Branding 101: What You Can Learn From RUN DMC's $50 million dollar lawsuit against Walmart & Amazon.com
Last week, Run-DMC made headlines because their company, RUN-DMC BRAND LLC filed a $50 million dollar trademark infringement lawsuit against Walmart, Amazon.com, and a number of other companies. The lawsuit alleges that these companies (the defendants) are illegally using the RUN-DMC brand and trademark by selling unauthorized products like the following:
The lawsuit's complaint (a complaint is what you call the legal document you file in court to outline how you've been wronged) is pretty straightforward. It basically says that products like the ones mentioned above are likely to confuse purchasers into thinking that they are connected to the RUN-DMC brand. It also says that these uses "dilute" the famousness of the RUN-DMC trademark and harm the rap group's business.
In reading through all of this, it seems that RUN-DMC, unlike some other artists, have taken many of the appropriate steps to protect their brand. I thought it would be useful to share some of the best takeways, complete with screenshots of the actual complaint filed by RUN-DMC. You can also read the full complaint by clicking here or in that earlier link.
#1 SEPARATE YOUR BUSINESS FROM YOUR PERSONAL
Notice that this lawsuit isn't being filed by Joseph Simmons (Rev. Run), Darryl McDaniels, and the estate of Jason Mizell (Jam Master Jay). It's being filed by their LIMITED LIABILITY CORPORATION.
Incorporating can save you soooo many headaches down the line, even if you're a one woman (or man) operation right now. It protects your assets, protects you from liability, provides tax benefits, and just makes you more credible (among other things). Create a real business for your brand.
At minimum, you can:
- Incorporate with your state’s secretary of state.
- Get a federal tax ID number.
- Figure out your state and local tax responsibilities.
- Open a separate business bank account.
There are other steps, but this will get you started and place you ahead of many. And, it shouldn't cost you too much money.
#2 PROTECT YOUR BRAND
RUN-DMC filed its trademark application for the RUN-DMC words and logo in 2004 (some years too late, in my opinion, seeing that they were founded in 1981). Because the trademark distinguished them from others in the marketplace, their application was successfully registered with the United States Patent and Trademark Office.
Registering this trademark gives them a monopoly over the categories listed in the registration, including music, entertainment and clothing. With some limited exceptions, this registration gives them the legal right to stop uses that they don't approve. They probably spent a few thousand bucks on this (if that). This is why, 13 years later, RUN-DMC can file a solid $50 million lawsuit.
What do you use that distinguishes you from your competitors in the marketplace? Do you have a brand name or logo? Do you use the same slogan each time? These things that make your brand unique could be protectable as trademarks. If they are valuable to you, consider taking the necessary steps to protect and own them.
#3 EXPLOIT YOUR BRAND
There's one paragraph in the complaint that made me say WOW - this one:
Yes. Their trademark has made them MORE THAN ONE HUNDRED MILLION AMERICAN DOLLARS. Not bad for three kids from Hollis, Queens.
According to the complaint, they did this not just through music, but through publishing, concerts, merchandising, and endorsement/licensing deals. These things, of course, stem from the music, but note that they are at least partially (or in some cases fully) passive income generators. Once the song is made, the photos are taken, or the videos are shot, much of what's left to do is cash the many checks that may come your way.
Exploiting your brand through these means can be lucrative. After My Adidas came out, the million dollar endorsement deal that RUN-DMC received from Adidas was the first such deal between hip-hop artists and a major corporation in history. RUN-DMC has both pioneered and perfected the art of brand exploitation.
Entrepreneurs, you have to make your brand work for you. How are you exploiting your brand? Meaning, what avenues are you using to generate income? Are there other things you might want to pursue? If you take step #2 and protect/own your brand and trademarks, these opportunities can open up to you in ways you may not have considered.
#4 ENFORCE YOUR BRAND
RUN-DMC has been in the game for along time. They aren't usually the little guy by any stretch of the imagination. But, compared to Wal-Mart Stores, Inc. (which had revenue of $482.13 billion in 2015) and Amazon.com (which had revenue of $107 billion in 2015), their $100 million can look kind of...puny.
Even so, Run-DMC isn't afraid to enforce what they have worked for +30 years to protect, even against corporate giants. They are stepping up to the big boys. And, from the outside looking in, they are probably headed for a good payout.
In terms of what RUN-DMC wants for their trouble, they request:
- an accounting to find out how much money each defendant made off of all sales using the RUN-DMC trademark in any form,
- a temporary restraining order and a permanent injunction to stop sales of infringing RUN-DMC related products,
- $50 million, with interest,
- Attorney's fees, and
- anything else the court would like to give them.
The lesson here is that, if you find out someone is using your trademarks illegally, don't be afraid to call them on it. This could seem like an uphill battle, and it probably is in some cases. But, enforcing your trademark is the only way to ensure that you can continue your sole ownership of it.
In the internet age, it may be tough to find out if someone is illegally using your trademarks. One of the best things you can do for your business is set up Google Alerts for your name and other words associated with your brand. You’ll get regular emails when those words pop up on the internet.
RUN-DMC achieved meteoric success while breaking down barriers and opening the doors for all kinds of folks. Their complaint notes that they were the first rap group to reach a number of accomplishments, including:
This trademark lawsuit is one example of the many things we can learn from RUN-DMC. You can use these lessons to make your brand and business stronger.
"Learn the rule, knowledge the fuel - the brain the tool." - Run DMC, Living In The City