Not trademarking can be an Excruciatingly Expensive® and Wildly Annoying® mistake

I was recently talking to a startup that was airing its frustration over Apple’s Tracker Detect app that enables Android users to find nearby, unknown AirTags. The problem? The company TrackerDetect had been spending 2 years building up its SEO and brand recognition for its cybersecurity products. Needless to say, when Apple launches a product and puts it on its website and hundreds of news outlets cover the launch, chances of being found on Google drop precipitously.

The only option TrackerDetect had was to change the name of its company.

“Apple stole our name,” Mira Marcus, who runs PR for the company, said. Which surprised me, because that’s neither how intellectual property nor how theft works. The clincher is that the company actually hadn’t put basic protections in place, such as applying for a trademark for its name.

A trademark application can seem like a really unimportant part of the startup journey — you’re busy building your company, hiring your staff, raising money, working on product and getting press. Spending a couple of grand on a lawyer to put in a trademark registration can feel like a lot of work and money out the window. And it is, if it turns out that you never needed your trademark in any way. On the other hand, having a trademark and not needing it is infinitely more convenient than needing a trademark and not having it.

In the U.S., registering and babysitting the registration through the process can be a lengthy and expensive ordeal. In my experience, working with a lawyer and without a lot of resistance from existing trademark holders typically costs around $1,500. That can be a little less if it’s a very obscure word you are trademarking — and a lot more if someone decides to contest the application. I’ve experienced both — for my company Triggertrap, I ended up trying to register Redshift as a trademark, and the Red camera company sent a battalion of lawyers after me. That turned out to be a five-figure sum of money spent on lawyers and didn’t result in us getting a trademark. I also at some point registered my own name as a trademark in the U.K. (for the dumbest possible reason), in a very narrow class. That was uncontested; I did it myself without a lawyer, and the full cost was around $200. In other words, your mileage may vary.

Trademarkia, one of the big trademark registration services, advertises prices ranging from $400-$800. In my experience, by the time you’ve filed and defended the filing of a trademark, you’re looking at around $1,500. Image Credits: Trademarkia

The trademark itself can also end up being very valuable, as a friend discovered when Facebook launched a product that infringed on their company’s trademarks:

“I can’t tell you exactly how much Facebook ended up paying me,” he told me — and declined to be identified in a story for TechCrunch — “but when the company launched a product that infringed on our trademark, we threatened to sue. For them, the cost of renaming the product would have been astronomical, and so they bought it off us. They gave us enough money that we could postpone our Series A fundraising by six months, is all I’ll say. Best of all, we hadn’t launched yet, so renaming our company turned out to be trivial.”

Sadly, this wasn’t the case for TrackerDetect:

“As a lean, early-stage startup we haven’t applied for a trademark,” Marcus told me. “It wasn’t a top priority for us.”

It’s easy to say in retrospect, of course, but that slip down the priorities ladder ended up causing a lot of trouble. Enough, in fact, that the company had to change its name.

Although TrackerDetect already has customers and claims to have “millions of dollars in revenue,” this week it announced a name change, made necessary by Apple’s product launch. The new name is Reveal Security, “which will hopefully not need to fight a giant like Apple for search engine results,” Marcus notes.

Personally, I hope the company finds great prosperity and success, and I note that, when searching the United States Trademark and Patent Office, I couldn’t find any trademarks for Reveal Security either. I asked the company about the lack of trademark, and it appears it decided not to apply for one, and isn’t going to. It appears that some people never learn their lessons; and if another company chooses to file a trademark or launch a product called Reveal Security, there’s not a lick the company would be able to do about it.

“Frankly, we don’t feel that a court would be able to help,” Marcus said in an email to me. “We feel a trademark would be a waste of time [because] we’d need to go to court and it would take years to correct. Even if we had a trademark it would not be realistic in a digitally transformative environment: By the time we would win in court we would have already dealt with the consequences.”

Of course, the company can run its business however it wants, but I know dozens of lawyers on a contingency basis who would gleefully take on Apple if there’s a chance of a large settlement check at the end of it. Chances are that if you have a valid trademark, Apple would wizard the problem away with a dip into its mighty coffers after a couple of firmly worded letters.

In any case, as you might expect, a name change when your company is already up and running can be fantastically complicated, very expensive and a huge distraction from your core mission. And, of course, it can be easily avoided by getting your trademark applications in as early as possible — and definitely before you do a public launch of the company.

I put ® marks in the headline of this piece, but wish to point out that that was both inaccurate and a dumb joke: Much to my chagrin, I was not, in fact, successful in convincing TechCrunch’s lawyers to register trademarks for Excruciatingly Expensive and Wildly Annoying.