Faux pas – A business owner in Baton Rouge received an unforeseen legal challenge over naming rights claimed by a French company.
Imagine you’ve been doing business for 11 years or more. Your brand has been so successful that you’ve opened two additional locations elsewhere in the state and are contemplating two more. Plus, you’re about to go international with an online store.
Then one day, you get a letter from a company in another country, insisting that you stop using your business name because they own the trademark to it.
That’s the true story of what happened to Heather Gahagan, owner and founder of Vertigo Clothing in Baton Rouge.
The popular Lee Drive women’s boutique with locations in Lafayette and Shreveport has changed its name to Vertage Clothing since Gahagan learned a French fashion designer owns the trademark to “Vertigo.”
Gahagan opened Vertigo in September 2000 after discovering that law school wasn’t really her calling.
Following a lengthy search for a suitable name, she decided to use the title of a favorite movie, the 1958 Alfred Hitchcock thriller starring Jimmy Stewart.
Like any new business owner, she filed the proper paperwork with the state establishing her limited liability company. To protect the brand, she also secured the Louisiana trademark for the name and logo. Lawyers at the time advised her that a federal trademark would be costly and wasn’t really necessary.
“We did ask those questions,” Gahagan says. “It wasn’t like we got into something we were unprepared for. We were young, but our scope wasn’t just limited to, ‘Well, let’s just do this and get open.’ We were very diligent about every license, every piece of paperwork that we had coming into it. We were honestly just advised that it didn’t matter.”
For the next decade, the boutique that carries popular lines such as Tulle, Seychelles and BCBGeneration flourished uninterrupted. Less than five years after opening in Baton Rouge, Gahagan added a location in Lafayette. A little more than a year ago, she opened the doors of a Shreveport boutique.
Vertigo Clothing’s online presence was expanding as well. Her boutique’s website was at the top of the Google results, and her Facebook page had thousands of fans. She hired a manager to kick off an online store.
Then in August 2011, attorneys for Vertigo Clothing received a cease and desist letter from Vertigo Holdings in Paris. As it turned out, the clothing manufacturing firm had secured the trademark to “Vertigo” in 1984, when Gahagan was 7. Vertigo Paris was opening stores in the United States and on the verge of launching its own online store, and wanted to enforce its trademark.
“We really thought we’d be able to fire off a couple of letters and it would be over,” Gahagan says. “Unfortunately, that was not the case.”
The two parties negotiated for more than a year before agreeing on a suitable name change for Gahagan’s stores: Vertage Clothing.
Then the real work—and expense—of changing the name began.
The company formerly known as Vertigo was forced to order new signs for its three storefronts at $9,000 each. It also had to destroy all merchandise tags, bags and gift cards with the existing logo, and spend thousands of dollars to replace them. The computer system had to be redone, with new receipts.
Billboards had to be replaced with others depicting the new logo. Gahagan also had to secure a new online domain and change the company name on Facebook, which, she discovered, isn’t as easy as typing in a new name. It requires serious paperwork.
The biggest task: educating employees and customers about the name change. Vertage’s marketing campaign has centered on a simple theme: This is just Vertigo coming of age. New stores. New online shopping opportunities. New name.
“Now that we have the name, we’re solid,” Gahagan says. “We have the federal trademark. No one else can have a clothing/accessory store with the name Vertage, which is a made-up word. It doesn’t mean anything. So now we’re in the clear. I feel at ease with it. I’ve come to the conclusion it’s in our best interest, which is to continue to evolve, not let the obstacles of a couple of letters get in our way. Hopefully, we won’t miss a beat.”
Vertigo Clothing’s experience can easily happen to any business that doesn’t have federal trademark protection, says Lee Ann Lockridge, an LSU professor who specializes in trademark law.
“A mistake some small-business owners make is to think, ‘Well, if I don’t have aspirations of expanding and going elsewhere, then the trademark doesn’t matter,’” she says. “They’re only thinking offensively. They’re not thinking defensively, that someone else might have the right to make them stop using the name.”
Simply registering a company with the Louisiana Secretary of State’s Office doesn’t provide trademark protection of the name, Lockridge notes.
Even before embarking on a costly name vetting, a free Google search can indicate whether a trademark might already exist. Another recommended source is the U.S. Patent and Trademark Office, which makes accessible an online database, although a novice might find conducting a comprehensive search on it somewhat challenging.
“If you’re preparing to invest any real money in a business, you’d be well-advised to take care of your trademark interests as well,” Lockridge says. “But before you even call the attorney, do some Google searching, because you can start the conversation at a higher level if you have some confidence that you’re not completely blocked out already.”
If she had it to do over again, Gahagan says she would have indeed pushed for a more thorough investigation into whether her company name might be subject to a federal trademark challenge.
“For a lot of small businesses, it’s not something that they’re going to look into,” she says. “And if they would look into it, a lot of them would honestly be in conflict with a federal mark. If that person’s actually going to come and try to enforce their mark, especially if they’re overseas, that is a complete crapshoot. You just never know. But the Internet has made everything so accessible. My advice would be, save yourself the headache and try to get the state and federal protection.”