When it comes to choosing a name or a slogan, every good marketing type will tell you the same thing– pick something that conveys your message in a succinct, memorable way.
But if you’re a charity that’s thinking of using “for the cure” as part of your name/slogan, you may want to think twice.
According to an article today in the Huffington Post, the breast cancer charity, Susan G. Komen For the Cure has demanded that nonprofits using “for the cure” as part of their slogan or using its signature pink ribbons cease and desist from such activity. An older article from the Wall Street Journal provides additional coverage and puts the Komen situation in a larger context.
According to a spokesperson for Komen, the organization’s aggressive policing of its trademark rights is matter of responsible stewardship of donor funds. Other nonprofits using names such as “Juggling for a Cure,” “Bark for the Cure,” or “Blondes for the Cure,” might not agree. They’d argue that a name such as “Flying Kites to Raise Funds to Support Lung Cancer Research” doesn’t quite have the same ring as “Kites for the Cure.”
It remains to be seen what will come of these disputes, but the takeway point for nonprofits is that it’s important to be careful when choosing a name or slogan for an organization or event.
Regardless of how these disputes pan out, I have to say that I think Komen’s on to something– at least in so far as it recognizes the importance of trademark protection for nonprofits.
In addition to my trademark practice, I do a fair bit of work in the area of nonprofit law. Although there is no substitute for legal advice, and you should always consult an attorney if you have a specific question, it’s important for tax-exempt organizations to remember some unique considerations with respect to trademarks that don’t apply to for-profits. The following are some examples of IRS-specific rules that raise particular concerns, especially in instances where a nonprofit is generating significant revenue in licensing fees from its trademark(s):
- UBIT. The IRS levies an “unrelated business income tax” (“UBIT”) on income earned from activities regularly carried on that are not substantially related to the organization’s tax exempt purpose. Income derived from trademark licensing could, under some circumstances, fall into this category.
- Joint ventures. When developing licensing or co-branding strategies, nonprofits should be careful to avoid creating a “joint venture” which is regulated by the Internal Revenue Code.
- Private benefit transactions are those that benefit individuals to the detriment of the tax-exempt organization. Trademark licensing agreements should be constructed in a way that does not benefit an individual(s) to the detriment of the nonprofit.