In this episode, hosts Brad and Michael share the story of a physician starting her own wellness practice. While she took many important steps to launch her business, she overlooked a critical early step: conducting a trademark search. This led to a cease and desist letter that threatened her brand and practice just weeks before opening. Tune in to learn how to legally protect your brand, why picking a business name or website alone is not enough, and how proper trademark due diligence can protect your practice.
Listen to the full episode using the player below, or by visiting one of the links below. Contact ByrdAdatto if you have any questions or would like to learn more.
Transcript
*The below transcript has been edited for readability.
Intro: [00:00:00] Welcome to Legal 123s with ByrdAdatto. Legal issues simplified through real client stories and real world experiences, creating simplicity in 3, 2, 1.
Brad: Welcome back to another episode of the Legal 123s with ByrdAdatto. I’m your host, Brad Adatto, with my co-host, Michael Byrd.
Michael: As a business and health care law firm, we meet a lot of interesting people and learn their amazing stories. Brad, this season’s theme is Unintended Consequences. We sometimes find ourselves in a situation that can be traced back to a seemingly inconsequential or unrelated decision.
Brad: Yes, Michael and those who are in TV land will notice that. Once again, we welcome back our series, regular partner Jay Reyero.
Jay: Alright, Brad, before we get started, I’ve got a very important question. Are we in the top 25 podcasts yet?
Brad: Worldwide? No. But for legal sports movie talk, I think we ranked like number one in everyone’s heart.
Michael: Yes. maybe we need to just form some [00:01:00] sort of like polling entity that ranks podcasts.
Brad: I like that. We can start by just calling me and seeing what I think.
Michael: I have a fake trophy. Kind of like all your best lawyer trophies.
Brad: Those are mostly, I mean, they’re made of paper, so thought they’re real.
Michael: Jay, what do you have for us today?
Jay: Yeah, so today’s story actually reminded me of a recent sports saga that had its own kind of little unintended consequence.
Brad: All right, well, for people living in Dallas, the most recent sports saga, they immediately think about a story that was at the midnight trade of Luka from the Mavs to the Lakers. And then the story keeps going with the Mavs somehow receiving the number one pick in the NBA draft. That was a little bit of a sports saga. Is that what you’re referencing?
Michael: Still too soon, Brad.
Brad: Still too soon? Okay.
Jay: Yeah, no, no. Brad I’m actually talking something out west about the Utah Hockey Club, the new expansion team in the NHL.
Brad: Okay. Well, I do like the NHL, [00:02:00] but I’m not familiar with the story. Because we are a sports podcast, highly ranked, hit us with the story.
Jay: All right. So this saga actually had been over the name. So you see, Utah Hockey Club was just a temporary name until a permanent name could be selected. And so what they did is they started with a list of 20 possible names. And as you would imagine, a very good decision. Let’s put it to a fan vote to see what they can come up with because that’s probably going to be a solid decision, and let’s narrow it down to six finalists.
Michael: And there was some controversy because they had thousands of votes from the same place in Dallas, but despite the polling results, they did refuse to name the team, the Utah Brads.
Brad: I know. I was so shocked at the AI compo… I mean, although the “Utah Brad” just, just rolls off your tongue. I don’t know if you’ve thought about that way. All right, we got names going here. Jay, what name made the cut?
Jay: All right, so the six finalists were one, Utah Blizzard, two, Utah Hockey Club, [00:03:00] or Utah HC, the Utah Mammoth, the Utah Outlaws, the Utah Venom, and finally the Utah Yeti. So, I’ll have to ask both of you, which one would you have voted for?
Brad: You know, blizzard is kind of a cool name for a hockey team. I’m all right with that. But I think of like the drink you get from whatever that’s blizzard drink. But if I had a chance to write in, I think the Salt Lake Slap Shots would be pretty good.
Michael: Yep. There’s your dad joke. I lean to the Utah Hockey Club. That sounds cool. Kind of channeling the English Premier League, and the other ones just make no sense.
Jay: Well, I would say. I’d have to vote for the Yetis because what’s more imposing than a big abdominal snowman as a mascot. And actually most people must have thought the same thing because momentum actually built towards the Utah Yetis coming out the winter in the first few rounds of votes.
