If your agency creates logos, naming, or tag lines as part of your branding work, your contracts should clearly state that the client is responsible for conducting trademark clearance.
Trademark infringement can lead to expensive litigation and damage an agency’s reputation. Also, you can innocently infringe a trademark, so it’s critical that you tell clients up front and be clear in your contracts — you are being paid for your creative work, not to conduct trademark clearance searches.
Let’s look at how this can come up in your agency’s work with clients and why it’s so important to have clarity. We’ll also explore some practical steps you can take to protect your agency and your clients from unwanted or unexpected trademark disputes
Don’t Leave Trademark Questions Open Ended in Contracts
Apple’s apple. Starbucks’ mermaid. Nike’s swoosh and “Just do it.” These are among the most recognizable logos and slogans in the world. And they’re all protected by trademark law.
Trademarks provide two purposes. The first is to protect consumers so they know the source of the goods they are buying. The second, and most important here, is to safeguard your client’s intellectual property.
A trademark is a distinguishing design, symbol, logo or verbal expression that identifies a specific product or service.
Clients may wrongly assume that because an agency creates the concepts, they’re also clearing up any trademark confusion. Operating under that assumption will only invite trouble for both the client and agency. You need to make sure everyone knows the terms on trademark clearance well before the work begins. Your contracts have to explicitly state that clients are responsible for conducting any trademark searches.
Trademark Clauses Offer Protections Beyond the Courtroom
Someone who believes their trademark rights have been infringed won’t usually pursue the agency; they’ll go after the client because they’re the ones who put it out into the world. However, even though your agency isn’t in the spotlight, without protection in your contract, sorting out a trademark dispute is costly, time consuming, and harmful to your image.
That’s because even though you aren’t the one named in the cease and desist letter or the lawsuit,your client will blame you because you created the infringing work. If a client thought it was your responsibility (whether that’s accurate or not), but it wasn’t detailed in your contract, then you can expect they will have unkind things to say about how you run your business.
How to Safeguard Your Agency Against Unexpected Trademark Infringement
Of course you’d like to think that all of the work you do on behalf of your clients is completely, 100 percent original work. Unfortunately that’s not always the case. You might have great ideas, but other people also have great ideas.
Most trademark infringements are unintentional. But unintentionally or unknowingly violating someone’s trademark is not a defense.
Additionally, your work doesn’t have to look exactly like someone else’s to lead to an infringement complaint. You might have produced a logo, name or slogan that looks enough like somebody else’s work to create some confusion. The test applied in these instances is whether a trademark “creates a likelihood of confusion.”
A contract that clearly states your client is responsible for running the trademark clearance protects your agency from being on the hook in this situation.
A Simple First Step on Trademarks
You’re being paid to come up with creative, compelling images, and ideas. You’re not getting paid to run a trademark clearance search, so make sure you have that conversation early on with your clients.
At your kickoff meeting with a new client, consider having a conversation to make sure they know you aren’t guaranteeing trademark clearance. You can handle this by saying some of these:
“I understand why you might think we do trademark searches since we create the work for you. But we don’t and you’re not paying us to provide those services. That’s not part of the scope of this project.”
“Your intellectual property counsel can handle a trademark clearance search for you. We can carve out time for this step and account for it within the project timeline.”
“We always do our best to never copy anything, but we don’t know what we don’t know. Your trademark search covers that.”
Reflecting this in writing is straightforward and typically found in two places. First, the statement of work document should include a simple one-liner that says “no trademark or other clearance services are provided by the Agency.” Second, the service agreement should say “the Deliverables will not, to Agency’s knowledge, violate or infringe any third party’s copyrights, trade secrets, trademarks, or other proprietary rights”.
To further protect yourself, you can have your client sign off with something like this:
Client acknowledges that (i) Agency has not conducted trademark clearance searches with respect to the work listed below, (ii) no representation is made as to whether the work may infringe third-party trademarks, and (iii) Client has elected not to conduct its own trademark clearance searches prior to selecting the work for development into final art.
Stick to What You Do. Leave the Trademark Stuff to the Pros.
The pressure on companies to set themselves apart is already intense in today’s crowded digital landscape. That pressure is driving demand for agencies that can develop compelling, memorable branding. Trademarks play a vital role in that trend.
Your clients are eager to give their brand a boost. Make sure your contract lets them know it’s up to them to establish that their great new look isn’t already out there somewhere. The bottom-line: protect yourself by including trademark exclusion language in your contracts. Be very clear with clients that clearance searches are not a part of your services.
One last thing. If your client is unsure how to take on a trademark clearance search themselves, Matchstick Legal can conduct a trademark knockout search and prepare an analysis for them.