The Challenge of Trademark Registration for Small Businesses

Many platforms, including Shopify, Stripe, and WordPress, have democratized access to crucial business tools. These tools facilitate storefront operation, payment processing, and website construction, even for companies operating with limited financial resources. However, establishing a company still involves certain costly and time-intensive procedures that can prove prohibitive for smaller enterprises – and neglecting these can lead to business failure before it truly begins.

Heirlume: A Machine-Powered Solution

Trademark registration is a significant concern in this regard. Toronto-based startup Heirlume recently secured $1.7 million CAD (~$1.38 million) in funding to address this issue. They are developing a machine-powered platform designed to simplify the trademark registration process, making it self-service and affordable.

Heirlume’s AI-driven trademark search identifies potential conflicts with existing trademarks in both the U.S. and Canada. This capability extends beyond the reach of standard government search tools and even some prominent legal firms.

Leveling the Playing Field

The core mission of Heirlume is to create a more equitable environment for small business owners. Historically, these owners have been at a disadvantage when facing trademark disputes.

“I’ve spent over a decade practicing as a senior-level IP lawyer, both in a boutique firm of my own and serving large multinational corporations,” explained Heirlume co-founder Julie MacDonell. “I frequently assisted small business clients dealing with cease-and-desist orders or infringement issues. It’s those clients who truly resonate with me. Witnessing a small business owner in distress, having lost their brand or business overnight, is heartbreaking. Often, there was little I could do to help, as the law simply didn’t favor them due to a failure to register their trademarks.”

The Importance of Trademark Ownership

MacDonell emphasizes a widespread lack of understanding regarding trademark registration. Entrepreneurs often prioritize securing a domain name, investing significant funds in the process. However, they fail to recognize that a domain name is essentially a lease. Without a corresponding trademark, the actual trademark owner can potentially reclaim the domain.

Even when business owners acknowledge the need for a trademark, substantial obstacles remain in securing one.

“There was a significant and often insurmountable barrier to brand protection for these business owners,” she stated. “Unlike other business services like incorporation or insurance, brand ownership remains largely inaccessible and unaffordable.”

Affordable Trademark Registration

Heirlume dramatically reduces the cost of trademark registration, bringing it down to under $600 for the first registration and $200 for each subsequent one. The startup also offers a “buy now, pay later” option through Clearbanc, enabling even startups with limited capital to protect their brand from the outset.

Free Trademark Search and Machine Learning

Currently, Heirlume provides its core trademark search feature free of charge. This search engine covers both U.S. and Canadian government databases, not only indicating trademark availability but also assessing the likelihood of successful registration, considering potential conflicts overlooked by standard search portals.

The platform utilizes machine learning to identify these potential conflicts. This not only benefits users searching for trademarks but also streamlines internal processes, reducing costs and allowing Heirlume to pass those savings on to its clients. This approach can yield superior results compared to traditional firms, achieved at scale and at a lower price point.

Addressing Government Backlogs

Machine-powered data processing and filing offer another advantage. Government trademark offices require highly organized and curated data sets, which can be challenging for even experienced professionals to consistently provide. Data entry errors can create significant backlogs, even leading to the rejection of entire applications, as MacDonell points out.

“We synthesize all the necessary data sets, and through machine learning, we ensure applications are fully compliant with government regulations,” she explained. “A senior-level trademark examiner who joined our team was thrilled that we were addressing the issues causing government backlogs. She believes that if Heirlume can consistently submit perfect applications, the backlog could be eliminated.”

Improving Economic Activity

Streamlining the trademark registration process reduces friction for small business owners, fostering economic activity and growth. MacDonell envisions a future where trademark ownership is prioritized even before domain registration. To this end, Heirlume has partnered with Google Domains to potentially integrate trademarkability indications into Google Domain search results.

A Commitment to Diversity and Inclusion

The initial seed funding round included participation from Backbone Angels, Future Capital collective, Angels of Many, MaRS IAF, and angel investors like Daniel Debow and Bertrand Cesvet. MacDonell emphasized the startup’s commitment to diversity and inclusion, both in its team and its cap table.

“Just as we aim to increase access and equity in trademark protection for small business owners, we were intentional in building our team and investor base,” she said. “We aspire to build the largest tech company with a majority female-identifying technology team. Our investor makeup includes 65% female-identifying or underrepresented investors. This commitment extended the fundraising process and even led us to decline offers from some Silicon Valley firms.”

“We want to empower underrepresented investors to fund underrepresented founders. Hashtags are not enough. Our CTO is female and often finds herself the only woman in the room. We are committed to ensuring that women in tech are no longer in that position.”