By Jason Stearns, Attorney with Phelps Dunbar, LLP The climbing industry is extremely competitive. After all, this is an industry comprised of people that seek out obstacles for the sheer purpose of overcoming them. It should come as no surprise to learn that the climbing hold manufacturing industry is just as competitive. Whether the goal is to climb the ranks of CBJ’sGrip List™ or to come out with routesetters’ favorite new line of holds, new and established hold manufacturers alike are vying for a spot at the top. The million dollar question that every climbing hold company should be asking is what can be done to protect its intellectual property and maintain a competitive advantage in the industry? Is it the unique texture of the hold? Is it the quality and durability of the hold? Is it a particular design, shape, or color of the hold? Or is it the name recognition attached to a particular brand that propels a climbing hold manufacturer to the top? The reality is that all of these things matter. This article should serve as a checklist to help you navigate the treacherous intellectual property terrain that even the most fearless rock climbers dare not go alone — or, at least without some reliable “legal beta.” The primary focus of this article will be on establishing and protecting a company’s brand through the use of trademark law. Although the article focuses on the climbing hold industry, these legal issues impact all types of companies in the climbing industry — from gear manufacturers to shoe designers, and, of course, climbing gyms. In addition to trademark law, this article will also touch briefly on some other, more technical, applications of patent and trade secret law that companies should consider to protect their innovative technology and confidential information.

Protect your reputation

A trademark is a brand. Use of trademarks in commerce dates back to Roman merchants stamping their products with a symbol of the manufacturer to identify the source of the products. Put simply, a trademark (or “mark”) is nothing more than a word, group of words, or a symbol that distinguishes a good or service in commerce to assist consumers in making decisions about what to purchase and is an indicator of the known quality of goods or services. David Filkins, President of Element Climbing®, understands the value of the Element Climbing® brand and he explained why his company takes the time to invest in registering its trademarks with the U.S. Patent & Trademark Office (“USPTO”). “The Element Climbing name is everything to us—our customers know that they are going to get a great product every time, they know they’re going to get it quickly, and they know we’re available to answer any questions they have,” said Filkins. Although he recognized the importance of the brand, Filkins acknowledged that the trademark registration process was not as easy to navigate as he hoped it would be. Now, as a purely legal matter, trademark rights arise from use of a mark in a geographical territory in which it is used. Despite what many believe, there is no need to register the mark with the USPTO to acquire common law rights, which are the laws that were created by the courts, without government legislation. For example, if XYZ Company begins selling the XYZ climbing hold in commerce, the date of its first use of the mark (or brand name) will establish the date of its rights to use that brand. It’s that simple. A company wishing to put others on notice of its common law trademark rights should use the ™ symbol to market its goods and services. There are advantages, however, to registering the trademark with the USPTO. A federal registration with the USPTO will provide the following benefits: (1) constructive use (meaning that you might get credit for using the mark in the entire United States as of the date of the application), (2) constructive notice (meaning you get credit for putting other competitors on notice of your rights simply by using the ® symbol with your goods or services), (3) nationwide protection (meaning you get credit for selling the climbing hold in the entire United States), (4) incontestable status (meaning that the mark is immune from certain legal challenges), (5) recovery of additional money damages in a lawsuit against infringers, and (6) a presumption of validity of mark.

Trademarks in Three Easy Steps

So, how does a climbing hold manufacturer (or any climbing company for that matter) go about registering a trademark with the USPTO? If you aren’t going to hire a lawyer, as with almost everything—including climbing—the Internet is an excellent source of self-help guides. In the event you decide to traverse the DIY path, the best guide is the USPTO itself, which publishes a step-by-step process on how to register a trademark. See Trademark Process, United State Patent and Trademark Office. Here are some additional tips to at least get you on the right path. First, search the Internet (and any other climbing hold publication) for other uses of the mark you intend to register. After all, this is going to be your brand. Imagine investing thousands of dollars and months (or even years) of your time building your reputation and marketing your brand, only to find out that another company is selling a climbing hold using the same or similar brand name. The legal fees and costs alone could destroy your business. Another great resource is the USPTO Trademark Electronic Search System (TESS). Second, pick a strong mark that will be enforceable in the marketplace. Even if no one is using the mark, it doesn’t mean it is a good choice. Just as the nature and placement of the climbing holds in a route make some routes better than others, the distinctive nature of the words or symbols in a trademark make some marks superior to others. If the mark is not distinctive, either inherently or through the acquisition of secondary meaning in the marketplace (meaning that consumers begin attributing a particular phrase with a particular source of a product), then the mark will not be susceptible to the legal status of a trademark. For example, “generic marks” (the common term for a good or service) are, as a matter of policy, free for all to use and no one is to be given a monopoly on a generic name of a product. The law doesn’t allow generic marks to be trademarked for the simple reason that it would prevent competitors from describing their products. So, for example, a hold manufacturer should avoid choosing the mark “The Climbing Hold Company” to brand its company. On the other hand, “fanciful marks” (a combination of words or letters that have no meaning) are afforded the broadest possible protection and are an excellent choice for branding from a legal perspective. A hold manufacturer would be well-suited, from a trademark strength perspective, to choose the mark “EFG, Inc.” to brand its holds. Of course, EFG says nothing to consumers about the product so maybe it’s not a great choice for a new hold manufacturer looking to “make one’s mark” (this idiom refers to the time when artisans marked their wares with a symbol to identify the source). In between these two bookends of “generic” and “fanciful” marks, are what’s known as a “descriptive mark” (describes the good or services) and a “suggestive mark” (suggests the nature of the goods or services). The line between them is blurry, but examples of descriptive or suggestive marks in the climbing industry would be brands that use words like “climbing,” “hold,” “shoe,” “rope,” or any other term that describes the product. Descriptive and suggestive marks are not as distinctive and are far more susceptible to legal challenges. Just as it is unwise to start a climb without first checking your gear, a climbing hold manufacturer would be wise to consult a lawyer before investing in a trademark that may not be distinctive. Third, be sure to identify the correct goods and services to which the mark applies. There is an additional, albeit slight, cost for registering a trademark is multiple classes of goods, i.e., sporting goods, clothing, advertising. The USPTO website provides a link to the ID Manual for acceptable identification of goods and services, so be sure to check all that apply (e.g., Class 28 covers sporting goods, Class 25 covers clothing). Finally, know the date the mark was first used in commerce. Remember, the common law right to use XYZ on a climbing hold is born the date XYZ Company first uses XYZ to identify the particular climbing hold in the marketplace. That date remains important for—and is required to be provided in—the USPTO application.

