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For franchisors, the benefits of trademark monitoring can be substantial and the costs relatively low, as I  wrote last October for the IAFD discussing the benefits of trademark monitoring programs.  Here are four real-world examples of how trademark monitoring has helped (or could have helped) franchisors and other business owners maintain control of their brands online.*

*While the following examples are based on real cases, facts have been modified to maintain complete confidentiality with respect to the actual matters involved.

1. The Franchisee Who Never Paid

A new franchisor was subject to financial assurance in certain registration states, and had opted to defer collection of initial franchise fees. A new franchisee signed a franchise agreement, received training and certain materials, but then never opened for business--and never paid the initial franchise fee.

It appears that they had intended to do so--as trademark monitoring revealed they had set up a website and commented on forums using the franchisor's trademarks (in violation of the franchise agreement). But then he went silent (and apparently changed his address) when it came time to pay.

Through monitoring the franchisor's trademarks online, we were able to keep tabs on the "franchisee's" conduct (and use it to the franchisor's advantage) while termination and other enforcement remedies were pursued.

2. The Sudden Competitor

In a case where an effective monitoring program would have significantly mitigated damages and the scope of the parties' dispute, a new client came to me after a significant amount of damage had already been done. The client owned a registered trademark for use on apparel and in connection with retail services, but someone else had previously registered the corresponding ".com" domain name and kept it dormant for years.

The client operated successfully under similar domain names (e.g., "trade-mark.com" and "trademark.net"), until she started receiving complaints and comments that were wholly unrelated to her website and products. As it turns out, shortly after she launched her business, the ".com" owner launched a commercial site that was causing confusion and misrepresenting the client's brand.

Fortunately, we were able to make a strong argument for bad faith that helped produce an efficient settlement, but the settlement costs and loss of business likely could have been reduced substantially if the alleged infringer had been identified and targeted much earlier in the process.

Given actual prior knowledge of the domain name, this would have been a particularly easy issue to address through trademark monitoring.

3. The USPTO Registrant

In another case where trademark monitoring would have saved significant costs and headaches, a new client came to me after delaying in filing for initial trademark registration. He had been using his trademark online for close to a year, but had simply put off registration with the USPTO.

In performing the trademark clearance research in connection with the application, I discovered that someone else had filed for registration of an identical trademark for use in connection with substantially identical professional services only a month and a half earlier. A month and a half may not sound like much, but for small business owners (and bad faith infringers), this is plenty of time to put lots of money and effort into building a new online brand.

Somewhat fortunately, again, this appeared to be a case of bad faith, and that helped expedite a favorable settlement (withdrawal of the competing USPTO application), but the potential damage if we had not reached a settlement was substantial. Had the business owner been engaged with an effective trademark monitoring program, it is likely that (i) the bad faith user would have been spotted before they applied for registration, or (ii) at the very least, the competing application could have been addressed much sooner after its initial submission (of course, the issue may have been altogether moot if the client had just timely sought to register his trademark).

Either way, the risk of loss and paralyzing uncertainty likely would have been mitigated substantially through effective trademark monitoring.

4. The Unauthorized Reseller

Finally, in another case where trademark monitoring served its purpose, an author of business publications was able to discover that an unauthorized individual was re-selling digital copies of her publications online - using her name to promote them - without her authorization. While we could not immediately track down the infringers, being aware of the problem, we were able to make effective use of the Digital Millennium Copyright Act to get the infringing copies removed from the Internet in less than a week.

The client will need to continue to monitor to make sure that the infringer does not resurface on some other ISP, but under the circumstances trademark monitoring allowed her to protect her reputation and maintain exclusive control over the distribution of her works for only marginal additional fees.

Conclusion

As these examples demonstrate, for franchisors, the benefits of trademark monitoring can be substantial. Not only does trademark monitoring allow franchisors to promptly address instances of potential third-party infringement, it also allows them to (i) monitor franchisees' representations of their brands, and (ii) identify and address possible unauthorized disclosure and redistribution of their confidential and copyrighted materials. This day in age, franchisors (and really all companies) shouldn't be without a strategy for protecting their trademarks online.

Jeff Fabian assists business owners in minimizing risk and protecting their intellectual property assets so that they can stay focused on running their businesses. Visit www.fabianip.com for more information, and follow Jeff on Twitter @FabianOnIP.

It is critical for brand owners to monitor and protect their trademarks on an ongoing basis.

While Nike and Best Buy have been in the news recently for their trademark monitoring and enforcement efforts, trademark monitoring is not just for the mega corporations--all business owners need to monitor and protect their trademarks.   Trademark monitoring is especially critical for franchisors, whose business models - and franchisees - rely heavily on the strength and reputation of their brands. ;

There are four benefits to an ongoing trademark monitoring program.

Benefit No. 1: Identify and Address Potential Infringers Before they Create Problems for Your Business

One of the primary functions of trademark monitoring is to discover and proactively address both active and would-be infringers who adopt trademarks or purchase domain names that are confusingly similar to your own.

Federal law protects valid trademarks from unfair competition caused by consumer confusion, and monitoring the web for both knock-offs and unintentionally similar trademarks serves to protect and maintain a business's exclusive trademark rights.

In addition to being highly important from a legal perspective, preventing consumer confusion is also crucial to maintaining the business generally and to protecting the value of the brand. Trademark infringement disputes can easily value into the millions of dollars where one company's use of an infringing trademark siphons business from the rightful trademark owner. Even where litigation results in recovery of damages for lost profits, the damage from infringement caused by loss of opportunities and a reduced customer base can continue to have debilitating effects for the business as a going concern.

