Archive for the ‘Intellectual Property’ Category

Trademark Lessons for Nonprofits

For most of us, when we think of trademarks, we think of iconic brands such as Nike, Coca-Cola, Apple, or McDonald’s—all of which are for-profit businesses.    But what about the Salvation Army, the United Way, or the ubiquitous “Livestrong” bracelet?   Nonprofits, especially in recent years, have started to realized the importance of protecting their intellectual property and using trademarks to distinguish themselves.

Broadly speaking, there are two things all nonprofits should be aware of when it comes to trademarks.   First, nonprofits should make sure that they are not violating anyone else’s trademark rights.   Second, nonprofits should make sure that they are taking proactive measures to protect their own brands, for example, by applying for trademark registration.

Avoiding Trademark Battles

An article last month in the Wall Street Journal provides an overview of some ongoing legal battles involving nonprofit organizations.   For example, the article explains how the breast cancer charity, Susan G. Komen For the Cure has demanded that nonprofits using “for the cure” as part of their slogan or using its signature pink ribbons cease and desist from such activity.

According to a spokesperson for Komen, it is a matter of responsible stewardship of donor funds.    But other nonprofits using names such as “Juggling for a Cure,” “Bark for the Cure,” or “Blondes for the Cure,” might not agree.    It remains to be seen what will come of these disputes, but the takeway point for nonprofits is that it’s important to be careful when choosing a name or slogan for an organization or event.

The following are some resources that nonprofits can use to get a better idea of whether someone else has trademark rights in a particular name or slogan:   The United States Patent and Trademark Office (USPTO) search engine, various state corporations bureaus, internet search engines such as Google, and domain name availability search engines such as Network Solutions.

However, as a “best practices” rule, you should always consult an attorney if you have a specific question about possible trademark infringement.

Protecting Your Brand
Your brand says a lot about you. Whether it’s through your website, marketing materials, or direct experience with your services, your brand is your first point of contact with the public.  In a competitive, high-tech economy, businesses must do everything they can to distinguish themselves. Trademarks and service marks are the most powerful and effective tools businesses can use in meeting this goal.

This is even truer for a nonprofit, for whom goodwill, reputation, and image are its lifeblood.   Branding will often play an integral role in helping your organization advance its message, raise funds, and fulfill its charitable, educational, or religious purpose.
Finally,  it’s important for tax-exempt organizations to remember some unique considerations with respect to trademarks that don’t apply to for-profits.    The following are some examples of IRS-specific rules that raise particular concerns, especially in instances where a nonprofit is generating significant revenue in licensing fees from its trademark(s):

  • UBIT. The IRS levies an “unrelated business income tax” (“UBIT”) on income earned from activities regularly carried on that are not substantially related to the organization’s tax exempt purpose.  Income derived from trademark licensing could, under some circumstances, fall into this category.
  • Joint ventures. When developing licensing or co-branding strategies, nonprofits should be careful to avoid creating a “joint venture” which is regulated by the Internal Revenue Code.
  • Private benefit transactions are those that benefit individuals to the detriment of the tax-exempt organization.  Trademark licensing agreements should be constructed in a way that does not benefit an individual(s) to the detriment of the nonprofit.

Please feel free to contact Elliott & Davis, PC with all of your questions about nonprofit law or trademark law.

We currently offer all of our trademark registration services at affordable flat rates—well below the rates charged by many larger law firms.   Typically, our rate for all-inclusive trademark registration packages is $1100.    Phone consultations are always free, so feel free to call Daniel Corbett directly at 412.434.4911 ext. 25 with any questions about trademark law.

Elliott & Davis is a full service law firm with expertise in the areas of nonprofit law, civil litigation, corporate law, real estate law, estates & trust, immigration law, entertainment law, civil rights law and domestic relations law.  For more information about these or any of our other practice areas, please visit our website at: www.elliott-davis.com.

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LEGO sues Minnesota Nonprofit Over Use of “Legos” Name

In addition to handling various nonprofit matters, our firm has an intellectual property (IP) practice with a particular emphasis on trademark law.   Recent news of a trademark dispute involving LEGO Group, one of the world’s largest toymakers, and a small Minneapolis nonprofit called Project Legos, presents an overlap between nonprofit law and IP.

Elliott & Davis attorney, Daniel Corbett has the latest at his blog, Pittsburgh Trademark Lawyer.