Hyperlocal Sites Must Win Customers’ Hearts With Strong Brand Identity

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Having a distinctive brand name is crucial to building a business. Unfortunately for Papa Ads, Inc., the hyperlocal advertiser’s web site iShopStark.com‘s brand was not strong enough to protect itself against the upstart “StopNStark.com,” a federal court ruled in Ohio on June 13, 2012.

Brand names act like adjectives. They tie the source of the product with the provider of goods. For example, think, “Tide” brand detergent, “Honda” brand cars or “BMW” brand cars. Names such as Honda and BMW help consumers distinguish one type of automobile made by one manufacturer compared to another. When you use your brand name, you want customers to think of you as the source of the product, not a competitor.

Hyperlocal advertiser Papa Ads, Inc. launched “iShopStark.com” in 2007 in Canton, Ohio.  It offers product reviews, price comparisons, and coupons in the Stark County metro area. In 2010, Gatehouse Media, owner of Copley Ohio Newspapers, launched ShopNStark.com in the same area, offering the same services as iShopStark.

Papa Ads sued Copley, claiming that the new site infringes Papa Ads’ brand name and is causing confusion among the public. State and federal laws protect businesses’ brands when another business uses a similar brand name to confuse and poach customers. Papa Ads never registered its trademark with the United States Trademark Office. Papa Ad filed under the federal Lanham Act, which protects businesses against the unfair deceptive trade practices against other business that may use a similar brand name to confuse the public for similar goods or services.

Papa Ads had one problem, however. Apparently its brand did not become distinctive enough to prevent Copley from entering into the same hyperlocal ad space with its “ShopNStark” name. The matter went up for appeal, before the United States District Court in Cincinnati. The Court noted that Papa Ads had to show Papa Ad’s trademark deserved protection, and then show that Copley’s use of “ShopNStark” caused confusion among the public. Papa Ad was unable to cross the first threshold.

The Court of Appeals noted that Papa Ad’s “iShopStark” was associated with a geographic area, namely, Stark County, Ohio. Copley’s use of ShopNStark similarly described shopping information for those located in Stark County. Where Papa Ads failed was that it only could show that consumers identified “iShopStark” with services in the Canton area, rather than a product uniquely identified with Papa Ads, a concept known as “secondary meaning.” A secondary meaning “no longer causes the public to associate the goods with a particular place but to associate the goods with a particular source,” the court ruled.

Hyperlocal sites must get consumers to associate their brand names with their business, and not merely focus their brands as being associated with a geographic territory. Such efforts may include a strong logo and unique name associated with the brand, promoting the brand aggressively over time and including aggressive advertising. If a hyperlocal has the financial means, seeking registration with the United States Trademark Office and state trademark filings. Although hyperlocals’ brands depend on capturing a geographic territory, they also need to capture the hearts of their users.

Brian Dengler is an attorney with Vorys Legal Counsel and journalist who covers legal issues in eMedia. He is a former vice-president of AOL, Inc., a former newspaperman, and an EMMY-winning TV journalist. He teaches new media issues as an adjunct at Kent State University and formerly at Otterbein University.