STRATEGY

Someone Copied Your Product. What Next?

Taking legal action is costly and time-consuming. Here's how to weigh whether you (really) need to.
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A company is using your trademark without authorization. Someone copied one of your products. As a human being, your first response is to get furious. As an entrepreneur, your inclination is to seek justice. As a business owner, your course of action is to contact a lawyer. 

Taking legal action, however, is both expensive and time-consuming. I have learned the hard way to maximize my company's resources and minimize our losses by carefully weighing the dollars and sense of my legal options. Here's how.

Define the business goal of your legal action.

Thinking about what outcome you need for your business is crucial, because it will help you decide if engaging in legal sparring is necessary, or if there might be another way to solve your problem. In the event that you decide to contact a lawyer, being able to clearly articulate what you need to get from the situation is important in helping your legal team find a strategy that will help you resolve the situation in the way that you'd like. A few years ago, for example, I noticed another company using a very similar brand name to ours on a type of product we did not produce but that was closely related to and in the same industry as our products. I was concerned that the other company's product might be mistaken for something we sell, or that that company would eventually try to branch out into our product types with a similar brand. Rather than litigating the issue in court, our lawyers crafted a coexistence agreement that guaranteed that the other company could use the similar brand name only on the one specific product that was not related to ours. In exchange, we agreed not to use our brand name on a product the other company sold. Had I not been clear with the lawyer that I had limited resources to protect this particular aspect of our business, we might have embarked on a very different and far more costly legal journey.   

Ask for capped legal fees. 

Legal costs add up quickly, and what can appear to be a straightforward case can go on long beyond your expectations. If you have to engage in a protracted session of back and forth, ask your attorney to agree to a capped fee so that you can better anticipate the expense. In addition, ask him to inform you at regular intervals how many hours (and dollars) are accumulating on your case. Being kept informed as you go along can help you budget in the short term and also keep your legal team focused on getting results--without having to edge near bankruptcy.  

Fight only when you have to. 

If there is any way to avoid litigation and still get the business outcome you need, you should take that route instead. If you can focus on business rather than battle, you should. Alter the product that conflicts with another to make it better. Get the story of your brand out via PR instead of legal arguments. Put all your energy into building a different area of your business. If legal action is truly your only option, find ways to compartmentalize the fight so that you can safeguard the rest of your business. As an entrepreneur, chances are you already have your eye on multiple facets of your business. Adding another front, especially one that could be all encompassing, could simply distract you. Take care to insulate the core of your business from a legal battle fallout, in terms of financial drain, time strain, and mental pain.

IMAGE: Keith Brofsky/Getty
Last updated: Sep 20, 2012

VANESSA MERIT NORNBERG | President, Metal Mafia

In 2004, Vanessa Merit Nornberg opened Metal Mafia, a wholesale body and costume jewelry company that sells to more than 5,000 specialty shops and retail chains in 23 countries. Metal Mafia was an Inc. 500 company in 2009.




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