IP Attorney Diana Palchik Talks Shop: “There’s What I’d Like to See, and What I Do See”

Brands have a tendency to consider intellectual property protection too late in the game, according to Diana Palchik, who served previously as legal counsel at multinational corporations including Texas Instruments and Mary Kay before founding her own firm. She urges indie beauty brands to be proactive about building an IP strategy that aligns with larger strategic goals.

Diana Palchik, Principal at Palchik Law & Consulting and founder of Beauty Mark trademark services, finds that too often rising beauty brands put off trademark protection strategy for a variety of reasons, including awareness as well as budget.

“A lot of the smaller, entrepreneurial clients don’t always immediately recognize that a trademark is an intangible asset, that their website look and feel is an intangible asset, that these are all intangible assets of their business that have value,” Palchik said.

As a result, they tend to come knocking when an issue has already arisen.

“There’s what I would ideally like to see, and then there’s what I do see,” she said. “What I do see is they’ve done whatever they’ve done, and now they’ve got a problem because they’ve gotten a refusal on their trademark application, or they have a dispute either as the defendant – because they didn’t adequately perform due diligence at the beginning when they selected their branding – or they discovered there’s somebody else infringing on their IP.”

Start-up companies frequently seek to register a mark after heavy money and energy investment, by which point they have missed the window for being able to register it. “What I would like to see more of is people coming and saying, ‘I’ve got this idea/IP. Educate us on how to do this from square one so we don’t make the mistakes and we maximize the value of our IP.’”

Based in Dallas, TX, Palchik also is Of Counsel at Wright.law, which works heavily with the non-profit sector, and served previously as legal counsel at multinational corporations including Mary Kay and Texas Instruments. All told, she has almost two decades of practice experience focused on trademarks, other IP and commercial transactions.

Today, her clients are mostly beauty companies. She leverages her experience in the beauty and tech worlds over 25 years, and her educational background in marketing and international business, to provide them with relevant strategic assistance related to their IP development and management challenges.

Palchik regularly educates and consults brands on trademark topics including process planning, international expansion strategy, trademark clearance, brand name selection, infringement monitoring, and transfer of trademarks (e.g., in acquisitions).  Some of the independent beauty brands she has obtained registrations for are Saie, Kinfield, Brooklyn Candle Studio, and Everyday Humans. She said maximizing IP value means cultivating an approach that aligns with a company’s larger strategic goals.

“The ideal is that somebody comes before they have committed to some sort of branding – to a phrase, a word, a logo – and we talk about it at the beginning. Not only how do you get this registered, but also how does this relate to other parts of your business? Do you plan to get investors? Do you plan to sell your business someday? Do you want to go to Canada, Mexico, the UK? Did you search that word, that tagline, that logo, in places where you want to operate within the next three to five years?”

She noted that most cosmetics companies, particularly smaller players, do not have patents; rather, their key IP consists of other intangible assets – e.g., trademarks and copyrights, which include software programs, and trade secrets, which include non-public databases and other proprietary information.

“One of the things that’s a huge headache that people don’t know about is when they hire somebody to create anything for them – artwork, coding, programs, apps, their website – probably half of them don’t have any formal agreements or have agreements that are not covering the relevant issues, because often the service provider is as unsophisticated about the legalities as they are and has not obtained adequate legal advice,” Palchik said.

“The companies may think that because they paid a lot of money to the service provider, that means they own what the service provider or creative has created. But that is not the way it works. If there isn’t a copyright assignment agreement with specific language in it, then that contractor owns whatever it is.”

Palchik noted this can be especially problematic when the service provider is based outside the U.S. due to the complexities and unknowns inherent in navigating foreign IP regimes.
While early-stage companies may be inclined to prioritize other spending over IP strategy, investing earlier often proves to be the more affordable approach over the long term, she said.
Outside her core IP focus, Palchik is following legal developments around data privacy, as well as artificial intelligence as it relates to IP protection. She’s a Small Business Advisor at Cosmetic Executive Women, part of C-Sweet’s female executives global community, a frequent mentor of college students and young professionals, and a member of IBA’s Supply Chain and Sustainability Advisory Committee.

The prospect of ongoing learning was a key motivation for her gravitating to IBA and its Supply Chain and Sustainability Committee.

“I had a representation where we had to negotiate provisions in supply agreements in a different industry where there was a shortage of a particular material, and the client needed to figure out how to be at the head of the line for allocations. So early in my career, I was already aware of how significantly these supply chain issues can affect a business’s operations,” she said.

Palchik concluded, “In order to be better at what I do, I have to understand these different perspectives and different issues that people care about and where they’re coming from.”