Suppose that two businesses have similar sounding names. The similarity is confusing to customers or could be down the line. One of the businesses decides to do something about it. How can they engage in a successful dispute-resolution negotiation process?
Two recent conflicts over business names went in different directions. First, a public dispute broke out last year between blogger and writer Bunmi Laditan, creator of the satiric blog and book franchise “The Honest Toddler,” and the Honest Company, an eco-friendly baby-products brand owned by actress Jessica Alba. Laditan started the Honest Toddler in 2012 as a Twitter feed, ostensibly run by an incorrigible youngster offering unsolicited parenting advice. Laditan filed a trademark application for the Honest Toddler name in September 2012. The Honest Company, which also launched in 2012, purchased the Internet domain name honesttoddler.com in March of that year.
Back in 2013, the Honest Company reportedly offered to help Laditan cancel her trademark application for rights to the name The Honest Toddler. When she declined, the Honest Company formally opposed her application.
Laditan took the dispute viral, rallying her thousands of Facebook and Twitter fans to the cause, which she portrayed as a David vs. Goliath battle. The Honest Company’s claim that her trademark would lead to marketplace confusion was baseless, she said: “I don’t want to create lotions. I’m a writer.” She argued that losing the name the Honest Toddler would jeopardize her brand.
The two parties reportedly quietly resolved their dispute in August 2013 for undisclosed terms. Laditan continues to use the name “The Honest Toddler” and now uses the domain www.thehonesttoddler.com. The negative publicity may have motivated the Honest Company to drop its opposition to Laditan’s trademark application.
In contrast to this contentious dispute, the New York Times recently presented a “case study” of the name confusion between Hobby Lobby International, a Tennessee-based company that since 1964 has made and sold remote-controlled toys, such as airplanes and boats, and Hobby Lobby Stores, incorporated in 1972, is the nationwide chain of 600 art-and-craft-supply stores.
Customers often confused the two companies, according to Hobby Lobby International owner Mark Cleveland, who bought the company in 2009. But it was only after Hobby Lobby Stores made headlines with a lawsuit against the Affordable Care Act’s provision that employers cover their employees’ contraception that Cleveland decided it was time to confront the problem.
In 2012, he delivered an ultimatum to Hobby Lobby Stores CEO David Green: get out of the hobby business or compensate Hobby Lobby International for the costs of rebranding. Cleveland says he was ready to follow through on a lawsuit if Green didn’t respond, but that wasn’t necessary.
The parties engaged in a series of meetings in which they discussed trademark law and the value of Hobby Lobby International’s brand. In late 2013, Hobby Lobby Stores agreed to pay Cleveland’s company an undisclosed amount for the Hobby Lobby brand and associated assets. Hobby Lobby International is now known as Hobby Express but was able to keep its logo with minor tweaks.
Cleveland attributes his successful outcome to finding “the right attorney,” a process he says took “years.” Prior to meeting his lawyer, Carter Todd, in 2013, Cleveland says he had difficulty finding someone who was credible but not combative. “I wanted a resolution,” he says.
He also credits Hobby Lobby Stores for enabling a collaborative outcome. He said he became willing to give up the fight for his company’s name when he realized his counterparts across the table were treating him fairly and honorably. “At that point, the smart guy says, ‘I’m going to work with them,’” Cleveland told the Times.
In the end, both the “Davids”—Laditan and Cleveland—appear to have reached satisfactory outcomes to their claims. As for the “Goliaths,” the Honest Company took a hit to its reputation, while Hobby Lobby emerged unscathed. The lesson? In dispute resolution, try to keep the conflict private whenever possible, and look for opportunities to demonstrate your integrity with the goal of winning your counterpart’s trust.
How have you changed the negotiation game to achieve a win-win scenario?
Both cases brilliantly demonstrate the importance of compromise in dispute settlements. There is the tendency to grandstand when either or both parties think they have an iron-cast case. Often, grandstanding costs much more than money as the Honest Company harshly found out.