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How to Win a Trademark Battle Against a Goliath
 

By knowing their rights, two small companies made Apple and RIM back down over trademark conflicts. You could do the same.

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When you think of Apple (AAPL) and Research in Motion (RIMM), it’s probably as mismatched competitors. But they share something other than smartphones and tablets. Small companies recently beat out each of them in trademark battles.

It shows that large companies can be arrogant and smaller businesses can get ahead through preparation and working smart, not having a tractor trailer full of cash. But that’s only true if entrepreneurs take the right steps in advance and then sensibly play their advantage.

No Chinese iPad for Apple

A Chinese court ruled against Apple in a trademark dispute with Taiwan-based flat screen display contract manufacturer Shenzhen Proview.

Proview had trademarked the name iPad in a variety of countries in 2000 when it unsuccessfully tried to sell a tablet computer. Some years later, Proview sold its “global trademark” to U.S.-based “IP Application Development” for about $55,000. It might have been a real company, or could have been a shell for Apple.

As someone at Forbes noted, the initials of IP Application Development spell out IPAD. You might wonder if Apple had tried to pull one over on Proview.

It wasn’t the first time that Apple found itself in a trademark dispute. It had to get permission from other companies for both the iPhone and iOS names. Unfortunately for Apple, the Chinese court said that whatever a global trademark might be (trademarks are granted by individual countries), it wasn’t something that held weight in China. Maybe the smaller company smelled something funny and gave itself a dose of insurance.

Proview says that Apple will have to pay $1.6 billion for the right to use the name iPad in China.

Maybe BlackBerry will taste sweeter

Research in Motion has flailed about in the smartphone wars, falling ever further behind. But its latest magic solution—not including the PlayBook tablet, which was supposed to win over the public but now is the subject of a $500 million inventory write-down—has been the upcoming version of the BlackBerry operating system.

A key point has been to say that it was something new, not just a rehash of old and tired products. So RIM needed a name that gave a sense of change but didn’t shut out customers that liked previous products. The new moniker would be BBX.

However, Basis Software out of Albuquerque has used the same name, albeit with a small x at the end, for 26 years in its software systems that now target smartphones (including BlackBerrys) as well as other platforms. A federal judge ordered a temporary injunction and RIM gave up, deciding to call the new operating system BlackBerry 10. Catchy.

Protect yourself

There are some things to learn from both cases:

  • Get protection early on, particularly with trademarks and copyright, which are far less expensive to establish and maintain than patents.
  • Keep an eye on what other companies are doing.
  • If someone wants to buy some IP rights, do research and see whether it’s an ongoing concern or something that has appeared out of nowhere and may be a front for a much bigger company that wants to save licensing fees by seeming small.
  • Consider whether it’s more advantageous to offer ownership of the intellectual property, some sort of licensing arrangement, or if it’s more important for your strategic plans to keep the rights for yourself.
IMAGE: Flickr/d'n'c
Last updated: Dec 8, 2011

ERIK SHERMAN's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.
@ErikSherman




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