Nonprofits are not immune to the trademark battles that are more commonly associated with for-profit corporations. Nonprofits, like other corporations, benefit from strong branding and may be just as protective of their trademarks. Last week, Clifford Marks’ article "Charity Brawl, Nonprofits Aren’t So Generous When a Name’s at Stake" in the Wall Street Journal wrote about the current legal battles of breast-cancer charity, Susan G. Komen For the Cure, against a number of organizations that have incorporated “for the cure” into their slogan or used its signature pink ribbons. For Komen, it is a matter of responsible stewardship of donor funds. Organizations that have been on the receiving end of similar trademark battles have not always agreed with that argument. Some organizations have been amenable to making the requested changes while other organizations have felt bullied and continue to push back against such requests.
These battles may start and end with a cease and desist letter. However, it can also go much farther than that. Take for example the suit filed in June this year by the Alzheimer’s Foundation of America against the Alzheimer’s Association. Ameet Sachdev reported in his article, "Alzheimer's charities fight over money" in the Chicago Tribune, this dispute actually began back in 2007 when the Foundation alleged that funds from a Virginia woman’s estate intended for the Foundation were mistakenly being sent to and deposited by Association. Superficially, the error may seem minimal to some given that both organizations serve Alzheimer purposes. However, the Foundation’s “mission is to provide care and services to people with dementia and their caregivers” while the Association is “focused on research for a cure.” This could make all the difference when a donor decides where to give.
Additionally, the conflict is not always between nonprofits. Earlier this year, the Star Tribune reported that toymaker LEGO Group sued a Minneapolis nonprofit, Project Lego (Leadership, Empowerment, Growth, Opportunity and Sustainability), alleging trademark violations.
Regardless of which side a party finds itself, everyone seems to lose. Monies that could have gone towards charitable purposes are being used towards legal battles or re-creating an organization to comply with requests; and donors’ loyalty to either organization may be shaken by distracting and costly legal problems or feelings of deceitfulness due to misleading similarities. Thus, trademark confusion can be costly both in dollars and in donors to both organizations.
Public Council explains in its publication, "Trademark Basics for Nonprofits," that a trademark can be a word, a design, both words and a design, or even a scent, color, or sound. This post focuses on word trademarks. The current events surrounding nonprofit trademark battles teach us something about how trademarks are protected and illuminate steps to help avoid donor confusion or legal surprises down the road.
Readily accessible preventative steps in naming or creating a phrase for a nonprofit include:
- Checking the potential words(s) against available databases
- The Secretary of State of each of the states in which the organization is organized and/or operating may provide an online business search.
- The State’s Attorney General may provide an online search of its registered charities database (e.g., in California, the Attorney General’s Registry of Charitable Trusts provides an online registry search of charities).
- The U.S. Patent and Trademark Office provides an online search of registered trademarks.
- Looking up the potential word(s) using a search engine (e.g., Google) – This may help uncover nonregistered trademarks and can also educate the organization on how the name or phrase is otherwise being used by others.
- Checking for domain name availability – If the name is not available, it may be a clue that another entity is using the name while also exposing a potential future roadblock (e.g., should the organization decide to have internet presence through its name or phrase).
Once an organization feels comfortable moving forward with a name or phrase, it raises the question whether to register it as a trademark. Under common law, generally speaking, the first user of a name or phrase within a geographic area is the “owner” of the mark in that area for the particular line of business in which it is being used even without registering it as a trademark. State laws allow for registration for lower costs but fewer protections and rights than federal registration. A registered trademark with the U.S. Patent and Trademark Office broadens the ownership to a nationwide right, and offers more protection and available remedies. Therefore, registration may be an important consideration if the mark is a key ingredient to the organization’s identity or confusion is likely. “As is frequently the case… possession can be nine-tenths of the law when it comes to trademark protection,” DK Holland writes on the Foundation Center website.
Additionally, reaching out to a trademark lawyer may be worth considering. Lori Lesser, a partner with Simpson Thacher & Bartlett LLP, explains in Holland’s article that a lawyer can assist in navigating the many trademark resources as well as legal judgments when the trademarks are similar but not exact. Thus, Lesser states, “Consulting a lawyer at the outset will help organizations avoid spending time and money to develop a trademark — such as by buying domain names, hiring a design firm or creating letterhead — and finding out later that it must be changed."
A follow-up post, "What's in a Name? (Continued)," discusses potential reasons not to register a trademark and is available here.
Information from the Secretary of State about the California trademark application process is available here.
DK Holland’s article “Storytelling and the Brand: A Thousand Words. . . . and Loads of Pictures” on the Foundation Center website also discusses how to build a successful nonprofit brand and can be found here.
Kenneth E. Liu’s article, “Why Should Nonprofits Care About Trademarks?” discusses additional trademark considerations unique to the nonprofit sector and is available here.