State officials look to eliminate a costly trademark loophole
Rick Simone and John Velez’s dorm room at Johnson & Wales University in
Providence was in Renaissance Hall. It’s the place they conceived of one day
owning their own restaurant in the “Renaissance City,” so what better name for
a restaurant than Café Renaissance.
“We filed the paperwork with the secretary of state’s office to register the name (in 2000). We got the approval letter, all the required paperwork and thought everything was all set. We weren’t even open a week when we received a letter asking us to stop using the name,” said Simone.
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Little did they know, businesswoman Bernadette Cicione trademarked the name Renaissance Café, which she was operating in Warwick.
Her name was trademarked in the secretary of state’s office, but was not listed in a separate corporate database.
With their hearts set on the Renaissance name, Simone, Velez and their three other business partners decided to take their chances in court to keep it. They lost.
Officials from the secretary of state’s office said the mistake likely occurred because the office is only required to check the corporate name database to clear its use. The state is not required to check trademarks to clear corporate names.
Cases like the Renaissance have prompted the secretary of state’s office to begin investigating ways to improve the state’s search system.
Some states have created computer and Internet-based trademark name databases that can be used to cross-reference corporate names to avoid overlap. Massachusetts, for instance, will make a trademark database available starting in July.
Secretary of State Matthew Brown said he is familiar with the case, which occurred before his administration took office, and he is working to prevent similar problems from occurring in the future.
“We are in the very first stage, looking at all the possibilities and trying to find the best, most advanced technology,” said Brown. “We want to do everything we can to prevent this type of thing from happening.”
Brown said it is too early to tell when any changes to the system will begin.
In the case of Café Renaissance, the legal battle cost Simone and Velez more than $10,000. Cicione said she also spent more than $10,000 to protect her trademark.
Temporarily, Simone and his partners painted some clouds over the first two letters of the sign above the door at 242 Atwells Ave. and left the restaurant “Naissance.”
Earlier this month, the “Re” was painted back on after the partners reached an agreement with Cicione.
Cicione closed Renaissance Café in the Pontiac Mill in Warwick last year and relocated to 294 Atwells Ave. in Providence as Ocean State Chocolates. The business owners, now neighbors on Federal Hill, made amends and Cicione agreed to sign the Renaissance trademark over to Simone and Velez.
Cicione did not charge an exchange fee for signing over the name. Instead, the restaurant has agreed to buy Cicione’s chocolates on a regular basis.
“She brought our dream back,” Simone said.
Simone and Velez officially opened as the Renaissance Café with entirely new décor on May 11.
Possible confusion
David Lowry, a registered patent attorney at Brown Rudnick Berlack Israels in Boston, said corporations could run into problems if they use their corporate name for their products.
“It doesn’t happen that often. What it boils down to is more than one business can have the same name, as long as the goods and services are different,” Lowry said.
Businesses organized as a corporation have to file the name they want with the secretary of state’s corporations division. The division reviews the names of existing corporations, limited liability companies and limited partnerships in Rhode Island before approving the name. The office does not have to check the names of “Doing Business As” businesses – which are smaller and tend to be local – or trademarks, secretary of state spokesman Peter Kerwin said.
If someone is “Doing Business As” a certain name and they don’t incorporate, the name of their business will not appear in the secretary of state’s search, said the director of corporations from the secretary of state’s office Sandra M. Williams.
“Corporations register with the state, and DBAs file in their local community. The vast majority of states do not expand a search of available names to include DBAs because of the logistical problems involved with that,” Kerwin said. “In the case of Rhode Island, those records are maintained on separate databases.”
Some communities don’t even maintain the DBA records electronically. The communities and the state are not linked electronically, so conducting a search through each separate community DBR listing would be extremely time-consuming, Kerwin said.
“It would also severely limit the pool of available names. Most states have recognized that because corporations and DBAs are different entities, they should not be treated as equal for the purpose of name availability,” he said.
There are 55,000 active DBA entities in the state and approximately 8,000 registered trademarks, Kerwin reports.
Avoiding conflicts
When Cicione opened her new business, Ocean State Chocolates, in November 2003, she did her own Internet search to make sure the business name she wanted wasn’t taken. She registered her new business as a corporation and trademarked the name with the help of a lawyer.
“The secretary of state’s office is supposed to do a search to make sure no one else has the name. If they aren’t doing a trademark search, what are they charging for?” Cicione said. “There should be a grand database of trademarks to keep this from happening.”
Similar to Rhode Island, in Massachusetts, people who register a trademark with the state have a card on file, much like a card catalog in a library. When someone applies for a trademark, a clerk will sift through the cards looking for a similar use of the name, but mistakes do happen, and similar names are sometimes given trademarks, Massachusetts Trademark Clerk Wayne Malcolm said.
The state does not cross-reference check corporate name filings with trademarked names either, but will be able to when the trademark database is completed this July, Massachusetts secretary of state spokesperson Brian McNiff said.
“States are starting to become more sophisticated about this, and certain states are starting to make trademark databases available,” Lowry said. “There are ways consumers can avoid problems. There are Internet search databases, the U.S. Patent and Trademark Office database, and there are lawyers who can do both. Businesses that want to extend beyond state lines should go directly to the federal database.”
An Internet search revealed only a few states already use a Web-based trademark filing system, including Tennessee, Maryland and Georgia.
Other states, like North Carolina, have a computer-based trademark database that is not available via Internet. There are also a number of independent Web sites, like Trademark.com, that allow people to search comprehensive U.S. federal and state trademarks, extensive Common Law files and Canadian records for a fee.
