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ENTREPRENEUR: an ordinary word or trade mark trouble?

ENTREPRENEUR: a person who starts, organizes, operates and assumes the risk of a business venture. Also a trade-mark registered by Entrepreneur Media Inc. in the United States and in Canada pertaining to printed publications and periodical reports, namely magazines and business reports as well as business related Web sites.

Entrepreneur Media Inc. («EMI») is a California based company who, since 1978, has published Entrepreneur magazine, a monthly publication geared towards small businesses and their owners. It also publishes other magazines, books, computer software and audio and videotapes. It participates in trade shows and seminars in connection with small businesses.

EMI also has a Web site with the domain names "entrepreneur.com" and "entrepreneurmag.com", where visitors can view on-line versions of Entrepreneur magazine, subscribe to the publication, interact with other visitors and learn about business opportunities. The site is used for marketing and advertising.

In 1987, EMI registered the term "ENTREPRENEUR" as a trade-mark in Class 16 (printed matters) and Class 9 (computer programs). In 1995, it registered the term "ENTREPRENEUR" as a service mark for trade show exhibitions, seminars and workshops. EMI also registered various trade-marks including the word "entrepreneur", such as "ENTREPRENEUR EXPO", "ENTREPRENEUR INTERNATIONAL", "ENTREPRENEURIAL WOMAN" and "ENTREPRENEURMAG.COM".

In 1995, Scott Smith started a public relations company for small businesses called ICON Publications. The company produced a yearly publication entitled Yearbook of Small Business Icons. In 1997, Smith decided to publish the Yearbook on a quarterly basis and changed the name of its company to "EntrepreneurPR" and the name of the publication to Entrepreneur Illustrated.

In 1998, EMI filed proceedings against Smith, alleging trade-mark infringement, unfair competition and counterfeiting under the Lanham Act and unfair competition under the California Business and Professions Code. In June 2000, U.S. 9th District Court, in a summary judgment, awarded $337,280 in damages to EMI and enjoined Smith from using the business name "EntrepreneurPR", the magazine title "Entrepreneur Illustrated" and the domain name "entrepreneurpr.com". Smith appealed the decision.

The 9^th U.S. Circuit Court of Appeals rendered its decision on February 11, 2002. The essence of the decision is that trade-mark rights cannot grant a monopoly over common, descriptive words. The Court of Appeals agreed with the district court’s finding of likelihood of confusion only as to the use of the mark Entrepreneur Illustrated on the cover of the printed publication. The Court reversed the grant of summary judgment and remanded the case to the district court. The Court of Appeals concluded on the record that EMI’ mark was weak, as it was descriptive of both the subject matter and the intended audience of the magazine and programs. It stated that the common and necessary uses of the word "entrepreneur" provided strong evidence that EMI could not have the exclusive right to use the word "entrepreneur" in any mark identifying a printed publication addressing subjects related to entrepreneurship.

On June 23, 2003, U.S. District Judge Florence-Marie Cooper ruled that Smith had infringed upon EMI’s trademark of the Entrepreneur name and ordered Smith to pay $669,656 in damages and interest, plus to-be-determined legal costs, which will be in the high six figures. Smith plans to appeal the decision.

What is now sometimes referred to as the "ongoing saga of the so-called David vs. Goliath" legal battle has raised a substantial interest in the small business community in the United States. Numerous articles have been written, forum of discussions have appeared on Websites. The decision has been qualified as devastating to small businesses and to their owners. The articles promote the free use of the word "entrepreneur", a generic word widely used without implying any association to Entrepreneur magazine or to EMI. They also indicate that a query on "How to become an entrepreneur" on any search engine on the Web will result in hundreds of thousands of hits. An "Entrepreneur Legal Defence Fund" has also been created.