Secure Your Most Valuable Asset: Your Brand

Invest in the necessary steps for protection

ENT_SafeguardYourBizWhen Homer Bair and his partner, Susan Kreitman, conceptualized a T-shirt and screen-printing venture on a beach in Jamaica, they had little inkling of its potential for international success.  They collaborated with a group of Caribbean artists and, in 1987, created Cooyah Clothing.  The line combined art and fashion with the global appeal of reggae culture.  Headquartered in South Beach, Florida, the store’s success was bolstered by patronage from the late Gianni Versace, Island Records founder, Chris Blackwell, and the area’s global clientele. Soon the brand was spotted on television and in movies, worn by Whitney Houston, Lenny Kravitz, Missy Elliot, and several reggae entertainers. It was distributed in the Bahamas, St. Maarten, Barbados, Germany, the Netherlands, and several African countries.

Despite its cultural origins, Cooyah was a hard sell in Jamaica. To help them break into the local market, Bair’s brother Nigel stepped in.   “He used his connections to clear the product through customs and paid his employees a commission based on the amount of T-shirts sold,” Homer says.

What ensued next was reminiscent of the biblical saga of Cain and Abel. Nigel opened a showroom which became a store. “Before we knew it, he’d opened nine stores,” Homer says. In 2003, Nigel trademarked the Cooyah brand in Jamaica — without his and his partner’s knowledge, according to Homer–knowing it wouldn’t rouse suspicion and under the cover of facilitating the company’s local operations.

James Conley, clinical professor of technology at Northwestern University’s Kellogg School of Management, says this vulnerability is not uncommon in small business.  “Owners must conduct the necessary business hygiene to maintain ownership of their brand and intellectual property.” Herb Williams, a trademark and copyright attorney at Washington, D.C.-based Foley and Lardner, adds that owners “should perform a trademark clearance search to ensure that your “mark” is available, and if it is, register it with the U.S. Patent and Trademark Office.”

Each trademark clearance search can range from $2,000 to $3,000, application filings can range from $500 to $700, and the cost of wrangling with the trademark office, plus attorney fees, is unpredictable.  Most business owners can’t spare the cash or would rather use it toward more immediate needs — a decision, Williams says, that may cost in the long run. He also cautions, “Employees should never work in their name or even your own.  Form an entity, such as a limited liability, and operate under that business name.”

Williams also suggests putting in place employment contracts and non-compete agreements to protect any ideas and techniques that distinguish the business.  “Use a boilerplate contract from a software program and individualize it to fit your business’ environment and requirements,”  Conley says. He also suggests keeping a record that memorializes promises made, even if it unilateral.  “This serves as evidence of intent and backs up an oral agreement.” But with no written agreement in place it was Homer’s word against his brother’s.  “We spent hundreds of thousands of dollars in legal fees fighting for our name and, after 18 years, we didn’t have a leg to stand on.”

Nigel then attempted to trademark Cooyah in the U.S. but failed because Homer had first rights to the company. Williams explains, “Our trademark rights are based on common law usage, meaning priority goes to the first to use the brand, not the first to register.”  Trademark rights are jurisdictional and U.S. rights do not provide rights in Jamaica.  “Every country has its own trademarking scheme that must be followed.”

Now, Homer and his partners have formed a new company, CY Clothing, culled from a Jamaican phrase meaning, “See why we’ve let go yesterday to embrace today.”  The new line reflects their journey and takes them in a greener direction defined by global interconnectedness.  The clothes feature hand-drawn designs and are made of natural bamboo, hemp fabrics, and green-friendly dyes and inks.

If forced to walk away from the business or settle disputes, Williams suggests using caution when referencing the old company and transitioning to the new.  “Overusage of the old name or badmouthing can open the door to legal action,” Bair says. “We’ve learned from our experiences and now we’re unstoppable.”

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