When a multi-national corporation generating $54 billion (2018) goes after small business owners scratching out $150,000 for trademark infringement, it makes you wonder.
This is the case being played out between Caterpillar (the multi-national) and Cat & Cloud (the small business). The reason it is getting so much attention is because Caterpillar is the world’s largest construction equipment manufacturer. And Cat & Cloud is a coffee shop in Santa Cruz, CA.
So what is the infringement and what do coffee shops and construction equipment have in common? According to the owners of Cat & Cloud, Caterpillar has, “… embarked on a concentrated effort to cancel the registered trademarks of several small businesses that use the word “cat” in their names.”
It is important to note Caterpillar is also known as CAT and it is a registered trademark. Considering the U.S. is currently battling China on intellectual property infringement, the issue is no laughing matter.
However, when you see the logo for Cat & Cloud, the last thing on most anyone’s mind is heavy construction equipment or the Caterpillar’s CAT logo. But this is a moot point, because this small business has to respond to the allegations. And as a small business, it is an expense they can ill afford. So far Cat & Cloud has spent $10,000 on legal fees.
To that end, the owners of the coffee shop have started a GoFundMe campaign to raise the money they need.
The Specifics of this Trademark Infringement Example
Caterpillar is looking to cancel the trademark registration of the CAT & CLOUD brand based on “likelihood of confusion.” This is an actual term for the basis for trademark infringement.
Caterpillar is alleging the Cat & Cloud logo on clothing and footwear is confusingly similar in the market place.
According to a statement posted on FastCompany, Caterpillar said, “We are not suing Cat & Cloud, not targeting a small business and not focused on Cat & Cloud’s primary interest: coffee. We’ve simply asked the U.S. Trademark Office to remove Cat & Cloud’s trademark registration on footwear and apparel only, products for which Caterpillar has longstanding trademarks and a considerable business. We hope to resolve this issue quickly.”
To be fair, Caterpillar has been using this trademark for decades, so it has the right to defend itself. The company is standing firm, insisting customers are likely to confuse the Caterpillar brand with the source of Cat & Cloud’s coffee-centric merchandise.
Beyond the letters C-A-T, there doesn’t appear to be any similarity. But that is for the United States Patent and Trademark Office (USPTO) to decide.
Lesson for Small Businesses
When you are ready to trademark your brand, make sure to conduct a thorough search to ensure no one else is using it. This is a lengthy process, but one which requires due diligence so you won’t get sued later on.
But as the case with the Caterpillar and Cat & Cloud trademark infringement example illustrates, the perceived similarity can be subjective. And it can lead to a costly legal proceeding, which can put a small business out of business.
Image: Cat & Cloud
People can sue anyone for this and if they end up winning, they get a lot of money out of it. Such is the world of intellectual property.
Big companies have armies of lawyers. The process on this type of action should be simple and straightforward enough that even a non-legal person could respond (without spending $10K on legal bills). This is as much a condemnation of our legal system as anything. Because really, why can’t the coffee shop just reply with a quick 1-pager explaining their position and then have a judge (or other decision maker) read the 1-pager from both companies and make a decision.