Protect your technology

The climbing hold is far more intricate device that one—even an avid climber—might think. In just over 30 years, the climbing hold industry has evolved from pedestrian clay holds to more comfortable, elaborately shaped, and colorful polyurethane holds. According to Filkins, the goal of the modern day hold manufacturer is to make a hold “that balances durability with comfort in a way that allows climbers to spend more time in the gym without too high a replacement cost on the gym owners.” Placement and functionality of the holds are also of paramount concern. Climbers are seeking out more challenging and varied climbing routes, and gym owners and route setters try to keep pace with cost-efficient ways to vary the location and rotation of the holds. Success in the marketplace is tethered to innovation, and the hold company with the product that best serves the needs of both the climber and the gym owner will rise to the top. Perhaps most importantly, industry professionals want to know how to prevent others from copying the design of their holds. That question, unfortunately, remains entirely untested in the industry. Some might suggest using ‘trade dress’ (an offshoot from trademark law) to protect the size, shape, color, and texture of a climbing hold from unabashed competitors who have no problem ripping off someone else’s work. But trade dress must be primarily nonfunctional to be enforceable. This is not to suggest a dead end, but there may be a better route. Patent law, for example, exists to provide a limited monopoly to make, distribute or sell any inventive processes, machines, manufactured items, or composition of matter. For any invention to be patentable, it must, at its most basic core, be useful (meaning that it is operable), novel (meaning that it is new) and non-obvious (meaning that the invention would not have been obvious to another climbing hold manufacturer at the time of the invention). Patents have issued for quick connect climbing holds, artificial footholds for climbing practice, and even floating rock climbing walls. The only way to be sure whether a particular invention is patentable is to ask the question. Apart from patentable inventions, a climbing hold manufacturer, along with virtually every company in the climbing industry, will undoubtedly have trade secrets (or confidential business information) that it will want protected from disclosure. Trade secrets can be special formulas or other methods of manufacture, but they can also include customer lists, historical sales data, pricing, key contact persons, financial results, and marketing plans and strategies. Historically, trade secret law has been a matter of state law, but just this year the Defend Trade Secrets Act of 2016 became federal law. Under both state and federal law, however, there are some basic steps a company can take to protect its trade secrets. The first thing any company should do is evaluate and inventory its trade secrets (see list above). Once identified, the company should take affirmative steps to safeguard the confidentiality of its trade secrets. Generally speaking, a trade secret loses its value when it becomes no longer a secret. For example, XYZ Company’s customer list that includes names, contact information, purchase and pricing history should not be printed on a piece of paper and posted in the breakroom. XYZ Company may also consider entering into non-disclosure agreements (NDAs) with its hold manufacturers or other outsourcers if it has a proprietary formula or manufacturing process. XYZ Company might also consider entering into employment agreements with restrictive covenants (meaning restrictions on the employees’ conduct during and after employment) to the extent permissible under the applicable state’s law. Whether it’s a small garage start-up, rapidly expanding operation, or established business, the protection of trade secrets is critical in securing a company’s valuable, intangible assets, and should not be overlooked when assessing a company’s legal needs. At the end of the day, navigating the intellectual property terrain is not a simple task. Hopefully, this article sparks an interest in a continued dialogue about the various applications of intellectual property law to the climbing industry—and not just for climbing hold manufacturers, but gym owners and other climbing professionals alike. Jason Stearns is an attorney with Phelps Dunbar, LLP in Tampa, Florida. Jason practices in the area of complex commercial and intellectual property litigation and has litigated several patent, copyright and trademark infringement claims in federal courts throughout the country. In addition, Mr. Stearns often represents clients in various industries with regard to contract, antitrust, fraud, trade secret and other business disputes. If you have questions for Mr. Stearns contact him here. The content of this article is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. The reading of or reliance on this article or the Climbing Business Journal’s website does not create an attorney-client relationship between the author or the Climbing Business Journal and the user or reader.