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Here’s a battle you didn’t see coming.
One of the joys of being a small business owner is focusing on your passion and spending your energy where you want. It’s building something that wasn’t there before. It’s perfecting what you do—bit by ever-lovin’ bit—and watching your business grow. That’s where your heart and mind want to be—not preparing for a battle with an enemy you didn’t even know you had.
I often talk about the importance of legalizing your business, and in several posts, I’ve outlined how to do it. (You can read more about that here and here.) But the scary thing is, sometimes you think you’ve ticked all the boxes, and you still find yourself side railed, fighting a fight you never dreamed of.
That’s what’s happening to Jared Truby, Chris Baca and Charles Jack, owners of a small business coffee shop called Cat & Cloud in Santa Cruz, California. They opened their shop in 2016 on a dream and belief that the world could and should do business in a better way. They built a values-based company that operates from a mission of “leave people happier than when you found them.” They apply their mission to all people—their customers, employees, and community neighbors. This is their passion. This is where they spend their energy. And it’s paid off.
The Cat & Cloud mission, culture, and coffee(!) have resonated with people, and the business has grown. But it was when they decided to spread their culture and brand to coffee mugs and t-shirts that the construction giant Caterpillar, Inc. took notice. Caterpillar Inc., the world’s largest construction equipment manufacturer, with revenue of $54 billion in 2018, has asked the U.S. Trademark Office to revoke Cat & Cloud’s trademark registration for clothing.
That’s right. Cat & Cloud, having grown to 3 stores and 50 employees, thought they ticked all the boxes. They did as I urge all small business owners to do—they legalized their business and registered their trademark with the U.S. Trademark office. Unfortunately, this wasn’t enough to prevent a legal battle. Even though Cat & Cloud owns its trademark in all the appropriate categories, if someone – such as Caterpillar, Inc. – challenges that ownership, they can lose their trademark rights unless they actively defend them.
Actively defending the Cat & Cloud Coffee trademark against a giant construction equipment manufacturer wasn’t part of their original business plan. Of course not. They didn’t see this coming. Who could? And now that it’s here, what can they do?
First and foremost – and this is good news – they had already legalized their business and registered their trademark for Cat & Cloud Coffee. If they had not done this, the battle would be over before it began—there would have been no hope for salvaging their business name, at least with respect to clothing.
Second, they’re fighting for their trademark with legal representation. But that’s costly. From their own research on trademark litigation, they’ve seen that cases can cost up to $100,000. To help finance their legal fees – and in their own words, to encourage “Caterpillar to see their way to being better than this” – they have set up a GoFundMe page. They are also hiring a PR firm to help spread the word.
And, in accordance with their mission of leaving people happier than when they found them, any funds they raise above and beyond their battle fees will be donated to one of three charities they support and believe in. One of these is the Boys & Girls Club of Santa Cruz, California (in their community) and another is the Boys & Girls Club of Lake Forest, Illinois (in Caterpillar’s community).
Now, that’s no bitter cup!
This Could Be You
Unfortunately, this David and Goliath story isn’t all that uncommon. It happens more than I like to see. Although you can’t ever prevent litigation, you can minimize your risk and you can put yourself in the best position to win if someone does sue you. Here are a few steps you can take to protect yourself:
✓ Make sure your business name is thoroughly researched and on solid legal footing. Learn how to do that here.
✓ Every business in growth mode should budget for legal issues, both foreseeable and unforeseeable. Budget two times more than you anticipate.
✓ Speaking of foreseeable legal issues, if you haven’t trademarked your business or product name, do it now. I offer flat-fee services for trademark searches and registration.
✓ Have a relationship with a business-friendly attorney. You know where to find me.
