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Monday, July 23, 2018

Red Hen Confusion Is a Trademark Lesson for All

By: Joseph R. Englander

As Printed in The Daily Business Review July 17, 2018

The story of the Little Red Hen is old and familiar. None of the hen’s animal friends would help make the bread. When asked to help, “Not I!” the grammatically correct animals would reply. However, all the animals came around after the hard work was done and it was time to eat. The hen did not share with the latecomers, and ate the bread with her chicks. The story remains a lasting allegory for the benefits of hard work.

However, the story should also serve as a reminder that a person who builds something has to say no to stragglers who come later to reap the hard worker’s rewards. This story has special relevance in the world of trademark law, as illustrated by the commotion currently surrounding the Red Hen restaurant in Washington, D.C. 

Confusion recently reigned among several restaurants named Red Hen when a standalone restaurant was in the news for denying service to Sarah Huckabee Sanders. Other unaffiliated restaurants received invective and social media commentary from potential diners and others, which affected the restaurants’ businesses. The confusion may have been avoided if the first restaurant to use the mark enforced it, and later restaurants sought to clear their intended use of Red Hen before opening.

Building a trademark can be like making bread. Before baking, a baker starts with the right flour to make dough, kneads it and gives it time to proof or develop before baking. Similarly, a trademark for a business starts with a good protectable name. Then the business owner develops goodwill through providing excellent goods or services under the trademark. The goodwill becomes a reputation among buyers over time. A business owner should ensure that no competitors benefit from their hard work and reputation.

The first step in making the bread is selecting the right ingredients. The best starting ingredient for a strong trademark is a coined or arbitrary word. CLOROX and EXXON are coined marks. These words never existed before the companies owning them used them. Arbitrary words would have nothing to do with a product. For example, APRICOT for condominium property management services would be arbitrary. Descriptive terms may be able to become strong marks, but only if they include the ingredient of acquired distinctiveness. While a trademark attorney should recommend a coined or arbitrary mark to a business from the start, it is a business reality that many existing marks rely upon acquired distinctiveness to be protectable.

Acquired distinctiveness, also known as secondary meaning, is the energy (kneading) and time (proofing) the business owner has put into its goods or services under its name. Florida courts consider four factors listed in Conagra v. Singleton, an 11th Circuit decision in 1984, in determining whether a mark has acquired distinctiveness:

  • The length and manner of its use;
  • The nature and extent of advertising and promotion;
  • The efforts made by the owner to promote a conscious connection in the public’s mind between the name and the owner’s product or services; and
  • The extent to which the public actually identifies the name with a product or venture.

With acquired distinctiveness, a descriptive mark becomes protectable against infringers who come later.

However, owning a protectable mark is only part of the recipe. The owner also has to protect it actively. Protecting the mark means making sure that no other business profits from the goodwill established by the original. Notices and cease and desist letters are generally first steps in enforcing a trademark, but in some cases a lawsuit seeking injunctive relief may be necessary. Licensing arrangements with latecomers may evidence both enforcement efforts and the establishment of acquired distinctiveness. Failure to enforce trademark rights leads to laches, a state where the mark owner has waited too long to enforce its claim against an infringer. In other words, the claim has gone stale, like bread. Any protection efforts at all will help ensure that only the mark owner will enjoy the benefits of the mark.

So how might have the present confusion over Red Hen restaurants been avoided? The first Red Hen restaurant could have applied for registration as soon as it decided on the mark with an intent to use application for Trademark Registration at the U.S. Patent and Trademark Office. Registration would have been issued as soon as the restaurant began selling meals, and the restaurant’s trademark claim would have been public at the earliest moment available. Then, the original Red Hen might have engaged a monitoring service to make sure no other restaurants had a confusingly similar name. If another Red Hen surfaced, then the original could state a claim against it.

The latecomer Red Hen restaurants could also have taken action to avoid the situation. They could have done their due diligence before starting their businesses with a trademark clearance. If the later Red Hens had investigated the use of, or “sought to clear,” the name Red Hen before using it, it is likely that they would have chosen another name. Thus, they would have simultaneously avoided confusion and perhaps begun fresh new strong marks of their own. The point of a trademark clearance is to avoid the very confusion that occurred in Washington, D.C. A cleared mark makes for a strong mark.

Joseph R. Englander is a shareholder in Fowler White Burnett’s intellectual property group. His practice includes all types of business intellectual property including patents, trademarks, copyrights, and trade secrets. He can be reached at jenglander@fowler‐white.com.

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