18 Aug Beware — Use of the word 'entrepreneur' can put you in a legal mess
Perhaps no single word better describes today’s go-it-alone economic climate than the word “entrepreneur.” The French-derived noun has a certain cachet that is appealing to those who would strike out on their own.
In today’s bootstrap economy, mayors of cities large and small along with colleges and universities and state-sponsored extension programs are reaching out to would-be entrepreneurs to help them in their quests to be successful and create jobs.
Along with the potential pitfalls that await a small business start-up, there is one that most will never consider: Using the word “entrepreneur” as part of the business name.
Use of the word entrepreneur has been trademarked by the Los Angeles-based parent company of Entrepreneur Magazine. Entrepreneur Media Inc. (EMI) claims exclusive rights to use the word. Nobody can use it as apart of a domain name, a publication name, for entertainment purposes, or for radio and TV programs.
As Scott Smith discovered, it’s not a good idea to get on EMI’s bad side. Smith’s Sacramento, Calif., public relations firm, formerly known as EntrepreneurPR, has been waging an ongoing legal battle with EMI since 1998, when Smith received a cease-and-desist letter from EMI’s legal counsel to stop using the name.
While Smith was ultimately forced into personal bankruptcy and had to lay off all of his employees when the court ruled in favor of EMI, he continues his one-man campaign to draw attention to the “brand bully” phenomenon. That typically involves a larger enterprise trademarking a common, everyday word, and then vigorously protecting the use of that word, often at the expense of microbusinesses that lack the financial means to defend themselves.
Smith cites the example of computer microchip giant Intel, which has obtained a trademark on use of the word “inside,” as part of the company’s advertising catch phrase “Intel Inside.” According to Smith, a small non-profit that went by the name Yoga Inside, that teaches Yoga to people who are incarcerated, was forced by Intel to change its name.
“It’s just gotten out of hand,” says Smith, whose company was named one of the top 10 fastest growing PR firms in the U.S. in the year 2000 before he was brought down by EMI’s legal claim. “My clients are entrepreneurs,” Smith says. “If you say you are a small business owner, that limits where you are headed. When somebody is an entrepreneur, that is much more of a flattering description.”
Based on trademark law and Smith’s own experience, there is potential liability for naming an event an entrepreneur’s conference, such as one by the same name that was staged by the Wisconsin Technology Council and the Milwaukee chapter of the Wisconsin Innovation Network Foundation earlier this summer in Milwaukee.
Further, publications that use the word entrepreneur are definitely at risk. For example, the University of Wisconsin Extension has a statewide program that targets rural entrepreneurs. The Wisconsin Entrepreneur Network (WENportal.net) is on online network that connects entrepreneurs with state organizations that can assist them.
The website has an online newsletter called Entrepreneur@work, which highlights news and events that are relevant to the Wisconsin entrepreneur.
“Everyday, it’s getting to be a more popular name,” says Erica Kauten, director of the UW Extension’s Business and Manufacturing segment. “I think it means everything from a new business startup, to somebody inside the workplace that is actually being innovative. I think anyone who takes the lead position on an innovation is going to be called an entrepreneur. I think it has become an incredibly commonplace term.”
Mark Finkelstein, an Orange County intellectual property attorney who is retained by EMI, says that EMI’s team of attorneys looks at each individual case based on the merits.
“If there was a magazine called Wisconsin Entrepreneur, we would almost certainly take action,” he said. “We would have to see the magazine to see how they are using it. We are policing it, but we can only go after so many people at a time.”
Picking on the little guy
According to Smith’s attorney, Jeff Kravitz, EMI went after a newsletter called The Entrepreneur that is sent out to alumni of Carnegie-Mellon. He also claims EMI’s attorneys issued a cease and desist order to a publication called Asian Entrepreneur, and made Female Entrepreneur magazine change its name.
But, in other seemingly obvious instances, EMI chooses not to go after companies, Kravitz says.
“The editor of Entrepreneur magazine was on a show called “Entrepreneurs Only” on CNN, and they didn’t try to stop that at all,” he said. “There is no rhyme or reason as to what they went after. To compare Entrepreneur Magazine as a strong name to something like Playboy . The courts have claimed that it [use of the word “entrepreneur”] is not generic. At [Smith’s] trial, the judge found that the name was strong. It is inconceivable to compare Entrepreneur to a strong trademark like Playboy. How could anyone know whether or not their use is infringing?”
Finkelstein says the common standard that trademark holders apply is: What are the goods and services associated with use of the name? If the public isn’t likely to be confused because of the nature of goods and services, then two trademarks can co-exist, he says.
Smith claims that’s a load of manure, citing numerous inconsistencies in the cases where EMI has issued a cease-and-desist letter to protect its name. Those targeted include a young San Diego entrepreneur who wanted to start a clothing line, a computer game manufacturer, and an online service for entrepreneurs for business to learn how to run their businesses better. Those individuals were forced to change their names, or give up the idea entirely, such as Heather Tornincasa, who said EMI effectively put her idea for a clothing line out of business before it started by issuing the cease-and-desist order.
“I don’t have the time, money or energy to fight Entrepreneur Magazine on this issue,” she said. “It’s a very negative part of my life. I am so bothered that because this happened to me, that I am now reluctant to start my own business. And, this was the first good idea that I had for starting a business. I am so exhausted by this experience, it’s now going to take so much more to start my own business.”
Ironically, Tornincasa said she formerly subscribed to Entrepreneur Magazine. The same month she got one of its magazines in her mailbox, she received a cease-and-desist letter from EMI ordering me to stop using the name.
“They’re just hurting their own customers,” she said. “It just blew me away. I wish I could fight them. I think it’s just wrong what they are doing. A third party needs to protect us on this. There is no way for us to fight back.”
In order for the trademark claim to have validity, people have to be able to source the word back to Entrepreneur Magazine. Smith says EMI’s claim is that the magazine is so well-known, that when people see the name on clothing, or, in his case, as part of a public relations firm, that people will source it back to Entrepreneur Magazine.
Smith says that it is not uncommon for brand name bullies to be selective in the fights they pick. For example, EMI has allowed Ernst & Young to continue with its “Entrepreneur of the Year” award and conference and its Entrepreneur of the Year Institute, while targeting smaller entrepreneurs who have no idea that they are potentially violating EMI’s trademark. Smith claims the magazine has cozy relationships with others who are clearly in violation of the trademark, yet, it looks the other way.
“They don’t want people to know what they are doing,” Smith says. “They have never mentioned it in a single issue of their magazine. They want this to be a secretive thing, and selectively go after small entrepreneurs, pile up these little legal victories and build up a track record.”
• Click here to read Part I of this series.