While most companies with successful products fiercely protect their trademarks, Tran opted to forego seeking trademark protection for the sriracha name, choosing instead to only seek trademark protection for the unique green topped bottle and the rooster logo. To some marketing executives, the choice is a fundamental misstep, but Tran stands behind his decision citing mass exposure and “free advertising” as a key to his brand’s success. The numbers seem to favor Tran’s argument, with sriracha sales increasing from $60 million to $80 million in the last two years.
Currently, there are over 24 trademark applications for marks that include the term SRIRACHA, most in association with food or food related services. Of the few that have registered, each was required to disclaim the term SRIRACHA, meaning the Trademark Office is of the opinion that the term is merely descriptive or generic in association with identified goods. Assuming the term ‘sriracha’ was protectable at one point in time, had Tran filed a trademark application for “sriracha” earlier, he may have been able to protect it as a brand of chili sauce, thereby giving him the ability to prevent its use by third parties.
Although Tran seems to be benefitting from the current third party use, Tran may have reason to worry. While there are a number of companies currently selling sriracha style sauce, the makers of Tabasco®, sauce giant McIlhenny Co., is entering the sriracha market, with a vast advertising budget and superior distribution outlets. Should McIlhenny flood the market with its own ‘sriracha’ product, Tran may find that his strategy backfired in decreased profits and market shares. For the time being, McIlhenny admits Tran “got an awful big head start.”
If history is any indicator of the future, it is likely that the term “sriracha” will eventually cease to function as any form of advertising for Mr. Tran exclusively, but will instead, likely be viewed simply as a type of delicious chili sauce. The term is likely to go the way of other terms like “escalator” and “aspirin” that have ceased to be associated exclusively with a single company. Indeed, by allowing numerous other companies to create and market a sriracha sauce, Mr. Tran has all but insured that his original sriracha sauce will soon be but one among many in a vast ocean of sriracha sauces. The sad result of Mr. Tran’s failure to protect his brand may be that the substantial competitive advantage he once possessed may soon be thoroughly neutralized and overshadowed by other companies more intent on building and protecting the brands associated with their products.
Ultimately, the test of Tran’s choice will pass to the consumers. Will sriracha customers remain loyal to Tran and his Huy Fong product that invented the flavor profile and caused the sensation, or will they bow to McIlhenny’s accessibility and name recognition?
Anna Vradenburgh is a well-respected, business-minded expert in intellectual property issues. As a patent attorney licensed to practice before the United States Patent and Trademark Office, Anna assists clients in patent and trademark prosecution, and represents clients in trademark opposition matters, domain name dispute matters, and patent and trademark litigation. Anna can also assist your company in all manner of intellectual property protection. For more information, visit her website, or contact Anna at (818) 946-2300. This article is for educational purposes only and nothing in this article is intended to be, nor should be considered legal advice.