Starting a company is no easy task. I think one of the hardest things is making a name for yourself when starting from scratch. How do you stand apart from your competitors and attract customers? This is where trademarks come in. As you’re building your company’s brand, you’re really building your trademark.
Last night, I read an article from LA Times about David Tran, the creator of now very famous condiment, Sriracha. Everyone knows what Sriracha is. Mix it with mayo, and boom, you have spicy mayo. Mix it with ketchup, and boom, you have spicy ketchup. It goes with pretty much anything and everything. Add a little, add a lot, this thing is addicting as versatile.
The LA Times article talked about how David never trademarked the name “Sriracha,” (which is actually named after a coastal city in Thailand). Without a trademark, everyone, including his competitors, is now using the word “Sriracha.” It’s now used so much that it is a genericized term that can no longer be trademarked by itself. When asked why he never trademarked the name, and why he is so reluctant to prevent other people from using the word “Sriracha,” David responded that he didn’t think “Sriracha” could be trademarked because it is named after a city in Thailand, and he is fine with other people using the word “Sriracha” because it gives him free publicity.
A couple of things about David’s response… First, David probably would have been successful trademarking “Sriracha” for a hot sauce because the word “Sriracha” as used for a hot sauce is arbitrary. In contrast, if he was trying to trademark “Sriracha” for something actually related to the City of Sriracha, he would not have been very successful because it would have been descriptive at best.
Second, and more importantly, I think David’s response reflects what many people commonly misunderstand. I always tell my clients that there is a fine line between free publicity and liability. If others are using your trademark in a way that you can’t control it, then you’re prone to liability and probably infringement. Your trademark can be used in a way that you did not intend, and when this happens, it can ruin your company’s reputation and affect your business. Not only that, but you will have to do some damage control and spend time and money on rehabilitating your brand, rebranding, and/or legal actions.
David was lucky to not be negatively affected by others using his name, and he seems to credit that by assuming that consumers continue to identify “Sriracha” with his original hot sauce. But will this still be the case years down the road? Think of Otis Elevator Co.’s “escalator” and Bayer AG’s “aspirin” for example. I bet you no one will associate the word “escalator” now with Otis Elevator Co. Similarly, no one thinks of Bayer AG when buying aspirin. Perhaps David’s days of free publicity is numbered too.
With that said, I don’t think that David will go out of business anytime soon, given his success thus far. But I think he would have been even more successful if he had trademarked “Sriracha.”