Having been involved in a start-up as an engineer and having worked closely with start-ups as an IP attorney since 2006, I’ve come to realize there are four “pillars” that determine whether a startup will ultimately be successful: Capital, Idea, Team, and Timing. How each of these factors affects a particular venture is ultimately dependent on that particular company. However, it’s clear that if a company fails in any of these categories, your start-up will be winding up quickly, regardless of whether the remaining categories are top-of-class.
The story below is a good lesson related to the “Team” pillar, above. And although this story isn’t about a start-up, it does highlight how a failure within the “Team” can negatively affect your company and ultimately, your bottom line.
Aggressive enforcement of your trademarks is not always a smart move as an outdoor recreation retailer, Backcountry.com, Inc. is learning. As the owner of numerous trademarks that involve the term “backcountry”, the company has been enforcing their marks on other companies that Backcountry.com determined were infringing the company’s rights to the “backcountry” name. Backcountry.com’s enforcement tactics have ranged from sending cease and desist letters, to seeking the cancellation of already registered marks and filing suit in federal court for trademark infringement.
Although these tactics are frequently undertaken by trademark owners, consumers have taken offense to Backcountry.com’s actions in the outdoor industry. Social media soon lit up with the #boycottbackcountry hashtag and urged customers to #scrapethegoat, a reference to removing the company’s goat logo from merchandise. The company has since issued the following apology: https://www.backcountry.com/sc/a-letter-to-our-community. However, many of the company’s claims are still pending. It remains to be seen whether the boycott will continue and how it will affect Backcountry.com’s position in the outdoor industry.
Backcountry.com’s story isn’t just a cautionary tale for companies seeking trademark protection. It’s also a cautionary tale about how your Team (here, Backcountry.com’s legal and marketing teams) needs to understand the company’s relationship with the brand it has established.
Understanding Your Space
In many industries, trademark enforcement goes unnoticed. Most consumers wouldn’t change their purchase habits when large corporations choose to enforce their trademarks against smaller players in the industry. Even in the outdoor industry there hasn’t been any objection to other companies enforcing their marks in a similar manner. So why the backlash here? It appears to be a unique blend of how trademark descriptiveness affected a passionate clientele.
Here, Backcountry.com’s ‘backcountry’ mark describes where their products are frequently used. Having this descriptive quality in their mark creates an association in the mind of the consumer that Backcountry.com’s products must be helpful when that consumer is in his or her backcountry. This works well when the company’s values aligns with the consumer’s. Here, Backcountry.com relied on the fact that everyone has a ‘backcountry’ they can access, in selling their backcountry-branded products. That is, the ‘backcountry’ crosses all geographic boundaries. Comparatively, only people in specific geographic regions have a strong affinity to the regions that Backcountry’s competitors, like Patagonia and Columbia, are associated with. Preventing others from using these names doesn’t create the widespread anger that preventing others from using ‘backcountry’ has created. Backcountry.com also miscalculated the passion that their customers have for their backcountry. Many people who access their local backcountry help protect it by volunteering to keep up its trails, donating to organizations that prevent it from development, and abide by the rules to ensure it’s around for future generations to enjoy in a similar manner. By telling others they can’t use the name backcountry, Backcountry.com is running against the grain, amongst their clientele, that the ‘backcountry’ is available to everyone. This created an adverse reaction in people who are passionate about their backcountry.
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Legal Needs to Understand Marketing
While Backcountry.com’s legal team failed to understand that the benefits Backcountry.com enjoyed from the descriptive nature of their mark were dependent on their customers associating their love of their own ‘backcountry’ with the Backcountry.com products, Backcountry.com’s marketing team appears to have also failed because they didn’t impress this delicate balance on the legal team. Eventually, Backcountry.com’s legal strategy went too far, ultimately affecting their marketing, brand, and company as a whole. At Neugeboren O’Dowd, we’re highly integrated into the business process, aligning ourselves as a Chief Intellectual Property Officer between the legal, executive, operations, and marketing teams, preventing these types of mishaps by understanding how each corporate function can affect the overall brand. When a rift occurs between a company’s public image and boardroom tactics, that disconnect can be disseminated in a prompt manner in today’s world by former loyal customers, gaining traction amongst like-minded individuals.
A Better Approach
Backcountry.com has rights and it could be equally detrimental for them not to enforce those rights. For example, Backcountry.com was the first to use the ‘backcountry’ term in association with many outdoor-related goods and services. Although Backcountry.com should enforce it’s “first in time, first in right”, it shouldn’t be doing so in relation to its customer’s connection with the Backcountry.com products. Given this landscape, suing people in an attempt to maximize brand value for their private equity owners upon exit is not the course to take, less you risk ultimate brand value. To secure the core value of your brand while preventing actual confusion between Backcountry.com’s trademarks and other trademarks, a better approach would be to enter into agreements with these potential infringers to limit, or otherwise control use.
The Problem With Descriptive Marks
What happened with Backcountry.com is partially the result of adopting a descriptive mark. That’s why, from a legal perspective, it’s better to use marks that don’t have any connection with the goods you sell. However, this is always a tug-and-pull between trademark attorneys and the marketing team who frequently want to create an association between the mark and the product or its use.
Related: Is Your Startup Making These Mistakes With Your IP?
The benefit of using less descriptive marks is that, over time, the strength of the mark will become stronger (i.e., you can more easily prevent others from using marks that are similar to non-descriptive marks). It is also possible to create “catchy” marks that are descriptive and can ultimately be cheaper since there are less chances for confusion. Had Backcountry.com been counseled from the start about the potential inability to prevent everyone from using the name backcountry in the outdoor space, they may have chosen a better enforcement route or even a more suggestive mark if their ultimate desire was to control the name for the entire industry.