Legal Risks And Dangers Of $99 Logo Stores

When you’re starting a new business, you have alternatives when purchasing a logo for that business.

If you’re comfortable picking from several concept designs, you could work with a local designer.

You could crowdsource your custom logo design project on crowdspring to our community of 220,000+ designers, work with several dozen designers at one time during your project, and choose your favorite memorable logo design from an average of dozens of unique designs.

You could buy a generic logo template for a few dollars and add your business name. Or you could buy a “ready-made” logo for $99 (or cheaper) at an online “logo store” and have them add your business name.

Here’s why you should run from generic templates and $99 logo stores: generic templates and ready-made logos sold by logo stores are purchased by hundreds of other businesses (this is also one reason you should avoid buying logo designs with generic design elements).

Generic templates and generic $99 ready-made logos bought by multiple buyers expose you to legal and business risks and are worthless.

Trademark law prevents businesses from operating under names – or using logos – that are likely to be mistaken for an existing competitor’s name or logo. The U.S. Patent and Trademark Office defines a trademark as:

any word, name, symbol, or device, or any combination, used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods. In short, a trademark is a brand name.

A service mark is similar to a trademark – but it’s used to distinguish one provider’s services from services provided by others (and to indicate the source of the services).

Some people assume that if a logo is protected by copyright law, it is also protected under trademark law.

This is untrue.

A logo might be protected by copyright law, but it is not covered by trademark law unless used in commerce.

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This is because trademark rights arise only through the use of the logo in interstate or international commerce (such as when you offer items for sale and incorporate the logo in your marketing materials or on your products).

For a brief primer on copyright law, I recommend you read Small Business Legal Issues: Copyright Basics.

You are not required (at least in the United States) to register your trademark or service mark with the trademark office. You can acquire “common law rights” simply by using the logo in commerce.

However, to successfully assert common law rights, you must show that your logo has become a distinctive identifier associated with your business or your goods or services. It’s impossible to make this showing if you’re using a logo that is also used by dozens, hundreds, or thousands of other businesses who bought the same ready-made logo.

Similarly, if you attempt to register for trademark protection, a generic logo used by many other businesses, your trademark registration will likely be refused.

Importantly, if another company – particularly one in your industry segment – is already using a very similar or identical logo based on the same generic ready-made template, you risk being sued for trademark infringement and exposing yourself – and your company – to high legal costs.

Because of these legal and business risks, crowdspring has a zero-tolerance policy concerning the use of stock art in logo projects. We require each participating designer to disclose each time they submit a logo design that everything in their design is their original work (except perhaps the font, which may or may not need to be purchased separately).

You might wonder why you should care. After all, you could buy another generic logo if the first one doesn’t work out.

You can. But, the logo is an essential element of your company’s brand identity. Having invested time, money, and resources in your branding, you’ll find it both challenging and risky to change your brand suddenly. Rebranding can be a great way to evolve an existing brand, but you should not assume that rebranding is cheap or quick.

What should you do to protect yourself and avoid these legal and business risks? Run from generic templates and logo stores selling generic ready-made logos to multiple buyers.

It’s worth repeating: generic $99 ready-made logos bought by multiple buyers expose you to legal and business risks and are worthless.

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You have alternatives when buying a logo design. Pick an option that creates a unique identity and a cornerstone of your brand.

Generic ready-made logos purchased by numerous other businesses cannot do this for you and will merely expose you to unnecessary legal and business risks.

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