A Whatcom County businesswoman has won a trademark battle against a retail giant that could change the way brand names are defended.
In late October, the U.S. Trademark Trial and Appeal Board ruled that Christine Palmerton’s company logo and name, Nautigirl Brands LLC, was not similar enough to those of Nautica Apparel and refused to cancel Nautigirl’s trademark.
After nearly three years of litigation, Palmerton’s company is no longer in a state of limbo, and she can focus on trying to grow it.
“I’m back to where I was three years ago, but I’ve been vindicated,” Palmerton said, adding that her motivation is back to operated the business again. “I’m elated.”
In January 2013, Palmerton received a cease-and-desist letter from Nautica, demanding that she stop using her business name and logo as well as forfeit all of her products that have the Nautigirl name on them. Nautigirl is a small company that sells clothing and other products, such as coffee mugs, geared toward boating enthusiasts.
Nautica contended that her logo and company name — Nautigirl, with the tagline “Dare to be naughty” — were too similar to the Nautica brand and would create consumer confusion. Nautica’s logo is the outline of a spinnaker sailboat, while Nautigirl’s cartoon logo has a woman holding a martini while standing behind a ship’s wheel.
Particularly perplexing to Palmerton was the fact that she had trademarked the Nautigirl name in 2008. As part of the process, the U.S. Patent and Trademark office researches all applications to make sure there isn’t a similar name that could lead to brand confusion.
Nautica is one of many large companies that is aggressive when it comes to defending its brand, landing on the list of “trademark bullies” on the trademarkia.com website. The website lists more than 50 instances of Nautica challenging a business name or logo since 1995.
Nautica has products available in 75 countries, according to its website, with 265 regular stores and more than 3,000 Nautica-branded shop-in-shops.
Going after a company like Nautigirl to drop its name or logo has become common practice because large companies can successfully intimidate small businesses into giving up in order to avoid huge legal fees, said Eve Brown, Palmerton’s attorney.
At the time of the court filing, Brown was the director of the Intellectual Property and & Entrepreneurship Clinic at Suffolk University Law School in Boston. The clinic took on Palmerton’s case pro bono, enlisting third-year law students to gain experience in a real-world setting. Brown now directs the Intellectual Property Clinic at Boston University.
Brown estimates the case would have cost Palmerton around $200,000 if she had done it on her own. Palmerton would not have received anything for her legal fees even if she had won on her own.
It may have cost Nautica even more, Brown said, given the thousands of pages of documents the company submitted and the attorney time spent on the case. Brown said it might be first time Nautica has lost a trademark case, with most of the other cases being settled before a ruling was reached.
Attorneys handing the case for Nautica did not return an email message seeking comment about the ruling and whether the company would appeal.
Brown said the decision is important because of how costly litigation can be for small businesses that already have a trademark. She is also working on ways to raise the bar on what qualifies as a way to curtail what she sees as an intimidation tactic by large companies.
“What we are hoping is that Nautica will think twice about filing these (cease and desist orders),” Brown said. “It is now no longer cost-effective for them.”
In making its ruling, the U.S. Patent and Trademark Office said Nautica was going too far in claiming that it had superior rights to all brands with the “naut” or “nauti” prefix marks for nautical-theme goods. Brown called that a key part of the ruling, adding that it could help other small companies in future cases.
Since the case stretched over several school years, 10 Suffolk University students worked on the case.
“The purpose of the clinic is to train students for the real world,” said Anne Hulecki, the new director at the Suffolk University clinic. “This was extremely real world.”
Hulecki said the clinic regularly gets cases like this from small-business owners seeking help.
“Every trademark owner has the right to protect their (trade)mark,” Hulecki said, adding that owners shouldn’t think they need to back down after they are hit with a cease-and-desist order.
Christina Mott, a 2014 graduate of Suffolk who worked on the Nautigirl case, said many of her tasks involved research and client communication, but said it was important work.
“The takeaway for me is that this case gives hope to small businesses,” Mott said. “Trademarks matter, they matter tremendously.”
Now that the trademark case has concluded, Palmerton said she is highly motivated to grow her business again. When the company’s name was in question, she couldn’t get financing or other help to try to expand.
She first plans to improve her website and attend boating trade shows. She’s also wants to get her products into local stores; currently her products are available at Bay to Baker Trading Co. at 911 Harris Ave., and on her website at nautigirl.biz.
Palmerton never planned on being David to Nautica’s Goliath in terms of court litigation, so at times she wondered whether it was worth it.
“You do question how much time you want to put into this,” Palmerton said. “But I knew I was right, and I didn’t want to give it up. This (trademark win) gave me confidence that this is worth fighting for.”