Importantly, consumer confusion can result not only from the presence of identical competing trademarks, but also from the presence of trademarks that are confusingly similar or that appear related. As a result, a broad and strategically-planned trademark monitoring strategy is necessary to protect your business.

Business owners have to stop infringement before it starts, and this purpose can be served through ongoing trademark monitoring. Infringers may be more likely to comply with simple cease-and-desist demands if they haven't already spent tens or hundreds of thousands of dollars promoting a brand they thought was theirs for the taking.

Benefit No. 2: Addressing Consumer Reactions and Competitors' Representations

Consumer Reactions

By instituting a formal and comprehensive monitoring program, brand owners can keep tabs on and promptly respond to consumer sentiment expressed in forums, complaint sites and social media.

This applies to both positive and negative references.

On the positive side, an effective trademark monitoring program allows business owners to take advantage of positive consumer feedback to further develop their product/service lines and marketing strategies in line with demand. On the negative side, active monitoring can be critical to combating widespread circulation of damaging comments. The response should be different for valid and invalid comments, but either way a response is critical to protecting the value and goodwill of your brand.

From a legal perspective, this is important for a number of reasons, ranging from avoiding claims of "abandonment" of the business's trademarks to building a record in the event that a legal claim is filed.

Competitors' Representations

With regard to competitor representations, trademark monitoring serves a number of important functions as well.

These representations can take the form of comparative advertising, negative "reviews", domain names, social media accounts, and PPC advertising keywords that show their websites instead of yours. Each of these constitute means by which a competitor can seek to either (i) damage your brand directly through negative imagery, or (ii) damage your brand indirectly by usurping (in many cases, improperly) the goodwill of your brand to their own benefit.

No matter the situation, by regularly monitoring this type of conduct, brand owners can maximize their ability to protect the value and goodwill of their brands.

Benefit No. 3: Monitoring Licensees and Franchisees

"Licensees" can take a number of forms: franchisees, as well as, online affiliates, independent sales representatives, retailers, and distributors to name a few others. Generally speaking, anyone who a business allows to represent or sell their products in the marketplace is going to be a "licensee."

Federal law requires trademark owners to monitor licensees' use of their trademarks (it's true, and few small business owners know this), and failure to do so can actually lead to a determination that the trademarks have been "abandoned." Once a trademark is deemed abandoned exclusive rights are lost, and the possibility of regaining exclusivity is next to none.

Within this framework, monitoring of licensees serves a number of important functions--both legal and business.

First, trademark owners must make sure that licensees are making proper use of their trademarks. Generally speaking, trademarks must be used as adjectives--not nouns or verbs (legally speaking, trademarks are "indicia of origin," and as such must modify the product or service description, as opposed to constituting the description itself).

Allowing licensees to use trademarks as nouns or verbs can lead to a determination that the trademark is merely a generic or descriptive term, which can ultimately lead to a finding of abandonment.

Second, trademark owners must monitor franchisees, affiliates, sales reps and distributors to make sure that they are not engaging in misleading advertising, are not disparaging your trademarks in favor of a competing brand, and are also taking adequate measures to promote the brand.

The contracts with these individuals should impose limitations and obligations in these regards, and trademark monitoring serves the companion purposes of making sure licensees are both meeting their contractual obligations and otherwise conducting their campaigns in an appropriate manner.

Other situations where trademark monitoring serves similar purposes are where a trademark owner grants "certifications" and needs to make sure certified entities or individuals are meeting their obligations, and in franchising.

Among the host of obligations franchisors and franchisees have to one another, proper use and promotion of the franchisor's trademarks is in the forefront.

Benefit No. 4: Keeping Tabs on Competitors

While the first three benefits of brand monitoring that I discussed focused on protecting and maintaining the value of a brand owner's own trademarks, this benefit turns its eye toward the trademarks of your competitors.

Traditional trademark monitoring techniques can also be used to monitor the innovations and marketing strategies of your competitors. Monitoring their trademarks, domain names and social media activity (in addition to your own) allows you to keep abreast of recent updates and future releases for their product/service lines, and also lets you know what strategies they are using--either effectively or ineffectively--to promote their brands. This, obviously, can be extremely valuable information.

In addition, monitoring competitors' trademarks can also turn you on to other, less direct references and comparisons to your brand. If a competitor makes reference to "the other guy" or "the green and orange brand," and "the other guy" or "the green and orange brand" is actually (and apparently) you, this is something you are probably going to want to know about.

While not indicative of trademark infringement, these references may be part of false or misleading advertising claims that you do not want to let go unchecked. However, these sorts of indirect references are likely to go undetected unless you are monitoring your competitors' trademarks.

Conclusion

In summary, trademark monitoring services are critical to protecting, enforcing and maximizing the value of your company's brands. A sound and comprehensive trademark monitoring strategy will allow you to:

• Spot and promptly address instances of actual and potential infringement;
• Promptly respond to consumer reactions and competitor representations online;
• Make sure distributors, affiliates and other licensees are making proper use of your trademarks; and,
• Keep tabs on the competition and identify indirect references to your company's products or services.

Armed with this information, your company will be better positioned to protect its interests and, ultimately, maximize the value of its trademarks when it comes time to sell.

This guest post  is provided for informational purposes only, and does not constitute legal advice. Always consult an attorney before taking any action that may affect your legal rights or liabilities.

Jeff Fabian is the owner of Fabian, LLC, a boutique law firm that assists business owners in protecting their brands so that they can stay focused on running their businesses. Visit eTrademarkSolutions.com for more information, or follow Jeff on Twitter @jsfabian.