Legal Issues: This Name's Taken

Trademark laws can help you protect your brand and avoid costly lawsuits.
MedEsthetics April 2018

You might think your business has the greatest name in the world, but if you can’t actually use it, it will do you far more harm than good. This is why it is well worth spending a few thousand dollars upfront to research existing trademarks and secure protection for your brand.

A business’ brand is among its most valuable assets. When patients think of your facility, your practice name and logo are likely the first things that enter their minds. Whether you already operate a practice or medspa or plan to open one, understanding trademark laws can help you protect your brand and avoid costly lawsuits over trademark infringement. Here is a quick primer.

When To Trademark

If you are planning to use a name—other than your own personal name—for your medical practice or medspa, first do a trademark search for that name. For example, if you would like to call your business Effervescence Medical Spa, make sure that name or a similar name is not already in use in the spa, medspa or medical aesthetics industry. The United States Patent and Trademark Office (USPTO) offers a free trademark database search on its website (uspto.gov).

Also, keep in mind that a trademark can be denied—and an existing company can make a claim of infringement—if you choose a name or logo similar enough to an existing brand to create a “likelihood of confusion.”

“Before they hire a graphic designer to develop a logo or business name, businesses should engage an attorney experienced with trademark law to determine whether there may be any conflicts,” says Jim Stanford, a partner at ByrdAdatto, a business and healthcare law firm located in Dallas. “I’ve run into problems so many times where a company spent all sorts of money and resources developing its name and logo, only to find out that there’s a conflicting use out there and they have to change everything.”

If a thorough search of existing trademarks reveals no similar uses, the next step is to apply for a trademark to protect your branding. First, the attorney and the business owner must decide which elements of the brand they need to protect.

“We need to identify the goods and services associated with the trademark to determine what business classifications they fall into, prepare a description of the goods or services and put the application together,” Stanford says. “If the client has a logo or design element in addition to the business name, it’s often advisable to register both through separate applications to obtain broader protection.”

What Can Be Trademarked?

The USPTO does not allow common use terms to be trademarked. These might include “plastic surgery practice” or “skin care center.”

“Pick something that is not descriptive of what you are doing,” says Stanford. “This weakens the ability to get it registered as a trademark. For example, ‘Star Medical Spa and Skin Care Center’ would be a challenge and likely would not get registered as a trademark because it’s descriptive of the services that are associated with the mark and the only nondescriptive element is ‘Star.’”

Coming back to our original example, suppose you want your business to be Effervescence Medical Spa. Assuming no conflicting uses, Stanford recommends that “Effervescence” be the only word in any logo or design mark seeking trademark protection—not the descriptive words “Medical Spa.”

“When you put your sign on your wall or launch your website, you can always use your trademark next to the words ‘medical spa,’ but they should not be part of the trademark itself,” he says.

How Long Does It Take?

Once you have settled on a name and logo design, an application is submitted to the USPTO. “Once the application is finalized, prosecution of the application, that is, seeking registration with the USPTO is a pretty lengthy process,” Stanford says. “We’re not going to hear back for at least four months. From there, if there are any issues or conflicts, we have to address them with the USPTO examining attorney, and there may be some back and forth. From my experience, the quickest a trademark may be registered with the USPTO is probably 9 to 10 months. It typically takes a year or longer, if you don’t have any major issues.”

The total cost of the trademark process from search to clearance can vary significantly from case to case, but generally speaking, it will cost between $2,000 and $3,000. “But it’s much better to spend this money up front than have to deal with potential conflicts or lawsuits in the future,” says Stanford.

Infringement Penalties

Thanks to the internet, it is easy for companies to find businesses that are violating their trademarks—and penalties for trademark or trade name infringement can be severe. “If another party has a trademark registered with the USPTO and your mark is infringing upon it, you could potentially get hit with the other party’s actual damages, a reasonable royalty and damages equal to your profits, even if you didn’t know about the other mark,” Stanford says.

If the courts determine that the infringement was willful, meaning you intentionally tried to fool consumers by using a name or logo similar to that of an established business in the same industry, you can also be hit with additional punitive—or treble—damages. “If your infringement is determined to be willful, it could be a nightmare and it could cost you your business,” says Stanford.

Typically, the party owning the registered trademark will send a cease-and-desist letter, and you will have the opportunity to negotiate a settlement, which may simply involve discontinuing use of the name or logo. Although a settlement is preferable to court, the cost can still be substantial.

“The legal fees in settling that situation could easily be $10,000 to $30,000, depending on how much it goes back and forth,” Stanford says. “In any potential dispute, the legal fees add up very quickly.”

The winner of such disputes tends to be the entity with the deeper pockets, even if they don’t have a legal position that ultimately would be successful in court. “I’ve had matters where I didn’t believe our client was infringing, but the party on the other side had more than enough money to pound our client into the dirt, and we had to concede as our client couldn’t afford or at least justify the legal fees to fight it,” Stanford says.

As the medical aesthetic industry grows, brands expand, and more and more large franchises with a great deal of financial backing spring up, it is simply not smart to operate without properly vetted trademark protection.

Alex R. Thiersch, JD, is a healthcare attorney who represents medspas and aesthetic medical professionals. He is the founder and director of the American Med Spa Association (AmSpa) and a partner at the ByrdAdatto law firm. Contact him at alex@americanmedspa.org.

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