Michael: I do remember seeing [00:04:00] something on ESPN or something about the Utah Hockey team. I don’t remember hearing them calling it the “Utah Yetis.”
Jay: Yeah. See, that’s where the problem popped up. So while everyone, fans, players were excited about the Yetis, there was a small little problem we’ll just refer to as trademark infringement. You see, when the Hockey Club submitted their trademark application to the U.S. Patent and Trademark Office, or USPTO on the street, it rejected it because of the likelihood of confusion for consumers to all these other companies that had been using that brand name. And a database search actually turned up a number of third party marks registered for use. And one of those was the Yeti Cooler Company.
Michael: Pause for a cheers with my Yeti.
Brad: I have one here too. That’s really weird. I’m sure that the Utah Hockey Club was surprised that Yeti was not happy to learn that someone wanted to use their name. [00:05:00] I mean, I think the argument that Yeti could make is like, think of all the free advertising that we would give, having a sports team use a similar name as this great cup of the Yeti sitting here next to me.
Jay: Brad, the classic free advertising defense. Kind of like fair use. yeah. Maybe if they had agreed to make the mascot come to life cooler, they could have closed the deal, but they didn’t. After all that momentum, it was back to the drawing board, and so they had to see what other possibilities were left. So they narrowed it back down to three to vote on the Utah Wasatch, the Utah Hockey Club, and the Utah Mammoth.
Michael: Well, so Utah Hockey Club was still the current name. and it was one of the original six finalists. And I think, if I remember right, you said the Mammoths were finalists too. Why Wasatch?
Jay: Yeah. So it was a new option that they threw in there. Apparently, it’s named a local mountain range, and it was [00:06:00] going to allow them to use some kind of mythical snow hill creature that was kind of in the form of a Yeti, so go back to that.
Brad: Not a Yeti, but very similar looking to one.
Jay: But it didn’t last long because after the first night of voting, it became clear from the fans that they were not “fans” of that option. My guess is they probably got zero votes or one from someone’s mom. So they actually replaced it with The Outlaws, which was one of the six original finalists.
Brad: And switching down from our sports talk to movie talk. I do love a good Western movie. I’m a fan of The Outlaws. That’s a good name.
Jay: Yeah. Young Guns, Tombstone.
Brad: Exactly.
Michael: Alright. I’m curious, Jay, what name won?
Jay: Yep. So the Utah Hockey Club will now be known as a Utah Mammoth. Apparently mammoth fossils have been found throughout Utah as they thrived in the Utah’s glacial terrain.
Brad: It seems very anti-climatic after all those other names.
Michael: [00:06:00] Not very imposing to be named after a fossil.
Brad: Watch out for the fossil.
Jay: No live mascots there – unless they bring them back.
Michael: So is there any connection whatsoever to today’s story?
Jay: Yeah. So let’s start with today’s story with our character who’s going to be an internal medicine physician out in Utah who’s starting her own wellness practice, and let’s call her Dr. Gretzky.
Brad: I love it. For those who don’t know, Wayne Douglas Gretzky is a Canadian former professional hockey player. He was also a former head coach at one point. Played over 20 seasons in NHL. He was kind of the eighties to the late nineties kind of guy. So for Michael and I, maybe, and the older audience members might remember, he is considered the greatest player in the NHL history. And as such, I’m a big fan of this name, although Dr. Gretzky, she has some big shoes to fill now.
Jay: Well, so she had been working out on the East Coast for [00:08:00] several years, but wanted to return back to her roots and be closer to family. So she decided to relocate on the other side of the country and go back to Utah. And rather than join another practice or a hospital facility, she felt she was ready to take the leap and she wanted to start her own wellness practice.
Michael: Yeah. And for the audience members who have not done this, started a practice before, I don’t want to just bury the weight of that decision. Young doctors who start their own practice tend to be cut from a similar cloth. They have at least some level of adventurous spirit and definitely have a higher level of wrist tolerance than your average doctor, because doctors are not trained on the business of medicine in medical school, so it’s a completely new discipline to venture out into becoming a business owner.
Brad: Yeah. And we as a firm, love working with doctor-preneurs the term of art that we’ve not coined, [00:09:00] but we’ve heard enough times. They get to take their passion for the clinical setting, the patient care, and then they roll it into their entrepreneurial vision about what it could become, so it’s a lot of fun from that perspective.
