Here is universal advice for all entities looking to create a new commercial or non-commercial brand: conduct a trademark search before launch to avoid a costly and potentially embarrassing mistake.

Trademark rights go beyond similarity of words, letters and symbols to visual, phonetic, auditory and even olfactory similarity. While a typical “knock out” search focuses on the records of pending and registered marks of the U.S. Patent and Trademark Office (“PTO”), if a rebrand is expected to be a major and expensive overhaul, a full search of common law and state registered marks and URLs in all jurisdictions where the mark will be used, domestic and foreign, is advisable. A case nearly 50 years ago involving Arnie Lutzker still resonates today. Had NBC undertaken this preliminary research, it could have saved the company from a costly and embarrassing mistake.

NBC redesigned its logo many times since its 1926 debut before landing on the iconic Peacock. In 1976, NBC decided to replace the Peacock with a geometrically stylized uppercase “N” logo as a key feature of its new corporate identity program. It turned out that NBC’s stylized “N” logo was strikingly similar to the “N” logo of the Nebraska Educational Television Network (Nebraska ETV), which had adopted the mark several years earlier. With Arnie as co-counsel, Nebraska ETV filed suit for trademark infringement to force NBC to stop using the logo in Nebraska and surrounding states. The mark was not registered with the PTO, but Nebraska held common law rights in the logo.

Although NBC reportedly spent millions for the logo design and rebranding, it failed to conduct a trademark search, which could have revealed Nebraska ETV’s mark, designed in-house for a few hundred dollars. The main difference was that NBC’s block letters were clear and see-through while Nebraska ETV’s were in red. With both marks used in television programming, the visuals were too similar and could have caused consumer confusion as to source. In an innovative out-of-court settlement, Nebraska ETV secured state-of-the-art mobile broadcasting equipment worth more than a million dollars rather than money, which would have gone into the state’s treasury for general purposes.

While trademark due diligence was the issue in 1976, today another rebranding mistake happens when a company does not secure and maintain domain name rights related to a new trademark. If a rebrand goes forward without a corresponding domain name search, there is a risk that the domain name is unavailable or prohibitively expensive to obtain. Securing a domain name after the fact can also be costly, as underscored by brand savvy Facebook paying $8.5 million for Fb.com and Tesla paying $11 million for Tesla.com. For brands already registered with the PTO, a less expensive option is a domain cancellation action with ICANN, the international domain registry. At the other end, the State of Maryland let the domain listed on state license plates expire, allowing a casino in the Philippines to acquire it.

Once branding rights are secure, the trademark owner must police its mark to avoid any presumption of abandonment. In addition to filing requisite proofs of continued use with the PTO, taking affirmative action against infringing uses of the mark is imperative.

Lutzker & Lutzker is available to help you navigate the brand protection landscape, including conducting trademark clearance searches, advising as to domain name acquisition and helping maintain your trademarks. For further reading from our website on the topics discussed here, see the following insights and IP Bits & Pieces®: An Update on Strategies to Address Cybersquatting Proactively, How to Protect Your Domain Name Using UDRP Proceedings, Would You Like Your Crab With or Without a Registered Trademark? and our Trademark FAQs.