The key to your company's success is its credibility. You may have the best product or service on the market, but if clients or consumers don't view your company as credible, they will not make the purchase. One way that businesses of all sizes attempt to build their credibility with prospective clients is to advertise their existing clientele on their website or marketing materials.
Using Your Clients' Logos to Build Credibility
Let's look at an example of how using a client's name or logo on your business's website could help you obtain new clients. Say that you are a kitchen cabinet company and manage to land a deal with a major entertainment corporation, like Disney, to provide cabinetry for a prototype display at one of the company's U.S. theme parks. This relationship would be a significant boost to your company and could sway new clients to buy from you. Psychologically, a new client might reason that if a brand like Disney purchased your product or service, that you must be a great business to work with and buy goods or services from. So how do you capitalize on your relationship with Disney? Your answer is to put your marketing team on it, of course.
Marketing Team Creativity
After a few days, your creative team returns with some ideas on how you can capitalize on your deal with Disney. They tell you that one of the quickest and cost-effective ways to let new clients know about your excellent reputation and credibility is to put up a list of your clients on your website. They present you with a design that says, "Our past and current clients include . . . " Next to the Disney name, your team displays the Disney logo. They do the same for your other clients and also make print marketing materials in the same vane. Now, when a prospective client or lead looks at your website, ads, brochures, etc. they will know that you are Disney-caliber, and will likely want to work with you. Your marketing team earned their pay on this one. Excellent job, right?
Trademark Infringement?
While you can applaud your marketing teams' efforts, they failed to analyze the potential legal ramifications of using your clients' trademarks on your marketing materials. But wait, you exclaim. Isn't the fact that the list and logos are indeed your clients? You are not misrepresenting anything. So what potential legal ramifications could exist?
Permission
Cutting to the chase, unless your team obtained permission from your clients to use their logos, you could be running the risk of angering your clients or even end up on the wrong side of a cease-and-desist letter. How could this happen?
Trademark Basics
It is important to have a basic overview of Trademark law. Trademark law protects distinctive words, phrases, logos, symbols, slogans, etc. used to identify and distinguish products or services from competitors. Your client's logos are their trademarks and are the intellectual property of their respective companies. In general, using or displaying someone's trademark without their permission is considered trademark infringement (even if they are your clients.)
When Can You Use a Trademark Without Permission
There are a handful of times when you can use a trademark without permission, but not merely because they are trademarks owned by clients that you service. The trademark infringement exceptions are limited to uses that educate, inform, or express opinions under the First Amendment of the Constitution. For example, if you were to create a blog post or YouTube video comparing Coke to Pepsi, you could likely use the logos without permission because you are expressing opinions that are protected by our freedom of speech. However, using your clients' logo on your marketing materials is not one of the exceptions to infringing use.
What Could Happen?
So what could happen if you display your clients' logos on your website or other marketing materials? The easy answer is that your client can sue you for trademark infringement. However, that rarely happens with an active client.
Active Clients
Active clients who are upset by your unauthorized use of their logo will usually either send you a cease-and-desist letter, call you and demand that you remove it, or even stop giving you business. Either way, you slice it, the result of your unauthorized use of a client's logo is that the relationship is likely damaged, sometimes beyond repair.
Former Clients
Clients with whom you no longer have a relationship are a different story. It is not uncommon for a former client, perhaps one that you parted ways with on bad terms, to sue you for having their logo on your website or marketing materials. In these scenarios, the former client is angry with your company and will demand monetary damages.
Wrap Up
Using your clients' names and logos on your marketing materials and websites can be an excellent way to boost your company's credibility. However, using the logos without permission constitutes trademark infringement and can result in the loss of clients or even a lawsuit. If you want to use your clients' logos, make sure to get their permission first. If you don't want to ask for permission, don't use the logo. Nothing will damage your company's credibility more than a publicized lawsuit for trademark infringement.
If you would like more information about this post or if you want to discuss your legal matter with an attorney at the Law Offices of Peter J. Lamont, please contact me at pl@pjlesq.com or at (201) 904-2211. Don't forget to check out and subscribe to our podcast and YouTube channel. We have hundreds of podcasts and videos concerning a variety of business and legal topics. I look forward to answering any questions that you might have.
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