A recent filing by Amazon shows how something as straightforward as a trademark application can be a tool that moves stock markets and affects the behavior of competitors. A trademark filing can be a strategic tool to help advance your company’s position in the marketplace.
On July 6, 2017, Amazon Technologies, Inc. (a subsidiary of Amazon.com, Inc.) filed an application with the United States Patent and Trademark Office (USPTO) to register WE DO THE PREP. YOU BE THE CHEF. as a trademark for several types of goods and services, including “prepared food kits.”
This filing, along with Amazon’s recent purchase of Whole Foods, sends a strong signal that Amazon intends to dominate the market for food much as it does for books and many other categories of consumer goods.
Blue Apron is a competitor in the prepared food kit space. They took their stock public on June 28 – meaning, Amazon filed their trademark application just about a week after Blue Apron’s stock began to be publicly traded.
As news of Amazon’s trademark application spread, the value of Blue Apron’s stock fell by 11% on one day. Investors seemed to be concerned that Blue Apron would be unable to compete with Amazon, given the online retail giant’s newly-acquired food distribution network (aka Whole Foods).
What lessons can be learned from this move? You don’t have to be the size of Amazon to use trademark filings to your strategic advantage. A trademark filing can warn off smaller or newer competitors. It can serve to stake your claim to a certain space – meaning, investors may not be interested in funding your competitor if they think you’re going to get there first, or do a better job serving your customer base. These lessons hold for both b-to-c (business to consumer) and b-to-b (business to business) companies.
One note of caution: when filing a USPTO trademark application for a product or service that isn’t yet on the market (called an “Intent-to-Use” application), the applicant must affirm that it has a bona fide intent to use the trademark in connection with specific goods or services in interstate commerce.
This means that one shouldn’t simply file a trademark application every time you come up with a new brand name or business idea. You must be taking some affirmative action to move the project forward. This may include R&D, product design, or market research, among other things. Be sure that these steps are documented in case your application is ever subject to a legal challenge.
So – if you’re moving forward with a potential new product or service, ask yourself “What would Amazon do?” and consider a strategic trademark filing.