This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Small Businesses Keep Copycats at Bay

The small toy business HandsOnToys applied for a patent shortly before launching Toobers and Zots. "We got imitated almost immediately by Wal-Mart (WMT - Get Report)," HandsOnToys Chief Executive Officer Andrew Farrar says. "We had filed for a patent, but it was still pending, and 'patent pending' doesn't protect you."

Wal-Mart sells a sleeved blanket called the "SnugMee," but those who care about branding know that this doesn't carry the cache of a Slanket (which has a registered trademark) or a Snuggie (which has a "TM" after its name).

By the same token, "Teva," which is synonymous with "outdoor sandal," is a registered trademark. Because Teva sports a patent for the sandal, parent company Deckers Outdoor (DECK) was able to score legal settlements with what it said were a slew of copycats, including Big 5 Sporting Goods (BGFV - Get Report) Wal-Mart and Kohl's (KKS).

A utility patent, which protects the technology and function of a product, or a design patent, which protects the aesthetics of a product, can be effective against bigger companies, says Jeffrey Schox, a patent attorney and founder of the Schox Patent Group in San Francisco.

"People often think of a bigger company walking over the rights of a smaller company," he says. "This happens, but if the patent rights are solid and the infringement is large, there are many law firms that will take on the case on a contingency-fee basis to protect the smaller company."

Entrepreneurs should decide whether their product is novel enough to warrant legal action. In Decor Craft's case, measured humility tells Kabessa that sometimes it's best to let it go. (That's what he decided to do when he recently saw a product similar to Decor Craft's Heart Measuring Cups in the bargain bin at Target (TGT - Get Report).

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BGFV $13.16 0.00%
DECK $72.45 0.00%
SBUX $95.08 0.00%
TGT $80.44 0.00%
WMT $81.89 0.00%


DOW 17,678.23 -40.31 -0.23%
S&P 500 2,056.15 -4.90 -0.24%
NASDAQ 4,863.3620 -13.1570 -0.27%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs