There is a trademark dispute between national brands Diageo NA and Arcadia Center involving vodka product packaging and claims of consumer confusion. Diagio claims Arcadia’s vodka labels are imitative and confuse consumers. Here are the two vodka bottles.
What is your opinion?
Trademark disputes are costly to companies and can prove to be the death knell of a new brand. The good news is that these situations can be avoided. A thorough trademark clearance search can pre-empt potential infringement issues. A typical trademark search is less than $1,500 (our firm charges $600), however, in the alcoholic beverage industry, it is prudent to undertake a more extensive search that includes searches of alcohol beverage specific resources such as trade publications, and federal and state label registrations. These databases are not free so the cost to access them ranges around $3,000 using a leading supplier. With a legal opinion that reviews the search results, a manufacturer should expect an alcohol beverage trademark search to be around $5,000.
Is it worth it? This is a significant expense, but an investment that is worth it. How much would it cost to rebrand? How much would it cost to defend against a cease and desist letter, an infringement action or trademark battle at the TTAB or federal court? You can certainly avoid the expense of a professional trademark search, but you are accepting a significant risk by doing so. In some sense, a trademark clearance search is like brand insurance. It provides coverage against potential unknown risks. Bottom line – it protects your investment in the brand.
If you are investing more than $100,000 in launching a new brand (consider your legal fees to register brands, label design costs, trademark registration costs, bottling costs, advertising and promotion costs, website and social media expenditures, and your product development costs when calculating your investment). Spending 1% – 5% on a trademark clearance search is a reasonable expenditure for a $100,000 product launch. How would you feel about working hard to launch and sell a new product and then being forced to turn over all of your profits to a competitor? The losses, in addition to the legal fees, could put you out of business.
Hopefully you’ll agree that investing in a brand clearance search is a no-brainer. Not cheap, but a cost of doing business. Hopefully you’ll also agree that this specialized search is not appropriate for a do-it-yourself approach or an on-line trademark service for a low fee. This specialized search requires databases that include information not included in a standard trademark search. The legal analysis also requires industry knowledge and experience. This is a niche specialty but there are several providers than can provide quality services to alcohol beverage manufacturers looking to clear a new brand for the marketplace. As with many things, experience matters. Choose your service provider wisely to maximize return on your investment.