October 14, 2014

Gilt v. Gilt- This is What Happens When you Don't Listen to Us

by Guest Blogger


My two-year-old daughter is adventurous and brave. She hops across the back of the couch. She stacks up toys and climbs onto the kitchen table. My wife and I do our best to protect her without crushing her free spirit and repeatedly explain what will happen if she falls. Of course, she never listens, which is irritating. Even more irritating, however, is that she never falls, which means we never get to say "we told you so."

New business owners are also adventurous and brave. We repeatedly tell them to develop distinctive trademarks and protect them with federal trademark registrations. We tell them that a full search for conflicting trademarks is often well worth the expense, particularly for companies with plans to expand nationally. We tell them what will happen if they choose not to follow our advice.

What happens, is Gilt v. Gilt.

Yesterday, online shopping pioneer, Gilt Groupe, was sued by a little-known Portland, Oregon jewelry store, Gilt, Inc. for trademark infringement.

According to the Oregon Secretary of State's website, the name "Gilt" was first used by Paula Bixel's jewelry store in 1998. She did not apply for federal trademark protection at that time and therefore had only common law trademark rights, which are limited to the geographic region where the trademark is used. If, however, she had spent the relatively small amount of money to apply for federal trademark protection, she would've had national trademark rights, she would've been listed in the Trademark Office's federal database, and she would've avoided what happened nine years later. But, she didn't listen to us and this is what happens when you don't listen to us.

Gilt Groupe is a giant, members-only discount retailer known for its "flash-sale" business concept. It is also an excellent place to buy Tumi bags at deep discounts. Gilt Groupe was founded in 2007, nine years after Gilt jewelry. Unlike Gilt jewelry, Gilt Groupe applied for a federal trademark registration. Gilt, however, apparently failed to do a full trademark search (at least one that included business names from the Oregon Secretary of State's office) and therefore did not know about the Gilt jewelry store. So, while Gilt Groupe is a bit less culpable here, it would've avoided this mess if it had taken the extra step of getting a full search, you know, just like we've said multiple times.

So, based on the facts here (and ignoring that it took Gilt jewelry seven years to do anything about this), it seems like Gilt jewelry could win use of its trademark in its geographic region, with Gilt Groupe getting the rest of the country. Of course, the only thing that is certain is that everyone will end up spending a ton of money, just like we told you over and over again.

In addition to the looming financial burden, the Gilt trademark situation has reportedly taken an emotional toll on Ms. Bixel. According to her lawyer, "When people walk by her storefront and mistake her unique store for a corporate giant, or remark on all the spam they receive from 'Gilt,' it is heartbreaking for her." Even though we think that may be a tad dramatic, we relish the opportunity to finally scoop someone off the floor, hold them tightly while they cry, and whisper "we told you so."

The lawyers at Trademarkology provide trademark registration services backed by the experience and service of one of the nation's oldest law firms. Click here to begin the process of protecting your brand name with a federally registered trademark.