Jay: Yeah. And Dr. Gretzky was no different. Moved back, started the process to build her practice, and she began by coming up with a name with a vision in mind to, to Brad’s point and forming the practice entity with the state. The name she selected was PulsePoint Wellness.
Michael: Okay. That’s an interesting name. Not immediately drawing a connection to anything. What was her inspiration?
Jay: Well, her passion was surrounding this whole health and wellness, and she had visions of building her brand and logo around a heart logo to kind of follow some kind of healthy heart marketing strategy.
Brad: Alright. Sounds like your typical idea of a health clinic. Did she have a trademark?
Michael: Brad, you throw these big words [00:10:00] out and not back it up. So you’re going to be assigned the vocabulary word for today.
Brad: Well, I would say most our audience members already know, trademark is an intellectual property, also known as, as on the street as IP. It’s an asset or something value that’s intangible creation of the human intellect. Most people, when they hear IP, they think about, as you said, trademark. But for others, there might be examples like copyright or patents. And to receive this protection of the IP, Jay said this earlier, you get it through the federal government, and it’s through the USPTO office or U.S. Patent and Trademark Office. And Michael, you often have said this in other shows or in speeches – you have a great analogy. Oh, strike that. He has an analogy. It’s not great. It’s average. It’s okay. It’s above average maybe when it comes to trademarks. Can you share that?
Michael: Yeah. It’s important to understand. There’s a perception that if you want to protect your name, for those that know about trademarks, that I go get a trademark and that’s that. [00:11:00] And it’s like us lawyers have with all the laws, it’s more nuanced than that. And so, the most important thing to understand when you’re seeking trademark protection is, who was the first to use it. So I used the analogy of something back when Brad was a young lad and then they had the land grab on the east coast, going out west. And they would put a stake in the ground and that would become their land. And it’s the same thing with trademarks. Like, you see a name, you like a name, and you put your stake in the ground for that name. And that is the most important thing. If your first use of that name, then you’re in a better position, even regardless of the trademark application process. [00:12:00] And so, it’s important to be grounded in that and then understand that trademark comes alongside that concept and bolsters those rights that you have.
Jay: Yeah. And so Brad, to answer your question, no, she did not have a trademark, but she was pretty far down the road kind of with her vision. And Michael, this goes to something you guys talked about in prior season. But she had actually been in what you’ve referenced as stealth mode.
Michael: Yes. You are talking about our season 15 building season where we had a trademark episode. Stealth mode means that you’re starting to take steps towards using a mark, even if you’re not active yet. So this could include things like securing your domain names, social media handles to start, and of course, also start putting together content that would be ready to launch when you’re ready to put the stake in the ground.
Brad: Yeah. I started thinking getting back to Dr. Gretzky. I mean, besides us being [00:13:00] the number one podcast for sports legal and movie talk, why did Dr. Gretzky come to us?
Jay: Well, so she knew, she wanted legal counsel to just make sure she was setting everything up correctly and to help her get the necessary paperwork to start seeing patients. And at first, it was just going to be that she didn’t need employment related documents quite yet, it was just going to be her initially while she was small and kind of getting going, getting that patient base built up. But the first order of business really was she was about to secure space. and so our first really to do action item was to review and negotiate the commercial lease.
Michael: This is a common early step in the startup process. You kind of think about the list of things you need to do on the legal end to get your business started up. And at the top of the list is getting your business structure and entities in place so that you have something. But one of the next things is to find that place where you’re going to have your practice.
Jay: Yeah. And so, we negotiate the lease, [00:14:00] secure the space and is pretty common, still had some build out to do. So she was looking at about a six, I guess, month timeframe before she would officially open her doors. So she turned her attention back to the marketing, to realizing that vision, to start getting the word out and even begin developing the sign that was going to go up in the space.
Brad: All right, Jay, so things are going very smoothly so far. She’s found her attorney, you’re helping with the lease, but as our very smart audience knows, this season is Unintended Consequences. So at this point, this show, I think they’re waiting for you to really turn it up or a little notch here and something’s about to happen, right?
Jay: Yes, Brad. So you see about two months before she was ready to open her doors, Dr. Gretzky got an unpleasant surprise in the mail.
