Tread Carefully with Trademarks

Here are some tips when using another company’s trademark (the names or logos used to identify products or services) in your advertising or business.

Don’t mislead consumers when selling reconditioned goods. One company customized Rolex watches by replacing internal elements and adding diamonds. The company sold these as Rolex watches, and the Rolex company sued to stop the sales. The court ruled that because the reconditioning was so severe, it was unfair to call the watches “Rolex.”

Don’t assume you can use trademarks from ratings or awards. Most companies that provide ratings or give awards provide guidelines for the use of their marks in advertising. Some require written permission; some, like Consumers Union, publisher of Consumer Reports, prohibit any use of their trademark in advertisements.

Don’t advertise trademarked ingredients without permission. If you sell homemade candy featuring Grand Marnier liquor, don’t give undue prominence to this (or any other) trademarked ingredient. For example, avoid saying, “Intel Inside” if you assemble computers unless you meet the conditions for use of the Intel trademark, which are posted at the Intel Web site.

Don’t confuse the source when selling complementary or add-on products. The Apple iPod has spawned an industry of products that complement the popular player such as amplifiers, recording devices, and holders. It’s O.K. to state you’re selling an iPod holder, for example, but don’t create the impression that it’s endorsed or sold by Apple.

Don’t assume you can sell trademark parodies. Sometimes it’s permissible to parody a trademark. Parody is imitation that pokes fun at the mark — for example, by selling caps printed with the words, “Mutant of Omaha.” But offensive parodies are often likely to trigger lawsuits.

For example, lawsuits were filed over lewd photos of the Pillsbury Doughboy and of nude Barbie dolls. Although the artist in the case involving Barbie dolls eventually won his claim, it required substantial legal effort and expense. A trademark parody is less likely to run into problems if it doesn’t compete with the trademarked goods and services and doesn’t confuse consumers — that is, if they get the joke and don’t believe the parody product comes from the same source as the trademarked goods.

Richard Stim Author, Whoops I’m in Business: A Crash Course in Business Basics San Francisco

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