"What's in a Name?" Idaho Business Review (June 2008)

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What’s in a name? In the business world, a name can mean a lot of money. For example the name Coca-Cola is worth $67 million and is considered by its president to be the company’s greatest asset.

“Virtually every business, big or small, is coming to understand the importance of intellectual property, such as the business’ name, logo or patent portfolio,” said patent attorney, Peter Midgley of Zarian, Midgley and Johnson, PLLC. “Besides being a major asset to the company, losing intellectual property through lack of legal protection can be a major liability.”

Zarian Midgley is a Boise-based law firm specializing in intellectual property, especially patent law, helping businesses defend their IP. One of their clients, The Helmstar Group, a financial planning company, learned the hard way that losing an already recognized name is expensive.

Three years ago when Ben Boettcher and his business partner started their company, they put all their efforts into marketing the name “Lodestar.” Before adopting their name, the pair searched extensively online for other businesses with similar names. It never occurred to them to check the records at the U.S. Trademark Office.

“We spent thousands of dollars and countless hours producing our signage, designing business cards and had a website and logo designed around the name Lodestar,” said Boettcher.

Shortly after opening their doors patent attorney, Peter Midgley, recommended they search for similar federal trademark registrations. A simple 10-minute search revealed another financial planning company in New Jersey had registered the name Lodestar. Boettcher and his partner were disappointed to learn that the business identity they had worked so hard to develop could be in jeopardy, but they thought it was unlikely that the trademark owner would press the issue against their small firm in Boise, Idaho. They decided to keep the name rather than to go through the long and arduous process of re-creating their brand.

“A year and a half later we got a letter from the original ‘Lodestar’ group telling us we either needed to change our name or we could expect a cease and desist letter,” said Boettcher. “Rather than spending $50,000 to fight it in court, we went back to the drawing board and came up with Helmstar.”

Boettcher said it was a good thing they were found early, rather than a decade down the road when they had already built brand awareness. Midgley said this is a small example of what businesses face every day in protecting their intellectual property and believe that Helmstar will be successful because they took action early.

In 2003, Price Waterhouse Cooper estimated by the year 2007 as much as 90% of the value of the world’s top 2000 enterprises would consist of intellectual property. Midgley said that number is probably a good estimation today and believes the stakes in protecting your intellectual property are higher now than ever before.

“A trend that’s becoming very prevalent is the use of patent holding companies,” said Midgley. “These patent holding companies are diligently looking for anyone infringing on patent rights and approach them for licensing fees or a lawsuit.”

Midgley said the patent holders are much more aggressive than they were in the past and the minefield for being caught is more crowded and actively policed, leaving small businesses vulnerable to a legal explosion.

The other big risk small businesses take is neglecting to obtain patents and trademarks from the beginning. Midgley said those things should be on the same to-do list as accounting and hiring for a new business start up.

“If you’re a restaurant and you start selling alcohol without the appropriate liquor license, the state will graciously remind you that you’re not allowed to do that,” said Midgley. “You’ll also be notified if you fail to obtain workers comp insurance. But there isn’t an agency reminding business owners to register their trademarks, or warning them when they’re letting their patent rights lapse, and those issues can be vitally important to the ultimate success of the business.”

Once a company starts selling a new product or publicly discloses a new invention, there is a limited time to pursue patent protection in the United States, and in many foreign countries, patent protection is no longer an option.

“The company has to offer something that is brand new in order to get the patent. So they can’t offer it to the public first, and then seek a patent later,” said Midgley. Once the product becomes public knowledge, a company can no longer utilize the patent system to stop another business from offering the same product or idea, sending potential business dollars out the window.

And speaking of windows, in 2004, Microsoft settled a trademark infringement lawsuit the company brought against “Lindows, Inc.” in 2001, for an estimated $24 million dollars. In exchange, Lindows changed its name to Linspire and transferred its “Lindows” trademark to Microsoft.

As published in the Idaho Business Review, July 16, 2008, by Brooke Hale-Flake.

Established in 2007, Zarian Midgley (www.zarianmidgley.com) is a boutique law firm specializing in intellectual property matters (especially patent law), intellectual property litigation, and complex business litigation. The firm’s registered patent attorneys, patent agents, and lawyers hold technical degrees in electrical engineering, computer engineering, physics, chemistry, chemical engineering, genetics, molecular and cellular biology, aeronautical engineering, mechanical engineering, and manufacturing engineering. The firm’s objective is to provide the high-quality representation expected of large firms, with greater efficiency.