Brad: Now going back to if this wasn’t one our podcast, if we’re talking movie talk, it would be in a horror movie, the surprise would be very gruesome. But because we’re going to go back to the real world and the legal world, I’m assuming she might have gotten a nasty letter with very ugly words in it. [00:15:00]
Michael: I’m guessing she accidentally received a bunch of letters from Dallas advocating for the Utah Brad’s hockey team.
Jay: No, no. Those letters ended up buried in the New Mexico landfill where Atari sent the E.T. cartridges. No, for once, Brad was right, Dr. Gretzky got a cease and desist letter from a multi-state hospital system based in South Carolina. Its name was PulsePoint Health System. And his logo contained a heart. The letter indicated that they had a federally protected trademark and demanded that Dr. Gretzky stop using PulsePoint immediately and changed the name first.
Brad: Off, for our audience member who don’t know what Atari is, that was a game system. And yes, there was a terrible game for E.T., which was a movie for audience members who don’t even know that part.
Michael: There’s a very niche audience.
Brad: This is very niche. But going back for if you’re not familiar with it, a cease and desist letter is really a formal notice demanding that an [00:16:00] individual or an entity really stop something that could be hurting or allegedly an actor that could be harming another business or a party. And it can take many different forms. It can come from a court or attorney or some other even third party. And if it’s issued by a court or the government agency, generally speaking, it’s legally binding. You kind of have to stop if it’s sent by an attorney or a third party. It’s not legally binding, but you should take a serious warning because it can lead to legal actions down the road.
Michael: Yeah. And these are emotionally terrifying no matter who it comes from for a business owner to receive. So I’m guessing Dr. Gretzky must have been upset.
Jay: Oh a hundred percent. Absolutely. She had been building towards this brand vision and was already invested emotionally in what she had envisioned, and so the prospect of having to rebrand was just gut-wrenching.
Brad: Yeah. I’m sure she was blindsided with receiving this letter. I mean, you said so close to getting her grand opening. So how did we approach this issue? [00:16:00]
Jay: So first we needed to verify everything that was talked about in the cease and desist. So we wanted to investigate the merits of pulse point health systems claims. Typically, we do two things. We check the USPTO database to confirm if there is a federally registered trademark that exist. And then if not, we determine whether there are any potential arguments that the brand trumps or they could actually coexist.
Michael: Yeah. We mentioned, or I mentioned earlier in the land grab analogy, this idea of first use being so important. Another really important concept is, is there a likelihood of confusion with the use of the mark? So just because they align, is it going to confuse the marketplace? And so it can be relevant from a risk perspective. You get one of these letters when a brand exists in another state. If that brand is only a local mom and pop and they’re going across state lines trying to argue confusion, it’s probably not [00:18:00] going to work.
Brad: Yeah. And so for confusion, that’s like another example. You know, for the record, I have no objection to the Utah Brads being used. I don’t think the likelihood of the confusion of the original real deal, and I’m in Dallas and they’re going to be in Utah, separate state. I don’t think we’re have that much friction, so I’m not going to file any cease and desist letter if they go with that.
Michael: Plus you sent a consent for them to use your image when you sent your vote in.
Brad: How’d you see that? All right, Jay, what did we find?
Jay: Unfortunately we did confirm Pulse Point Health System had the federal registered trademark. but more importantly, it was registered in the same class that Dr. Gretzky would’ve been.
Brad: Yeah. And for our audience members that we’re getting a little detailed here, but it’s important to understand when the USPTO when you apply for something, there are 45 different categories. Yes, I did say 45, not 50 or a hundred, just 45. 34 of those have to do with products, 11 has to do with services. And these categories are known as classes and they used to help kind of track [00:19:00] these many a thousand different marks when they register them. And considering like a word or logo could be working for some class and not for other classes. So you have to be very careful which class you choose. And again, an owner can choose one class or multiple classes to apply to gain proper protection because that’s what your whole reason why you’re doing it when you file it.
Michael: What do you do about Brad being classless?
Brad: That hurt so much.
Michael: I don’t know. I mean.
Brad: I’m going to start crying.
Michael: Okay. Well, when we talked in the prior episode, we’ve used the example of Dove. Everyone knows that brand. It’s well known as a shampoo and soap, but also a popular brand of chocolate, so they can coexist if they have these different classes. Jay, what did all this mean?
