Lawsuits Over Business Names

Big business is where it's at. Not only do mega chains out-profit the little guys, but with legislation signed by President Bush back in October, they now have the power to mow them to the ground in the process.

In his "Intellectual Property" blurb in this month's Inc. Magazine, Ryan McCarthy brings this little fact to light (McCarthy, Ryan. "Here Come the Trademark Bullies." Inc. Jan. 2007: 23.). According to the article, the new legislation makes it easier for big companies to bring lawsuits against smaller ones that have used some form of the big conglomerate's logo for their own business name. In the past, a lawsuit wouldn't stick unless some sort of competitive edge or harm to the big companies business could be proven. Now, none of that matters. In fact, the only reason a company would need to bring a lawsuit would be the fact that another company's logo even slightly resembles theirs.

McCarthy points out two examples of lawsuits that have happened in the past. The first was the case of Victoria's Secret bringing a suit against an adult novelty store in Kentucky called "Victor's Little Secret." This case led the Supreme Court to set the standard that was followed until the newest legislation was signed. Victoria's Secret claimed that damage had been done to their "good name" by the small novelty store. In another case, favor was found with Starbucks who brought suit against a shop owner in Astoria, Oregon who named her business "Sambucks." After she refused to drop the name with a $10,000 offer, they took it to court, and the small business owner lost.

They used to say that imitation was the sincerest form of flattery, but woe is the small business owner who listens to that adage. Now, imitation is the surest way to get yourself in a financial sling. Copyright and other anti-plagiarism laws hold their place in society. As a writer, I'd be very angry if someone was taking my work and changing a few words here and there just to make it their own. However, there's a big difference in someone's personal works and a multi-million dollar company's logo.

Yes, there are creative minds behind such logos and names and I'm sure they were well paid for their work. But does a small local business using a take on words really make that big of a difference in their profits? I doubt it. Starbucks has stores all over the country and a following of coffee drinkers and college students who have no qualms about dropping a few bucks for one of their "gourmet" drinks. One small business owner in one corner of the country is probably lucky to be making an 8th of what the coffee company rakes in, and yet somehow they find it morally okay to sue over something as simple as a name.

I would also understand it if a business really did harm to a company with its less than tasteful use of their name, as in the case of Victoria's Secret and Victor's Little Secret. But did the judge presiding in this case really believe that a little shop in Kentucky made Victoria's Secret sound less than savory to the general population? There are probably a handful of people who've even heard of the adult novelty shop, unlike the lingerie company who plasters advertisements of their items on television and magazines. Did the company and the courts both deem our society so ignorant that they wouldn't know the difference between the two in the first place? I'm sure that most of us get extremely confused when we have to go shopping for lingerie and lube. Thank goodness Victoria's Secret brought a lawsuit or I might still be going around in circles.

The only way I could even justify any of these types of lawsuits or the legislation that makes them easier is with proof that the companies involved in bringing them were only trying to defend their creative genius. Unfortunately, I highly doubt that's the case. It comes down to money and how big business can make more of it. Morals don't seem to hold for much when you have an excuse to take down the competition...any competition...even if they couldn't make more in one year than the bigger company makes in a month. With this type of survival of the fittest being made easier by our government, small businesses better start getting creative and original or they won't stand a chance. Unfortunately, I think it's only a matter of time before the next lawsuit excuse comes along to further push the little guy's chances of business survival into the ground.