What Hotels.com Teaches Us About IP Law

At the start of 2015, SMEs in the UK accounted for a staggering 99.3% of all UK businesses according to research conducted by the Federation of Small Businesses Despite this significant figure, the importance of SMEs’ needs for intellectual property services is largely unaddressed.

The emergence of the digital economy has allowed small businesses to market themselves to a global audience, removing a traditional barrier to entry in many industries.  However, if these small businesses don’t take steps to protect their intellectual property (IP) they can risk losing out.

Leading lawyer and intellectual property expert Shireen Smith of London-based law firm Azrights explains that it is surprising that society has not yet recognised how essential IP law is.

Shireen says “Unfortunately due to the current confused IP landscape, legal issues can and do fall between the cracks.  In particular, there is little advice available for SMEs to think strategically about their name choice.  Instead they are led to mistakenly believe that any name they use in their business is good enough, provided they register it as a trademark.”

“Because SMEs can now market to a global audience, it is important for them to pick names which can help them to stand out.”

“A trademark registration should be planned properly.  The notion that registering your own trade mark is as good as getting legal help, risks not getting adequate protection.  It is easy enough for SMEs to waste a lot of money filing inappropriate trade marks.”

Shireen expresses her concern about one issue in particular that can cause confusion when doing business online, “Naming can get mixed up with the question of being found online.”

“The general wisdom among certain online marketing specialists is that you should choose a name that matches a keyword people will be looking for.  However recent changes in Google’s algorithms make the benefit of using descriptive names insufficient.”

“An example of the sort of problem that can occur for a business with a descriptive name is Hotels.com, which was founded in the early days of the web when many companies tended to use generic descriptive names as brand names.”

“The company applied to register its name as a trade mark and put forward evidence to persuade the United States Patent and Trademark Office that its brand had acquired distinctiveness during the twenty years it had been in business.  After carrying out a nationwide survey of consumers, the company found that consumers regarded Hotels.com as a brand name.  Nevertheless, the USPTO held that the mark was generic, and Hotels.com lost the case.”

Shireen explains how that in opting for a descriptive name, Hotels.com left itself vulnerable.

“The downside to using a purely descriptive name is that there is little you can do to stop competitors using a similar name and piggy backing off your success and inevitably diminishing the value of your product.”

Shireen concludes by saying that “Names are only perfect if they are both legally available and legally effective.  Only then is it possible for SMEs to gain the best protection for the company’s IP assets.”

‘Intellectual Property Revolution’ by Shireen Smith is available from Amazon and is priced at £12.99.  The book contains expert advice for businesses on how to successfully manage IP assets, protect brands and add value to businesses in the digital economy.  It is written in plain English and is intended for use by business owners and ‘brand guardians’.