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Why Trademarks Matter

Posted by Michael Peroff | Nov 19, 2021 | 0 Comments

                There was a story today in Forbes Magazine titled “The Future Of Internet Shopping Might Not Be Home Delivery”. The article was about a Polish businessman named Rafał Brzoska, and while the story was interesting, one quote caught my attention. Long story short, Mr. Brzoska had a business in Poland that was deeply in debt in 2016. While seeking out new investors, he made clear to potential investors his top priority – “I want to repay all of the bonds, all of the banks, all the people that have lent us money.” When the investors asked him why, he responded: “I want to live in this country, and you only have one name, one face.”

                That is a perfect summary of what a “brand” is, and why trademarks matter. Mr. Brzoska understood that his name had value in his community, and that value would be substantially and permanently damaged if he did not repay his debts. The “value” of his name is what is known as “good will” in trademark law. Therefore, in order to maintain the good will associated with his name, he could not possibly avoid paying off outstanding debts to those that trusted him enough to lend him money. If he was unable to pay off his debts, his name (i.e., his personal brand) would be ruined and he would forever be known as an untrustworthy individual in his community.

                Just as every person has 1 name, so too does every business have 1 name. The “brand” represents the good will that is enjoyed by the company in relation to the goods and/or services it provides to customers. As Judge Benjamin Cordozo once opined in a NY appellate case in 1926 captioned In re Brown: “Men will pay for any privilege that gives a reasonable expectancy of preference in the race of competition. …Such expectancy may come from succession in place or name or otherwise to a business which has won the favor of its customers. It is then known as good will.” (242 N.Y. 1, 150 N.E. 581, 44 A.L.R. 510). The “good will” resulting from business relationships is the life blood of every business, whether it is positive or negative. The desire and ability of a brand owner to protect that good will is why trademarks matter.

                It is also interesting that Mr. Brzoska didn't only want to protect his name, but his face as well. While the name of a person carries a reputational value or “good will”, so too does their physical image. In trademark terms, this is equivalent to having a logo – some type of sign or symbol that allows the public to identify the source of goods or services. In many cases, particularly in an era of social media and digital commerce, a company's logo can be just as valuable as the brand name because consumers often see the logo first before learning the brand name. Protecting one's name and image is the equivalent to protecting a brand's name and logo, and Mr. Brzoska is very wise to intuitively understand that.

About the Author

Michael Peroff

Michael A. Peroff is an Associate Attorney in the Chicago office of Peroff Saunders, P.C. Michael earned his Bachelor Degree in History from Indiana University, with a particular focus on music history.

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