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on Hedge Fund Trademarks

I was cruising through our archives today and found this valuable article on hedge fund trademarks, which is worth a read if you haven’t thought about trademarking your hedge fund.

Trademarks are invaluable assets. They are the primary means through which most companies identify themselves to the public, and the primary means through which the public identifies and distinguishes one company from another. Yet many hedge fund managers do not register their trademarks with either the United States Patent and Trademark Office or the trademark offices of other countries in which they conduct business. By failing to register their trademark rights, hedge fund managers are potentially losing out on some important benefits they would otherwise enjoy and in some cases may even be risking the loss of their trademark rights. Since trademark applications can be filed both before and after a hedge fund has launched, even managers of active funds who have not yet registered their trademarks should give serious consideration to filing a trademark application. Below we briefly discuss what a hedge fund trademark is and the factors fund managers should consider in deciding whether or not to register their hedge fund trademarks.

What is a trademark and why are trademarks important to hedge fund managers?

A trademark is generally a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies the source of a product or service and distinguishes the source of that product or service from the source of other products or services. In the case of hedge funds, the fund’s trademark is frequently the same as or comprises a portion of the fund’s name. For example, in the case of a hedge fund where the investment manager is ABC Capital Management, LLC, the general partner is ABC Capital, LLC, and the fund is ABC Partners, LP, the mark ABC may be considered the hedge fund’s trademark, since it is by this portion of the fund’s name that the fund is recognized by the public.

Establishing valid trademark rights is important because owning valid trademark rights entitles the trademark owner to prevent third parties from using the same or a confusingly similar mark for the same or related goods or services to those of the trademark owner. This can prevent the public from being confused between two or more funds with similar names or marks. Although hedge funds are generally precluded from advertising, and relationships with investors are developed primarily through personal connections, confusion can and frequently does arise through external sources. As one court noted in finding trademark infringement where both parties were in the investment business: “High-level investment business is commonly conducted based on trust and personal relationships among individuals. If any investor reads about a [Defendant] investment … and mistakes that transaction for a [Plaintiff] investment of which it was not aware, it may well feel ‘cut out’ of a potential lucrative deal. … [I]ts business relations with [Plaintiff] could be soured.” Morningside Group Ltd. v. Morningside Capital Group, L.L.C., 182 F.3d 133, 140 (2d Cir. 1999).

Click here to read the full story on Hedge Fund Trademarks

Trademark registration can provide fund managers with valuable benefits. If you have any questions about trademark registration, please contact Beth Alter at Seward & Kissel’s Intellectual Property Group at (212) 574-1427 or alter@sewkis.com.

About Aaron Wormus

Aaron Wormus works as the Managing Director of Website Creation at HedgeCo Networks and has worked with HedgeCo since the end of 2004. Prior to working with HedgeCo Networks, Aaron managed a private consulting firm based in Frankfurt, Germany. During this time he worked implementing back-end systems for clients ranging from telecommunications companies to mining companies and Silicon Valley software distributors. Aaron Wormus is a published author who has studied Information Technology and Journalism in Finland. His written work has been published in various technology magazines, translated into 5 European languages, as well as published book. Aaron regularly speaks at PHP Programming conferences, and is involved in the organization of his local technology user group.
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