The Great American Truffle Trademark War of 2015 proved to be short-lived, but, for entrepreneurs of all kinds who are trying to establish a brand, its legacy may linger.
The David v Goliath struggle pitted tiny Boulder, Colorado, chocolatier Piece, Love & Chocolate (14 employees, still “trying to make ends meet”) and Chicago-based Vosges Haut-Chocolat (nine stores in cities like New York and Las Vegas, whose founder has been named Bon Appetit magazine’s food artisan of the year and one of National Geographic’s best chocolatiers of the year, among other honors). The latter has a blog named – you guessed it – Peace Love & Chocolate. True, that blog has only been updated five times in the last two years, but Vosges Haut-Chocolat’s founder, Katrina Markoff, says she has been using the label to brand her chocolate products for about a decade.
Some of Vosges’s customers beg to differ. Among these: Sarah Amorese, founder of the small Boulder chocolate manufacturing and retailer, who occupies a 1,200 square foot store on Pearl Street and makes her own products as well as selling other gourmet brands. “Vosges Haut Chocolat doesn’t use the phrase ‘Peace, Love and Chocolate’ in its name, logo or even advertising,” Amorese pointed out in a heated post on her company’s blog last month, igniting a war of words that pitted chocolate lovers against each other in cyberspace. “It’s simply a phrase your legal team has trademarked as your ‘mission’ and happens to be the URL of your blog.”
Unfortunately there’s nothing “simple” about that, as small business owners probably will learn as a result of the hullabaloo. Indeed, the Great Chocolate Trademark Tussle shows just how vital it is for an entrepreneur to focus not just on protecting his brilliant idea from rivals, but on making sure he isn’t making any avoidable errors that are going to cost him tens or hundreds of thousands of dollars down the road.
“The reality is that most small businesses have limited resources and a lot of irons in the fire,” says Brit Nelson, co-chair of the intellectual property practice group at Locke Lord. One of Nelson’s clients, he says, has ended up as his client because he failed to do a basic search to see if anyone else was using the trademark that he wanted to use for his new business. “He was in a hurry to get his business up and running, to get the contract signed and get the revenue flowing; doing the background checks wasn’t on his radar.” He has since found out that there is another company with the same name, and it has cost him a lot of money (including Nelson’s fees) and several years of goodwill associated with that name. All of which could have been avoided by investing a few hundred dollars up front.
The controversy that followed Vosges’s demand that Amorese cease and desist using the phrase that they had trademarked – and her public and impassioned response to Markoff – involved chocolate, but it proved to be anything but peaceful or lovely. Even fans of Vosges, reading Katrina Markoff’s comments on the chocolate company’s Facebook page, were far from united in their support of the bigger company. “Just the fact that you initiated the legal action in this case will prevent me from ever enjoying your unique products again, which I knew only as Vosges,” commented one (former) fan. “I think it is a bit unfair, as it’s not something I’d ever know your chocolate for,” added another.
When it comes to David v Goliath intellectual property struggles, most of the time, entrepreneurs focus on protecting their ideas from poaching by their bigger rivals. Filing patents is the best-known approach, but it’s far from the only one – and may not even be the best one in every circumstance. If you file a patent, you’re disclosing your trade secret to the public in return for a limited monopoly. You might actually be better off simply keeping it a secret. A common mistake, says Nelson, is that entrepreneurs fail to get their employees, consultants, suppliers and business partners to sign necessary confidentiality and non-disclosure agreements.
Some businesses do try to survive without protecting their trade secrets. A case in point is Huy Fong Foods, whose Vietnamese-born owner, David Tran, never trademarked the term Sriracha sauce, enabling anyone who wants to try to compete with him to launch their own version of the fiery chili condiment.
But that’s the exception. And sometimes, as in the Chocolate Wars, it’s the Goliath who feels hard done by, and the startup who not only needs to guard their own bright ideas, but make sure they don’t jeopardize their future prospects by trespassing on the ideas of others.
Consider North Face, which spent years trying to establish itself as an upscale and, yes, serious brand for affluent consumers. When Jimmy Winkelmann launched his South Butt line of hoodies and other garb (blatantly tweaking North Face’s logo to look like, you guessed it, a butt), the two sides to that trademark dispute eventually reached an out-of-court agreement that enabled Winkelmann to keep selling his products. Apparently viewing this as encouragement, Winkelmann went on to found “Butt Face”, which North Face didn’t respond to any more favorably. In 2012, a Missouri court ordered Winkelmann to shut down his business immediately, stop parodying the company’s products, destroy any stock and fork over $65,000 in damages.
The Chocolate Wars, of course, weren’t a deliberate parody, or even, according to Amorese’s blog post, a deliberate usage of Vosges’s trademark at all. But Nelson says that had the case ended up in court, it might have been tough for the smaller company to prevail. “What’s fair in life doesn’t translate into a legal position,” he says. Spelling the store’s name with “piece” instead of “peace” and an ampersand in place of an “and” isn’t enough to make them distinctive, and under trademark law, that’s the key question, he says. The final ingredient? They’re both selling chocolate.
Vosges Haut-Chocolat registered the domain name for its blog back in 2007. “If you’re opening a business and want to use a company name, doing an internet search, with spelling variations, is a first step,” says Nelson. “And it’s free.” After that, he recommends spending a few hundred dollars to have a trademark attorney run a basic screening search of federal trademarks.
It’s just common sense; if you’re a wannabe entrepreneur, you don’t need the drama, or the expense of getting it wrong. Now that Taylor Swift is trademarking the usage of the lyrics on her latest album, and EL James, author of Fifty Shades of Grey, wants to make sure that you don’t have the right to develop either a teddy bear or a nail polish and call it Inner Goddess, the odds are rising that any great tagline, trademark or company name is going to trip over someone else’s intellectual property.
As for Amorese and Piece, Love & Chocolate, her aggressive PR campaign may have helped her to win the right to keep using her name, even if it is still a Vosges Haut-Chocolat trademark. (After all, no chocolatier of the year wants to look like a big-business bully to her fans.) The two companies did reach a settlement late last month, immediately after Amorese posted her hope that “we want to believe you truly hold peace and love in your heart.” The details are confidential and Amorese’s only comment on the matter, in an email, was: “We’ve settled. That’s it. There’s no more.”
But there will be more. In an age where a simple Google search will check out the competition and the names they are using, guarding your brand and making sure you’re not encroaching on someone else’s has never been easier – or more difficult.
