once your account is set up, you should designate a team member to review all alerts and notify trademark counsel when you become aware of infringing activity.
Your business is constantly evolving and it’s important for your trademark portfolio to evolve with it. Conducting an audit with the assistance of a trademark attorney will allow you to correct any deficiencies before they become a problem and ensure maximum protection of your valuable trademark assets. The experienced trademark attorneys at Brownstein can assist in designing an audit that is uniquely tailored to your company’s goals and budget. Please contact us for more information.
This document is intended to provide you with general information regarding best practices for trademark portfolio audits. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions.