The Trademark Reality PE Buyers Need to Understand

John Pickerill (00:00)
It really is supposed to be: are consumers going to be confused? And so that relies

John Pickerill (00:05)
On the consumer perceptions, the services, the mark itself, that whole kind of channels of trade, how all that operates in the marketplace. Are we going to have confusion? I mean, that’s supposed to be the main test, but it’s become more: Is there an easy way to knock this out and then we’ll throw it back on the applicant to try to prove to us why they should allow registration?

Phillip McMillan (00:26)
That’s John Pickerill. He’s a trademark attorney, and before he went to law school, he came up through the agency world, which makes him a rare bridge between the people who build a brand and the counsel

Phillip McMillan (00:36)
Who has to protect it. Here’s why this conversation matters if you’re on the buy side.

Phillip McMillan (00:42)
A lot of sponsors assume that when they acquire a company, they acquire its name. Not always. Registration outcomes at the USPTO have become far less predictable. The pool of names you can actually own keeps shrinking, and most businesses go to market months before they know whether their mark will hold. John walks through what rights you really have while a mark is pending, how a roll-up compounds that risk across a portfolio, and how to tell the difference between a brand in normal limbo and one with a real problem.

This is the conversation to have before you sign the LOI, not after. I’m Phillip McMillan, managing director of CS Brand Group, and this is Buy. Build. Brand.

Phillip McMillan (01:31)
So I’m super excited to introduce to you an old friend of mine. This is John Pickerill. He works with Fredrikson & Byron and is one of the leading attorneys in the United States. John, I’d love to have you introduce yourself, talk a little bit about your role today, and then we’ll get to all the good stuff.

John Pickerill (01:45)
Yeah, sure. I’m John Pickerill. I’m a partner in Fredrikson & Byron’s advertising, trademark, and marketing group. And so we’re kind of a one-stop shop for all those marketing issues that come up. And I do a lot on branding. I work on deals on the IP side of things, primarily the trademark, copyright, those kinds of issues that come up in deals and in everyday life for clients. I find the subject matter really interesting.

Phillip McMillan (02:09)
Appreciate that introduction. And so obviously trademark law has become just absolutely critical in the branding process. And you mentioned kind of your focus on that specifically. Tell me, did you always set out to be a trademark attorney?

John Pickerill (02:24)
Well, no, actually, I graduated with a marketing degree. So I started off in advertising, worked for a few years and then got in at an ad agency up in Minneapolis, and I was there for a little over five years, worked on some really cool brands, some really cool creative, and ran into some problems, some unique legal problems. And we were doing a Super Bowl campaign for Volvo Trucks. We ran into all sorts of cool legal problems, and we had one attorney who said you can’t do this.

We had another attorney who was very creative, saying, well, there’s some risk here, but you could nuance it, you know, maybe add a disclaimer, don’t do that, maybe. And you know, we were able to save the creative. We were able to make the client happy and it was all because of this creative attorney. And it was really the first time the light came on for me that, you know, attorneys can be a very important part of the process, but they can also be creative, they can be helpful.

And that’s really what turned the light on for me about going to law school and pursuing this area of law.

Phillip McMillan (03:23)
I love that. And there’s three words that you don’t typically hear together that you just said: ‘cool legal problems’, right? Like that definitely helps us appreciate the passion that you

John Pickerill (03:29)
Yeah. Yeah.

Phillip McMillan (03:33)
Have behind this because you don’t hear that very often. But it’s true. Like we run into that so often and it does you know, a lot of times it’s no, no, no. And the realities of it are, as we’re going to talk about, there’s a lot of subjectivity to this and I’d love to hear

John Pickerill (03:46)
Mm-hmm.

Phillip McMillan (03:46)
Kind of your experience. That blend that you have, too, of that creative background, you kind of understand the challenge that’s set before PE operators and the firms like ours that support them because you do sometimes have to be creative in finding ways to position a company in a meaningful way on a very crowded landscape.

John Pickerill (04:05)
Yeah, no, I agree. It’s getting more and more difficult to set yourself apart and you really do need to think beyond just the trademark, think holistically about what you’re doing, what other things you can do to set yourself apart, how you can protect those elements. Yeah, it really is, and legal’s just one small part of what you guys are dealing with, and I’m always very cognizant of that and try to remember what was helpful to me from an attorney when I was in your seat and try to bring that practical perspective to it, because yeah, there are a lot of moving parts.

Yeah.

Phillip McMillan (04:38)
Yeah, I mean make that real because you really do have a dual lens. How does that practicality and understanding of that translate to better outcomes for your clients?

John Pickerill (04:49)
Well, I do think I have that practical perspective that you know, the legal side is rarely perfectly clean anymore. And so just giving those percentages and giving those, you know, sometimes you got to roll the dice, I think. And a lot of times the legal risk is worth the business reward. And so I, you know, I never feel like my job is to say yes or no. It’s just to lay out okay, here’s some risks, here’s what we can do to minimize that risk.

Now, if you want less risk, you could do this. But so I always feel like it’s giving options, trying to give creative options that maintain the integrity of the brand and the creativity and then work with the business people on: How can we execute this? Which direction do you want to go? And then, from there, how can legal help make that happen?

Phillip McMillan (05:31)
Yeah, you know, I don’t know what your experience is—obviously you do this a lot more than I do—but it seems like even in the last few years, it’s become increasingly difficult to predict outcomes with trademark. Are you seeing the same thing?

John Pickerill (05:47)
Yeah. It’s become a crapshoot. It’s gotten difficult to really provide advice up front to clients about registrability because the process is really subjective and they’ve tightened things up in the past few years to make it more difficult to register marks. Now, on their side of things, you know, there’s a lot of fraud going on. There are a lot of people who were trying to get cute with the trademark process, and so the trademark office is like, look, we need to maintain the integrity of the registrations, make sure people are really using those things.

So it’s become frustrating, but I can see why it’s happened the way it is. But you know, we get new examiners all the time who have to get up to speed and you know, in some situations they don’t necessarily see the marketplace or the big picture. They try to treat these things as black and white. Well, here’s a mark, but you know, when you look at the nuances of the services, they might be different, but they’re quick to say, okay, from a legal standpoint, this description sounds a lot like this one, so we’re going to refuse it.

So they aren’t always looking at the marketplace factors that really govern trademark law in the real world and a lot of times using legal fictions and evidentiary shortcuts to refuse marks that are perfectly fine in the real world. So yeah, it’s become more and more difficult.

Phillip McMillan (07:05)
Yeah, we’ve seen that too. Just, you know, in case somebody hasn’t been through this process recently, and I know this is a bit of a loaded question because there’s so many factors, but in general, what should be the standard that the trademark office considers whenever they determine whether a mark has the potential to be registered or not?

John Pickerill (07:23)
Well it’s supposed to be likelihood of consumer confusion and you know they still say that, but you know they are limited by what’s in the actual application. So if you know some of these registrations go back 20, 30, 100 years I’ve seen some that old, and back then, you know, they weren’t as tight. So somebody could get a registration with financial services or something very broad. Then you look at that, you file something today in some very specific area that has nothing to do with what they’re actually doing, but because they’ve got an overbroad registration, it can squeeze you out.

So, you know, I do wish there’d be a little more real-world connection with the process to where they’re taking a look at what these registrants are actually doing, but again, that’s a lot to ask these examiners to drill down and try to figure it out. But it really is supposed to be: are consumers going to be confused? And so that relies on the consumer perceptions, the services, the mark itself, that whole kind of channels of trade, how all that operates in the marketplace.

Are we going to have confusion? I mean, that’s supposed to be the main test, but it’s become more, all right, is there kind of an easy way to knock this out and then we’ll throw it back on the applicant to try to prove to us why they should allow registration? And so, you know, that likelihood of consumer confusion is not necessarily always there. It’s more like is there a possibility for confusion or is there a theoretical chance that someone might be confused?

They seem to have kind of changed the target on us there.

Phillip McMillan (08:57)
And that’s where I guess a lot of the creativity comes in, right? Because it’s being able to predict that and having those responses ready and knowing how you can kind of argue that confusion doesn’t exist, right? Whether it’s the customer type or the overlap in services or the lack of overlap in services in this case or whatever, you kind of have to have that locked and loaded before you proceed. And of course, a lot of times companies need to know: how long does it take, in many cases, to even get a response from the trademark office right now?

John Pickerill (09:25)
Yeah, it’s taken about eight months. I mean, they’re still backed up, so it’s a while before you know even the initial feedback. And at that point, you know, you have opportunities to argue against it and to plead your case, but yeah, it takes even eight months to know what mountain you got to climb here with these things. But as you said, it is strategic filing up front. You can really put yourself in a better position by being strategic, knowing the landscape of what you got to deal with, and then you know that description that you use in the application is very important because you want to frame your services in the best way possible to avoid problems with other marks that are out there.

You know, it’s always a bit of a game because you want as broad rights as you can, but you don’t want to automatically create a problem for yourself. So there is some art in how that gets done. It’s not just a cut and dried process there.

Phillip McMillan (10:21)
Yeah, and of course, you know, not to make it more complicated, but it really does. The US has a bit of a different standard when it comes to trademark protection, right? So it’s not just what’s already been filed in the trademark office, is it?

John Pickerill (10:35)
Right, yeah, no. The US has some of the most restrictive trademark rules and procedures. We actually have this use-based component that most countries don’t have. And we do require, and I think it’s right. I mean, you can register broadly, but down the process you have to be able to show that you’re using it, and you are supposed to be using your mark with everything that’s in that registration. Now people don’t always do that, and one problem we have is foreign registrations in these countries they can just blindly register.

There’s no use component. So they can register in very broad categories of goods and then they can basically just transfer that registration into the US for the first five years. They don’t have a use requirement like US companies do for the first five years. After that they have to start proving use. And so that creates problems too because we’ve got these registrations from other countries where they aren’t using it with this long list of goods and services, but it still blocks our applications and registrations.

So yeah there are some pitfalls particularly for US companies that you don’t find in foreign countries. And a lot of the foreign companies don’t have to deal with it as much.

Phillip McMillan (11:51)
I didn’t even know about that five year exception for foreign trademarks. That’s really interesting. That’s something I could see. A lot of times, you know, in the marketing world, we talk about domains and domain squatters, but it seems like we’re running into trademark squatters too, right? They’re filing and maybe waiting to see, and there are so many filings that it’s really creating a lot of noise. But there’s an added component. You talked about use, but if we take a step back from the trademark office itself.

In the court of law, they also enforce common law usage, right? So it’s also who used

John Pickerill (12:21)
Mm-hmm.

Phillip McMillan (12:22)
The name first, whether or not there’s a registration, correct?

John Pickerill (12:26)
Right, there is that whole element, you know, registration in the US, yeah, we have a use-based system. So if somebody was using it before you file, even if you get that registration, their rights would be grandfathered in. You can’t force them off that. And they would have a basis for canceling your registration, at least in the first initial five years or so that you have that. So yeah, these common law rights can be enforced. They can be a thorn in the side of a big company looking to register and looking to expand.

And so you can’t just look at the trademark office records like you can in other countries generally. Yeah, you have to drill down and make sure you know what’s going on in the States and also what’s going on just in the marketplace.

Phillip McMillan (13:08)
So let’s walk through that. Let’s just say that there’s a platform brand that’s being developed that’s going to be a roll-up or a consolidation of maybe let’s just pick it, electrical contractors, right? So does that mean that the burden is on the team and by extension your team to determine if there’s a name that’s going to be used, that there would be no consumer confusion in any of the markets that they would be possibly entering with that name?

John Pickerill (13:37)
Right. Yeah, we you know, we’ll run searches to look not just can we register this, but can it be used safely? You know, how much risk are we going to have in the marketplace? And a lot of times it’s okay, can we buy somebody out? Can we you know, but yeah, you’ve got to take a look at the market areas where you intend to go and see is there use? Is there going to be an issue we’ve got to deal with? And then you got to figure out, all right, how are we going to deal with this?

What’s our strategy here? So yeah, the due diligence on that sort of thing in the US is a little more aggressive than it needs to be in other countries.

Phillip McMillan (14:11)
And you know, because of that, I think sometimes, you know, when we go through an exercise, there’s always, you know, and some clients have more of a tolerance for this than others, but you do kind of look at made up names and say, well, you know, if we could just come up with some word that sort of makes sense and we use that, then nobody else out there has it. And the pushback we often get from our clients is, well, that sounds like a drug.

It sounds like a pharmaceutical, you know, brand or something like that. But I guess that’s the reason why, right? A lot of the pharmaceutical companies are doing this so they can avoid any kind of trademark issue.

John Pickerill (14:43)
Actually, the FDA requires, you know, a lot of these marks come out of a name generator that generates made up names because you know it’s so crucial that people can tell the difference between drugs, and so they need these marks to be very distinctive. And yeah, that same principle applies in every market area. You know, the more distinctive your mark is, the better it is from a legal standpoint. Now I know clients often say, well I want consumers to know what my product or service does a little bit and I want to describe it to some degree, but you know once you get into those descriptive terms you start to butt up against others.

It becomes more difficult to protect something that isn’t completely distinctive. So yeah those are all factors we like to talk about when people are branding and when they’re in that ideation stage.

Phillip McMillan (15:33)
Yeah, and there is, I think one of the things we often run into, and I’m sure you can do a lot better job of explaining it than I do, but you know, a lot of times if let’s just go back to that example of an electrical contracting company, you know, a lot of times we’ll present a name, and of course, what does the client do? They immediately Google it and they’re like, Well, there is this retail store that has that same name.

So how can we do that? So can two names exist in the broader marketplace that are identical if they’re different products or services or customers?

John Pickerill (16:07)
Yeah, you know, it comes back to consumer confusion, likely confusion. So it’s kind of well it’s interesting to me, but trademark law really is a right consumers have to avoid confusion in the marketplace. It’s not really supposed to be a property right to the trademark user. Now there has been some, sorry, my lights go off. There has been some you know, overlap now where there are some property right aspects to it, but generally that’s where it comes from: consumers being able to tell one product from the other based on this symbol being used.

And so if you’re in different marketplaces, that confusion isn’t going to happen because consumers aren’t going to think you know, Delta Faucets all of a sudden started offering an airline or vice versa. And so these two marks can be used by different companies as long as the goods or services, or target audiences in some cases, are different enough.

Phillip McMillan (17:01)
Yeah, and that’s why it’s so important, you know, we spend a lot of time up front with the clients, even before we go through naming, being sure that they can accurately describe exactly what they’re going to be offering, because that is the standard, right? That we have to compare it to. And if there’s zero chance of overlap, then it’s very possible we could have a coexisting trademark if there are different classes. But if there is potential overlap, even in the future through acquisitions or whatever, that’s something we have to map out and really understand.

So we have to look ahead of the curve too. And be sure that they’re not going to be entering any of those markets down the road that could cause confusion because that could just create a whole other can of worms months or years later.

John Pickerill (17:35)
Right. Yeah, it is. And one strategy people will use is to contact people who might be in somewhat similar market spaces and enter into coexistence agreements where it’s, you know, you’re going to stay here, I’m going to stay here, we’ll work together if there’s any confusion. And that really not only does that make sure there’s no problems down the line, but it also will insulate you from, you know, if two people are using a mark in one area, nothing stops a third from doing it as well.

And so if you have a coexistence agreement in place, you know, that insulates you from a third-party claim, claiming, you know, here’s a crowded field that I can enter, say, no, we’ve got an agreement to make sure this isn’t happening and we can prevent you from jumping in the fray. So yeah, those considerations, there’s ways to deal with them, but you have to put those considerations in up front or else yeah you can have big problems down the line.

Phillip McMillan (18:26)
So, you know, in some cases there’s especially in the PE world, because, you know, you kind of touched on this earlier, they want people to know what the platform is in a lot of cases, right? If it’s in, you know, if it’s a spreadsheet analysis tool, you know, they want to call it spreadsheet analysis or you know, things like is

John Pickerill (18:42)
Yeah, right.

Phillip McMillan (18:44)
Is that a viable path? Like what risk do you enter when you go so generic that you can’t protect the name? What additional challenges does that present to a business?

John Pickerill (18:56)
Yeah, and generic marks can’t be protected. So if it’s actually a generic term, you know, you’ll have trouble ever trying to enforce that. And the trademark office, they’ve become more and more aggressive about calling things generic even when they aren’t. So you can have trouble at the registration side too. But yeah, you set yourself up for that. If you have a descriptive mark, you just know you’re going to have a tougher road. Descriptive marks can become very you know very strong trademarks if you use them long enough.

And I always think of McDonald’s. You know, initially surnames are descriptive. So anyone with the last name McDonald could open a restaurant. But now that that’s clicked, you know, in consumer heads that know McDonald’s is this specific burger chain, it’s now one of the most enforceable, strongest marks in the world. So that can happen, but you know, up front. You’ve got to do your diligence. You’ve got to keep people off of using that. You’ve got to build so much equity in consumer minds that they no longer see those as descriptive terms, but see them as a source indicator, a trademark for a specific source.

So yeah, you know, unlike truly arbitrary terms or fanciful terms that you make up, they’re inherently distinctive. They can be protected right out of the chute very strongly. These descriptive marks, now you can register them, but they go through a different, supplemental path. And so initially they don’t even get the presumption of nationwide rights until you’ve used it long enough and can prove up it’s acquired this secondary trademark meaning. So you do add some hurdles if you want to have these descriptive terms.

I—

John Pickerill (20:34)
Would tell you an interesting story. Now, I give this speech to a lot of clients, you know, and try to tell them, encourage them to use more distinctive terms, crazier trademarks and stuff. And I was talking to a client, a medical device manufacturer once, and one of the guys stood up and said, you know, our products only have a two-year shelf life, and we need people, we need doctors and hospitals to know exactly what these are. And then after two years, they cycle out and we have new technology.

And I thought, yeah, that then descriptive marks are perfect in that situation. But you know, if you want a term that’s going to build long-term equity in it, you know, the more distinctive the better.

Phillip McMillan (21:11)
Right. And there is value that’s perceived in that, especially in our world with private equity. Like they need to build an identity that they can sell and that has a runway for the next buyer, right? So I think it is an important factor. And now you talked a little bit about descriptive marks. The other thing we run into a lot of times is let’s just say that we like the name widget, but there’s already a widget company out there that has some overlap.

Can we just call ourselves Widget solutions or widget services? Does that fix the problem?

John Pickerill (21:39)
No, usually, you know, when you’re comparing marks, you look for what’s dominant. What are the dominant terms and elements of that mark and terms like ‘solutions’ or ‘company’, they aren’t considered to have trademark source indicating power. So it’s not a side-by-side comparison for literal differences. It’s more kind of, you know, how would consumers take that away? You know, if they hear a term two weeks ago and now they’re trying to recall it, they’re not going to distinguish between Widget solutions and widget.

So usually those additional terms are completely dismissed in trademark analysis. Now, in some cases, depending on the overlap in services, you might be able to add another distinctive term to it, you know. Widget, I don’t know. Widget Rabbit, Widget Anything. And

Phillip McMillan (22:29)
Right, right.

John Pickerill (22:29)
That might be enough. But yeah, it’s a case-by-case basis, but a term like solutions isn’t going to save the day for you.

Phillip McMillan (22:37)
Yeah, that makes sense. So just kind of along those lines, what is the most common trademark mistake you see when you get pulled into a deal midstream? What mistake do you see over and over again that if you could have one, you know, public service announcement, this would be it when it comes to trademark law especially for private equity and their portfolio companies?

John Pickerill (22:55)
Well, a lot of it is just that the trademarks are a bit of an afterthought. You know, so the portfolio’s a mess. Maybe things aren’t registered, things can be in the wrong names, you know, if there’s mergers and acquisitions and different entity formation involved and nothing’s been updated. You know, I’ve had situations where the record was so outdated and fouled up and renewals were filed in the wrong entity name that we’ve had to just abandon marks and refile and go from the

Phillip McMillan (23:24)
Wow.

John Pickerill (23:25)
Start. And so I think just you know, I know business people have a lot of things they have to deal with and sometimes trademarks are not at the top of mind, but just sort of that neglect is sort of one of the biggest problems. And a lot of it is they didn’t search up front and maybe they haven’t been using it diligently and you know if you want to expand into new markets and they’ve got a descriptive name, you know, you mentioned I think electrical services.

It seems like in these saturated markets, where there are a lot of electrical companies and they’re all geography based so they’re competing with each other, you know, they tend to have similar, you know, on time electrical or they tend to have similar names and so you’ve got a descriptive name and now you want to expand, you’re going to have problems. So it’s really just not that upfront thinking about trademarks that becomes an issue.

Phillip McMillan (24:18)
Yeah, we’ve seen situations where we go in and we’re working with maybe we’re, you know, building a platform name on top of existing operating brands that are in the market, whatever it may be. And we ask the question, like, hey, do they even have the rights to this name? And it’s about fifty-fifty, whether or not even in diligence, they even examined whether or not there was a trademark or not. And we’ve had a lot of situations, I think, kind of to your point.

We’ve had to, we’ve been forced to rebrand an operating brand that had value and equity in the market because they were trying to grow into an adjacent market where there was a competitive brand. And it’s just it’s amazing all the diligence that gets done on these, you know, multi-million dollar deals with millions of dollars sometimes spent and they overlook the trademark. So we do see that a lot where they just don’t check to see is it up to date? Do they have protection?

Is it for the right goods and services? All those things really, you know, it’s something that should be looked at up front. Now that being said, one of the questions we also run into a lot is, you know, there is that kind of, we’ll call it eight-month gap, right? Between in some cases, you’re building a platform, you need a name, you can’t wait eight months to launch it in the market to tell the story to your potential sellers and the buyers in the market.

So what happens if we do get a refusal, right? For whatever reason, something gets overlooked, we roll the dice and it doesn’t pan out. Does that mean that the business, the brand, has to change? Do the courts look at things the same way on the civil side as what you see in the trademark office and from the examiners?

John Pickerill (25:49)
No, not at all. I mean they do take that into account—it does become part of the story if you had refusals at the trademark office. But like I said, a lot of things that are perfectly fine in the real world get refused at the trademark office level. So yeah, I think there are times if you’ve got a good strong mark and you’ve run your searches and you feel comfortable that this isn’t really a problem in the marketplace, yeah, I think there can be strategies for going forward with that mark, protecting that mark, you can go with the state strategy maybe where you register in states, just to give yourself some protection.

But yeah, a failed registration’s not the be-all and end-all. The other part to that is can we use it without much risk? And if you feel comfortable there, yeah, I tell clients if they’ve run searches, yeah, we got to wait eight months, but don’t hold up the brand, you know, you move forward confidently, use your TMs and you know, start building those rights and we’ll deal with the trademark office when we have to.

Phillip McMillan (26:54)
Now that’s one of the questions we get a lot is that, you know, what’s the difference? There’s a TM mark, there’s an SM mark, there’s an R mark, right? And I will tell you, I’ve seen a lot of examples where people add those to their brand. And when we do a little research, there’s actually no paperwork to back that up. But what is the legal distinction between some of those trademark icons that are used in conjunction with brands?

John Pickerill (27:19)
Yeah, and the TM and the SM are really you know, SM is just a service mark versus a trademark. So if you’re providing services, technically you should use the SM. I mean I think consumers see the TM more often and so and they’re interchangeable. It doesn’t affect your legal rights if you use TM versus SM. The important thing is just to provide notice that you’re claiming some rights here, some common law rights in what you’re doing, and you think that mark is distinctive and associated with your business.

So you know you don’t have to file an application. You don’t have to do anything to use the TM aside from just using your mark in the marketplace. And so that TM is kind of a claim of common law rights more than anything else. Now the R symbol means you’ve got a federal registration. So that you’ve got to wait till it registers in order to start using that. But yeah, I encourage my clients to be very liberal with TM and SM.

You know, use it on anything that you think gives you some sort of value in the marketplace and start building those rights.

Phillip McMillan (28:20)
Yeah, that makes sense. Now, when you think about the kind of impact of this on let’s just say that you know, somebody’s taken your advice, they’re doing the diligence, and they uncover either there’s a missing trademark or you take a glance at it and there’s overlap. What kind of cautions and diligence at that point when there’s a flag that’s been raised saying, Hey, wait a minute, this may not be quite in order. What’s the recommended next step for a buyer? Maybe they haven’t signed on the dotted line yet.

What steps should they always be careful to take before they proceed or at least understand what their risk is?

John Pickerill (28:57)
Yeah. Yeah, and I think the risk in a lot of cases depends on the type of deal, you know, and sometimes the trademark is not what’s important in the deal. But if it’s a brand driven acquisition, you know, I think it’s very important to make sure that the chains of title are in order and that, if they haven’t registered things, that we can register things and that you know exactly what that company’s been through. You know, have there been challenges?

Have they tried to register and been refused, and if so, why? So yeah, I would dig into the prosecution history. I would request warranties and information about how they developed the mark, you know, just really understand what they’ve been through with that mark and how it was created. You know, have they run searches? You know, take a look at what they’ve done and make sure that you’re not walking into a problem.

Phillip McMillan (29:45)
Yeah, it makes sense. Get ahead of it when you can. Now, are there other strategies? I know as an example, you know, outside of trademark registration, I know something that comes up that you’ve mentioned to me multiple times is copyright can be a complementary strategy. I don’t think a lot of firms really think about that. Can you talk a little bit about that? How can copyright be an alternate or maybe a layered strategy to trademark protection?

John Pickerill (30:10)
Yeah, and sometimes, well, you know, we tend to like to try to wrap as many protections or throw up as many roadblocks as you can. And copyright can be an important part of that. You know, if you’ve got a distinctive logo, you might be able to register it with the copyright office and that would you know, that would have to have some creative elements. It can’t just be, you know, word treatment or something like that. But if it’s creative enough, you know, that protects against all copying, not just this consumer perception thing.

So if you’ve got a very strong logo that you want to protect, copyright can be a real nice complement to the trademark protection. But you can also look at your trade dress, you know, websites, anything that has even a small amount of creativity to it can be protected through copyright. And you know, like I said, that that provides broad protection against any and all copying rather than just use in a similar marketplace that might cause consumer confusion. So I do think it’s an important tool and it’s cheap.

You know, it’s a couple hundred dollars usually to register and they try to make the process easy enough for the artists, the businesses themselves to register them so you wouldn’t even have to involve an attorney in a lot of cases and you know a $55 filing fee and you can gain some real important protections. You know if you’re ever trying to enforce a brand if you’re ever trying to enforce trade dress or something you know and you’ve got a registration where, in some cases, it’s statutory damages of $150,000 per work.

You don’t have to even prove up certain things. So it’s a huge deterrent. It looks really good in a cease-and-desist letter and I do think it’s a good thing to think about along with trademark.

Phillip McMillan (31:53)
It’s really interesting. I don’t think a lot of firms think about that. I mean, just at a high level, when would you advise a portfolio company to lean on that rather than maybe chase a hard trademark fight? You know, we talked a little bit about, let’s say, eight months down the road, you get a rejection and you’re like, no, you know, we thought we had a clear path. It looks like we might have to fight this. At what point should copyright enter the conversation and even become the primary deterrent?

John Pickerill (32:20)
Well, a lot of it will be the type of materials, the type of protection you’re going after. So if you’re a company that has a lot of creative materials that are important to the brand and that you think are likely to be maybe knocked off by a competitor, you know, I would consider it up front in connection with the trademark protection. Now, you know, trademarks and copyrights are very different things. Not all trademarks can get copyright protection, but if it’s the right situation, I’d say you do it simultaneously and really set up as much protection, as many roadblocks, like I said, as you can, to try to build that brand and deter others from encroaching on it.

Phillip McMillan (32:59)
Yep, it makes total sense. Now I’m going to shift gears just for a moment here to talk about two letters that have proliferated every podcast, every conversation, every email, every dinner conversation we’ve had, and that’s AI. How do you guys think about AI when it comes to your practice? What’s it made better? How has it made you more efficient? How should your clients think about AI in the grand scheme of trademark and IP law?

John Pickerill (33:28)
And yeah, I mean it’s a great tool. I use it; we all use it quite a bit, I think most people do. But you know, for trademark searching, I would encourage clients themselves; they now can do a good job of marketplace searches for the most part. You know, it just makes everything a little faster, trademark agreements, you know, you can get templates out pretty quickly that then you can give it a once over and get those out. So it’s become more efficient.

It’s something, you know, it’s not going anywhere. I kind of think of it as smart Google just because you know a lot of it is what Google used to do, but you just get so much better information and drill down and provide you with sources and stuff so you can really get in there and make sure yeah, this is accurate, this is still timely, because that’s the one problem you see is that it’s just pulling things from anywhere and I know these algorithms they’re going to get better and better they keep doing that.

But currently there are a lot of risks still so you got to make sure what they’re telling you is correct but it sure is a big shortcut for us in doing trademark searching and, yeah, just about agreements. You know, I’ve had clients now send me, you know, here’s a EULA that I had through AI, can you now go through it and make sure it’s actually accurate for my business, that there aren’t things that are pulled in there that might not make sense anymore and that sort of thing.

So for me it’s like that old trust but verify thing, you know.

Phillip McMillan (35:02)
Yeah.

John Pickerill (35:02)
You get a lot of good information, but you do need to make sure it’s still accurate and appropriate, applicable to what your client’s business is, because you know AI doesn’t

Phillip McMillan (35:11)
Yeah.

John Pickerill (35:11)
Always know what’s important to the business.

Phillip McMillan (35:14)
Well, and one of the things we run into, you know, is this kind of confident misinformation, right? Where if you ask the tool directly, hey, you know, do you think I can get I mean, hopefully no one would do this, but hey, does this name look clear for registration? It’ll come back with an answer. But what methodology

John Pickerill (35:29)
Yeah.

Phillip McMillan (35:30)
Did it use to get there? What did it overlook? And sometimes we’ve done some testing in our own development of tools and things. And it’ll say, yes, you know, looks great. And then you’re like, ‘Well, what about this company?’ And it’s like, I missed that. That would be a red

John Pickerill (35:44)
Yeah.

Phillip McMillan (35:44)
Flag. You know, so I think, you know, there’s a balance. And you know, look, we’re doing this podcast in 2026. I don’t know what 2027 is going to look like, but I think you know, the big caution here is just be sure you consult with a professional along the way, right? Today, in 2026, don’t take what the tool gives you as a response. You said, you know, verify. And I think that’s really, really important because the tools don’t yet quite understand all of those nuances of trademark law and the examiner’s office and how they approach things.

It doesn’t have that real world experience that, you know, someone in your seat does.

John Pickerill (36:20)
Yeah, I mean I like to think we still bring some value. Who knows how long that’ll last, but it is true, especially if you’re trying to project registrability, you know, the subjectiveness of that process and unless you’re in there seeing what kind of refusals you’re getting and how to get around them and those kinds of things. I mean, even though these tools are amazing and they can compile a lot of information, they can’t always put all that together. There’s no way they can see or understand how these refusals now apply to this situation.

So you know so one thing about trademark law is that it’s not clear. It’s not black and white. It’s very subjective. It’s very gray. You know, we’re always talking in levels of risk rather than yes and no because, like you say, there’s, common law, registration, there are all these moving parts. Whether, you know, are these services similar enough? Are these marks different enough? There’s just so many moving parts that I think it does take a subjective human a lot of times to analyze this and provide, you know, the full picture of what AI can provide.

Phillip McMillan (37:26)
Well, and I think especially when people think about law, they tend to have kind of a black and white mentality, like a red light, green light, you know. And one of the things I have appreciated working with you and other firms as well, but specifically with you is, you know, look, you’re always going to come back with a percentage of risk, right? And very rarely is it zero risk, right? In today’s world,

John Pickerill (37:47)
Right.

Phillip McMillan (37:47)
That’s unlikely. It’d be great if it happened. But you know, if there’s a name that makes any sense at all that people can pronounce, there’s probably some noise around it. But I also spent a lot of time with clients explaining that like, hey, sixty, seventy percent is actually pretty good in this world,

John Pickerill (38:03)
Yeah.

Phillip McMillan (38:03)
Right? Like, you know, and I know it seems like a roll of the dice, but in reality, like there is so much subjectivity to it that it’s hard for anybody to say with certainty what the outcome is going to be. And I’m sure you spend a lot of time explaining that to your clients as well.

John Pickerill (38:20)
Yeah, and you know, also attorneys are going to sandbag a little bit. You know, you can’t really tell a client a hundred percent because

John Pickerill (38:26)
You never know. I like to try to be accurate, I’ll give you a 70%, sometimes an 80%. But there is at least that 20% of crazy things that might happen to the trademark

Phillip McMillan (38:39)
Yeah.

John Pickerill (38:39)
That you just can’t account for. So you know, it’s getting more and more difficult, like I said, to provide upfront analysis on can we register this? Because the process has become even more subjective and difficult than it was in the past. So yeah, yeah, 60% is pretty good.

Phillip McMillan (38:56)
Well, that’s why you’ve got to have somebody like John in your back pocket, right? Like somebody that can help navigate you through this. And you know, I appreciate you taking the time today. I know that these are just the questions that, you know, nobody thinks about until they have to. And then there’s just so many layers of complexity. And I think you’ve done a really nice job of breaking it down. If somebody wanted to contact you to ask a question or perhaps engage the firm on a particular project, what’s the best way for them to contact you?

John Pickerill (39:23)
Yeah, you know, call, email. I’m easy to find. Pickerill is not all that common a name, so usually John Pickerill attorney brings me up. So yeah, feel free to reach out. I’m happy to answer any questions and yeah, look forward to seeing where things go as we continue to move forward.

Phillip McMillan (39:42)
Yeah, for sure. And thank you so much for taking the time today. I really appreciate it. And hopefully we’ll get a chance to talk soon.

John Pickerill (39:48)
Sounds good. Thanks, Phillip. See you later.

Phillip McMillan (39:50)
Thanks for listening to Buy. Build. Brand. If this episode was helpful, please subscribe on Apple Podcasts, Spotify, or wherever else you may listen so you don’t miss the next one. Also, a quick word on what we do here at CSBG. We work with private equity sponsors and their portfolio companies to keep the brand in step with the investment thesis. When the brand is right, the leadership team and the sponsor tell the same story. Sales teams win on value instead of price. Acquired companies become one company faster.

When it’s time to sell, buyers can clearly see what you’ve built. Whether that means sharpening the message, repositioning the brand, or even naming a new platform, we help get you there. You’ll find us at csbg.co. I’m Phillip McMillan. Talk to you next time.

This transcript has been lightly edited for readability.