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NAMING YOUR COMPANY

Here Come the Trademark Bullies

A new law makes it easier for big corporations to sue over trademark dilution.
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"A trademark holder's wish list." That's what Eric Goldman, a Santa Clara University professor, calls legislation that President Bush signed in October. The law says that companies with famous trademarks can now sue businesses with similar names "regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury."

This standard is much lower than the previous one, which the Supreme Court set in 2003. In that case, the lingerie retailer Victoria's Secret claimed that its good name had been damaged by Victor's Little Secret, an adult novelty store in Kentucky. The court sided with the store, stating that the chain had to prove actual harm to its brand to prevail. The new lower standard makes it likely that corporations will go after little companies with names resembling their own much more aggressively.


A look at recent lawsuits brought by the big guys

Starbucks Coffee v. Sambuck's Coffee

The Claim: Samantha Lundberg (née Buck) says Starbucks (NASDAQ:SBUX) offered her $10,000 to drop the name Sambuck's from her tiny coffee shop in Astoria, Oregon. When she refused, Starbucks sued her.

The Outcome: In 2005, a federal judge ruled in favor of Starbucks. Though the java giant could have forced Lundberg to pay its legal fees, it let her off the hook.

The Rock and Roll Hall of Fame v. the Jewish Rock and Roll Hall of Fame

The Claim: The Cleveland-based hall argued that a for-profit website co-founded by New Yorker writer Jeffrey Goldberg confused the public.

The Outcome: The home of the "Jew or Not?" quiz, which tests visitors' knowledge of Jewish rock stars, settled the suit last year, changing its name to Jewsrock.org.

The Virgin Group v. Virgin Threads, et al.

The Claim: In 2004, Richard Branson sued a number of websites, including the fashion-related Virgin Threads, for infringing Virgin's trademark and diluting its brand.

The Outcome: Facing an uphill legal battle, Jason Yang, the proprietor of Virgin Threads, settled the case in late 2005. He didn't admit fault, but he gave up the Virgin name.

Last updated: Jan 1, 2007




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