Getting around clearance conflicts: six in-house share top tips

Baseball team the Cleveland Indians announced in July that it would change its name to the Cleveland Guardians, aggravating a roller derby team with the same name.

The roller derby Cleveland Guardians claimed it had used its name since 2013, registered it in 2017 with the Ohio secretary of state and had a pending federal trademark application. It sued the baseball team in October for trademark infringement.

The plaintiff said the baseball team had contacted it in June, saying that the ‘Cleveland Guardians’ was one of the names it was considering. The roller derby team said the baseball group would have to buy the rights, and that the defendant agreed but made an offer that was too low.

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In November, the two teams resolved the lawsuit and agreed that both parties could go by the same name.

The baseball team’s decision to use the name despite the potential conflict thus worked out well for it in the end. But the lawsuit and the media attention that went with it are the type of thing brands normally want to avoid. 

With a little more caution, brands can find creative ways to use marks they really want without getting sued.

Attorneys at PDC Brands, Ziff Davis, Birkenstock Americas, Clif Bar and two other companies tell Managing IP that their approaches to such conflicts largely depend on the facts of these matters.

They say they would pursue co-existence agreements, consider purchasing trademarks and possibly make arguments that there isn’t any consumer confusion.

But they note that there are times when none of these solutions work and their best bet is to advise their companies simply not to use their dream brands.

Some counsel say they have successfully negotiated co-existence agreements similar to that of the Cleveland Guardians.

Matthew Wagner, general counsel at PDC Brands in Connecticut, says his company recently applied to register a mark in a country outside the US but was rejected on the basis that the name was too similar to a registration belonging to another beauty company.

But his team realised that PDC had co-existed with this other brand in multiple countries for years and never experienced any issues.

PDC contacted the original registrant and negotiated a worldwide co-existence agreement. The company is now pursuing the registration with the co-operation of that business.

Wagner notes that one reason his team could negotiate this agreement was the goods were marketed at different prices, had different channels of trade and had other distinguishing features, which made consumer confusion unlikely.

But sources say that although co-existence agreements can be helpful, they also come with some risks. These contracts may prevent businesses from selling certain types of goods or entering certain jurisdictions.

Laura Altieri, corporate counsel at Clif Bar in California, says counsel such as her should think about the type of products their companies might sell in the future before signing stifling co-existence agreements.

Counsel say they would also consider purchasing marks that would otherwise block their registrations, as the baseball team reportedly did.

Wagner at PDC says his business has done this. The company tried to expand one of its brands to a South American country but was blocked by a business owner with a similar name.

PDC, however, purchased that brand on the basis that it would give the former owner time to phase out use of the name.

But attorneys note that trademark purchases can come with challenges, including quarrels over price when the original trademark owners think their marks are worth more than the buyers are willing to pay.

Companies may be able to negotiate, but they have to decide whether the names are worth the hassle.

Cheryl Wang, associate general counsel at Birkenstock Americas in New York, says she typically wouldn’t advise her company to purchase a brand that it only planned to use in a three-month campaign.

But a purchase might be worthwhile if her company planned to use the term or image for a product that was core to the business.

Counsel add that offers to buy marks often won’t pan out because the original rights holders won’t want to sell.

Julianna Orgel-Eaton, general counsel at online media company Ziff Davis in New York, says rights holders may not want to sell their marks if they have invested a lot of time and money into their branding.

She might be more likely to approach a brand with a purchase offer if a particular name wasn’t being used very often, she says – but even then, she would only do so if the term was extremely important to her company.

Sources say they might also purchase brands if trademark squatters – those who file marks with no intention of using them – register their brands in other jurisdictions.

Counsel can sometimes make convincing arguments that there is no consumer confusion between their marks and pre-existing ones, particularly if the goods and services are different.

They can bolster their arguments if they find ways to further distinguish their brands from those of their competitors.

Orgel-Eaton at Ziff Davis says her company creates distinctive logos or fanciful designs to make its brands stand out.

And the general counsel at a hospitality company says she would consider adding a house mark, such as the name of the company, to a proposed new brand to mitigate any risks of consumer confusion.

Sources say their decisions to use potentially conflicting names may depend on how their businesses plan to use the terms.

The deputy general counsel at a food company says that if a brand she represents only plans to use a potentially problematic term in advertising, it may want to take the risk and use the name. It’s fairly easy to remove such words from advertising materials if there’s an issue, she points out.

But the firm would have to be more cautious if it planned to use a potentially confusing term as a product name because then it could be forced to rebrand if another company sued it.

Sources say it’s important to make sure their businesses understand the risks of using certain marks.

Wang at Birkenstock notes that a team may care a lot about using a name but change its mind once it realises that a conflict with another company could be risky and expensive.

Lawyers may also have to advise their teams not to use certain names if the original rights holders are known for being litigious.

Wagner at PDC Brands says his company’s marketing team once proposed a name that was too similar to Nike’s ‘Just Do It’ trademark.

Wagner says he knew Nike would oppose any marks that were too close to that slogan and that his company wouldn’t be able to negotiate a co-existence agreement. He thus advised the marketing team to move to an alternative.

Though counsel often have no choice but to advise their marketing teams this way, they should also keep their eyes out for times when they could be a little more creative – especially if they were willing to live with the risks.

If they’re careful, they won’t cause as much hullabaloo as the Cleveland Guardians did.