Trademark Filings Can Act As The Canary In The Coal Mine: The Strategist’s Secret Weapon

As a savvy small business owner who wants to ensure your business thrives even during tough economic times, it’s crucial to stay on top of trends. Doing so is akin to having a secret weapon to create a strategy that can handle whatever the future throws at you. Crafting these type of strategic battle plans is one of our absolute favorite ways we get to serve our clients.

Corporations track shifts in intellectual property trends to help traverse tricky economic eras, and there is absolutely no barrier to entry on employing the same tactics. The information is out there, we just have to implement it properly. Here’s what to look for:

Pay attention to shifts in trademark activity at the USPTO – they can act as a warning sign for recessions. Throughout history, there has been a noticeable link between trademark application trends and economic downturns. The number of trademark filings tends to ebb and flow with the state of the economy, reflecting shifts in consumer spending and business investment. It’s almost like a parallel to stock market crashes.

When the economy is booming, businesses tend to invest more in branding and safeguarding their intellectual property by registering trademarks. This leads to a surge in trademark applications. On the flip side, during a recession, businesses may tighten their belts, reducing spending and postponing projects – including new trademarks. Consequently, we see a drop in trademark filings and a decrease in trademark disputes as businesses try to cut down on legal expenses.

Therefore, by analyzing trends in trademark activity, we can gain valuable insights into the overall state of the economy. A decline in trademark filings and litigation could indicate an impending recession, while an increase in these activities might suggest economic growth and stability. In essence, trademarks act as an early warning system for both businesses and policymakers, allowing them to monitor economic trends and be better prepared for any potential changes.

Throughout history, there has been a fascinating correlation between trademark application trends and stock market crashes. It appears we might be in the midst of one of those cycles right now. Let’s take a trip back to March 2000, when the NASDAQ reached its pinnacle during the Dot Com Boom. Interestingly, new trademark applications in the US were also at an all-time high during that period. However, the following year brought the recession, and trademark applications plummeted to their lowest point in December 2001.

Now, let’s zoom ahead to March 2007. Once again, we witnessed a surge in trademark applications, just a few months before the Great Recession kicked off in December of that same year. True to form, trademark applications nosedived by 16% in the last quarter of 2008, followed by another 20% drop in the first four months of 2009.

If we shift our focus to the Trademark Trial and Appeal Board’s docket of ex parte appeals, a similar pattern emerges. There was a significant 20% decrease in the 13 months following October 2007, followed by another 25% drop in the subsequent six months. Additionally, the number of pending oppositions and cancellations experienced a 9% decline between the end of September 2008 and the end of March 2009.

Opportunities for entrepreneurs in the new era:

Since 2020, we may be stepping into a “new era”. For instance, there was a downturn from a peak in trademark applications (in 2020, 659,000 new trademark applications were recorded; a one-third increase from the previous annual high of 495,000 in 2019). However, according to data from the US Patent and Trademark Office, trademark applications have been falling consistently for five quarters, starting from 2020 to mid-2021.

Now, if we are indeed headed into a recession, there’s a glimmer of hope for business owners in the form of intellectual property. A recession can be a strategic time for businesses to file a trademark for a few reasons/ two silver linings for those who own businesses:

First, if a downturn in the economy causes your calendar to slow down, take advantage, and take care of your legal loose ends. Filing for a trademark during a recession can help businesses prepare for the eventual economic recovery. By securing a trademark during a downturn, businesses can position themselves to take advantage of future opportunities and be ready to expand their operations once the economy bounces back.

Second, a recession can present opportunities for businesses to enter new markets or launch new products or services. By filing for a trademark during a downturn, businesses can protect their brand and prevent others from using similar names or logos that could dilute their brand identity.

Third, and arguably most importantly, know that other businesses recognize these same advantages. Once a trademark is registered, no other mark that raises a “likelihood of confusion” with the registered mark may be registered. Companies often use times like this to box competitors out of the market (including international actors), so that when the economy bounces back, they are in a superior position to take advantage of the marketplace. 

Finally, filing for a trademark during a recession can also signal to investors and customers that a business is committed to its long-term growth and success. It shows that the business is forward-thinking and taking steps to protect its assets and brand, even in a challenging economic environment.

Overall, while a recession can be a difficult time for businesses, it can also be an opportune moment to focus on protecting and strengthening their intellectual property, including trademarks.

Trademarking in 2023 takes approximately 12-15 months. If you are considering trademarking your brand name, logo, or slogan, take time to reach out to a trademark attorney now. A good attorney won’t just tell you (honestly) if this is a useless endeavor, but will also identify the opportune time to do so.

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