Jay: Yeah, I mean, sadly this meant Dr. Gretzky was going to need to pivot, rebrand which was of course both disheartening and disappointing. But it was also a great opportunity for her to revisit why she wanted to start the wellness practice and then come up with a name [00:20:00] with our guidance that was going to be able to exist, but more importantly, obtain that maximum protection we’d want down the road.
Michael: Startup practices are in a tough spot because finances are tight typically. And so the idea of fighting an unexpected fight over the name does not make sense. And so often the lesser of two evils is just a start over.
Brad: Yeah. It’s always bad when the legal vice falls into the lesser two evils. Nobody likes to hear. You have two really undesirable options here, and the end goal is select the one that doesn’t hurt as much or doesn’t cause much damage. So now that we have these two evils, what was the next step helping Dr. Gretzky with her due diligence?
Jay: We had her come up with a few ideas and then we moved to the level one kind of clearance search, Google and USPTO to start the due diligence process to see if those were going to be viable.
Brad: Michael, remind everyone why does that matter?
Michael: Yes. The whole land grab if they’re using name, they have to be first in commerce. [00:21:00] So you have to see, is there somebody else out there that’s going to have a greater right.
Jay: Yep. Exactly. And so once we felt comfortable with one of the options given Dr. Gretzky’s experience, we went ahead and moved to the next step – level two search, where we had a third party service go deep nationwide in a ton of databases around the country and see if there was any use of this trade name.
Brad: Yeah. And the second search is really like the trust but verify portion of it because you can’t just rely on what Google search says, and that’s why the second in depth search is required.
Michael: All right, let’s go to break. And when we come back we can discuss takeaways from Dr. Gretzky’s story.
Access+: Many business owners use legal counsel as a last resort, rather than as a proactive tool that can further their success. Why? For most, it’s the fear of unknown legal costs. ByrdAdatto’s Access+ program makes it possible for you to get the ongoing legal assistance you need for one predictable monthly fee, that gives you unlimited phone and email access to the legal team so [00:22:00] you can receive feedback on legal concerns as they arise. Access+, a smarter, simpler way to access legal services. Find out more, visit byrdadatto.com today.
Brad: Welcome back to Legal 123s with ByrdAdatto. I’m your host, Brad Adatto, with my co-host, Michael Byrd, and series regular, Jay Rojero still with us. Michael, this season our theme is Unintended Consequences.
Michael: Yes, it is, Brad. And I’ve got a question for Jay. I want to explore these Unintended Consequences that Dr. Gretzky experienced.
Jay: Yeah, I mean, Dr. Gretzky’s story was pretty straightforward, but one that happens more often than not. I mean, she had a vision of a name and a brand that she wanted to build towards. She did a lot of the right things. She formed the entity, she secured the domain, all the stealth mode items that Michael you mentioned. And she even began developing the logo with trademarking in mind – so a lot of the great steps. The problem was she skipped the most important one, the very first one. And that’s that level one search. She didn’t check Google, she didn’t [00:23:00] check the USPTO database to see if there was anything out there similar or if there was, she could ask somebody – what does this mean for me?
Brad: Yeah. And for audience members to think about it from this perspective. So back when I was a very young lawyer 200 years ago, not as long as Michael 900 years ago, but I had a MRI client and they had set up this beautiful facility and they had a huge sign. Think about the big sign you see in McDonald’s, so that you could see it from the highway so that you could find their MRI facility. And their sign was, or their name was so similar to one that was like up the road, not even that far. Of course, this is before the Google and everything else existed, that it was like exactly the same. They got a cease and desist letter right before they were about to open. And they were like, oh no, let’s fight it. And we’re like, yeah, they have a trademark, you don’t, they’ve been using it for like 10 years, you’ve been using it for eight seconds. So they had to rebrand everything, including taking that sign down. And when they first [00:24:00] looked into it, it was $20,000. So this is like 25 years ago, but still it’s very expensive for a startup to redo the sign. So they literally just hired some dude to put a blue tarp over it, because they’re like, well, we can’t afford this moment to actually rebrand the giant sign. So that’s how bad it is. And so just understanding like when you’re getting ready to launch, think about your website and all their social medias and the names that you have associated with it. And all of a sudden you now have to stop all of them and rebrand everything.
