Do I need to do a clearance search before I form an LLC?

Updated: Mar 23

By: Trademark Attorney Melissa Ramnauth | Fort Lauderdale

A trademark clearance search can reduce your risk of being sued and having to rebrand your entire business.


Conducting a trademark clearance search is a matter of due diligence. You want to make sure that the mark that you want to use is not already taken. If someone else is using a similar mark, the other person can sue you. The marks do not have to be the exact same to be considered infringement. A lawsuit could force you to pay damages, legal fees, and other costs associated with starting over (a new website, logo, products, advertisements, etc.).


What is a trademark clearance search?


Trademark Definition


Before discussing a clearance search, it is best to understand the meaning of a trademark. A trademark is a brand identifier. In other words, a trademark is a name, logo, or design that allows consumers to associate a product or service with your company.


Some unique trademarks include the Play Doh smell and and the Law and Order sound.


Clearance Search Definition


The trademark process is two steps. First, you should have an attorney conduct a trademark clearance search. Second, you should have an attorney file the trademark application with the United States Patent and Trademark Office.


When should I do a trademark clearance search?


You should have an attorney conduct a trademark clearance search before you start using the trademark. Even if you are already using the mark, you should still have an attorney conduct a search to assess your potential risk of being sued. This also gives you an opportunity to change your mark enough to try and avoid a lawsuit.


In sum, the early the better to conduct a trademark clearance search; and also, better late than never.


What are the benefits of doing a trademark clearance search?


As mentioned above, conducting a trademark clearance search is valuable to your business. A trademark clearance search can reduce your risk of being sued and having to rebrand your entire business.


Investors also place a higher value on companies that have registered trademarks. You never know how quickly your business can expand. For example, the Clubhouse app soared in popularity during the pandemic. The company was valued at millions of dollars, even a billion. However, the executives failed to conduct a clearance search. A prior established app, also named Clubhouse, sued the popular app. The company's valuation dropped immediately.


There are even stories surrounding major sports franchises failing to conduct trademark clearance searches. For example, the Washington Commanders face potential clearance issues with its new name. The Commanders' Classic is seeking registration for a football game between the Army and Air Force. "Commander" is also a prominent term in the clothing industry, including a brand from Duck Dynasty. Thus, the Washington Commanders might face several lawsuits and could even be forced to rebrand if their mark is successfully opposed.


In sum, all companies should conduct a trademark clearance search to assess the risk of potential infringement suits.


If you’re just starting your business, or have been running your business for some time, we would be glad to assist you with trademarks.


Melissa D. Goolsarran Ramnauth, Esq.

MDGR LAW

International Trademark Law Firm

www.mdgrlaw.com/contact

(754) 800-4481

melissa@mdgrlaw.com



To read more about Clubhouse's Trademark Issues, read our prior article: https://www.mdgrlaw.com/post/did-clubhouse-a-4-billion-company-forget-to-apply-for-a-trademark





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