Michael: Blue Tarp MRI? Well, to your kind of add on to that, there’s also an emotional hit. The doctors have this exciting energy around the name for their business. And then this letter is like letting the air out of a balloon. And it can derail the focus on starting a practice, especially when you start fighting it. You’re now totally distracted from all the things that you would need to be doing to be building a successful practice.
Jay: [00:25:00] I think one of the big traps that people fall into is they get this false sense of security because they go to the state, they form the entity, and states have a similar, you got to have a unique name. And so they get it filed and they get it approved and they think, okay, great. I’m home free. But the problem is, that’s just one state that doesn’t look into anything on the federal level in other states. And so, they have this false sense that, oh, well I registered it with my state, so it should be fine.
Michael: It’s a great point. And it’s even confusing at the state level as to what you have because states have their own rules on name permissions and how they grant them for forming an entity. And so I would say it’s helpful to have a registered name. It’s something but it doesn’t give you some level of protection that people think they have – to your point of being kind of false sense of security.
Jay: And this is not to mention DBAs, which are also very common.
Michael: Okay. Brad, second vocab word. [00:26:00]
Brad: I’m getting hit today. So for those not familiar, DBA means (doing business as), also referenced in many states like Texas, assume name filings. These assume names are – entity conducts business under a name other than the legal name that they file with their state. This generally means the entity’s going to advertise this assumed name or DBA using this name on their business cards, letterhead, signage, anything, website that they have. Anyone who is interested in going this route, understand that, as Michael kind of alluded to, if you’re filing a name, the actual name with the state, you have a little bit more protection than a DBA because DBAs by themselves don’t typically have the same protection that you would have. And obviously filing someone with the USPTO is the ultimate protection. For example, if I formed an entity called 12 Way Camp Street and marketed as the world – and the whole world, my website and everything is Bad Brad’s Beer and Beverage Bar, that would be the DBA. [00:27:00] It would be really cool places now that I’m thinking about – kind of open it up in Utah.
Michael: Supply the Utah Hockey Club, DBA Utah Brads.
Brad: Yes.
Jay: Yeah. So you know, eventually to kind of wrap the, what happened with Dr. Gretzky and her practice, because we worked with her through the entire process, we went through the steps in the order that they did. Even though it was an emotional rollercoaster and she suffered some setbacks, we got her to a place where she had a great brand name, a renewed sense of excitement for this vision. It was able to get trademarked and we had no issues with it. And so for the audience out there, the name was Alpine Vital and Wellness.
Michael: I know Brad’s disappointed.
Brad: My name still goes there.
Jay: DBA Brad.
Michael: All right. Jay, final thoughts.
Jay: Yeah, due diligence goes a long way. You get through excitement, you have these visions and ideas of what it can be, but you really [00:28:00] need to kind of take the first step, do some basic due diligence, go through the process before you get too far down the road and kind of have to turn back around and go the other way.
Brad: Michael, final thoughts?
Michael: Yeah. One thing we didn’t touch on, but it’s related is we have clients who like to collect trademarks, So they have an idea and they’re like, I want to get a trademark on this, and they’ll have a big list. A long time ago, trademarks really carried a lot of value to the business. And so I think there’s still that perception or it’s just they have an idea and they want something to validate it. And again, it’s so important as a final takeaway to not lose sight of, you need to be using it. You need to be the first one to be using it. And so, high volume doesn’t necessarily mean value.
Jay: Yeah. Brad, fair.
Brad: Well, I’m [00:29:00] not following your statement there, Jay. And thank you for joining us apparently. All right, audience members, that’s all the time we have today, but next Wednesday we will be back with Unintended Consequences when Michael and I are together without Jay. And we have another hot sports topic here when we talk about the Unintended Consequence with paying commissions in a medical practice. Thanks again for joining us today. And remember, if you like this episode, please subscribe, make sure to give us a five star rating and share with your friends.
Michael: You can also sign up for the ByrdAdatto newsletter by going to our website at byrdadatto.com.
Outro: ByrdAdatto is providing this podcast as a public service. This podcast is for educational purposes only. This podcast does not constitute legal advice, nor does it establish an attorney-client relationship. Reference to any specific product or entity does not constitute an endorsement or recommendation by ByrdAdatto. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. Please consult with an attorney on [00:30:00] your legal issues.
