Strong trademarks and brands often represent a significant portion of enterprise value and can be critical levers at exit for sponsors and portfolio companies. Yet, sponsors and portcos sometimes treat brand protection—one of the most direct ways to preserve that value—as an afterthought, reacting only after issues arise. Instead, proactive brand protection should be a regular part of a company’s operations.

Ongoing trademark monitoring and domain name monitoring are important elements of a proactive brand protection strategy. Monitoring solutions are relatively straightforward to implement, and, when executed properly, act as early-warning systems by scanning for potential risks to the business (and its customers); surfacing would-be infringement that can be nipped in the bud before it develops into a costly dispute; and enabling timely, efficient responses that protect exclusivity and enhance brand equity.

Below, we outline what trademark monitoring and domain name monitoring entails, the risks of failing to implement effective monitoring, the business considerations supporting implementation, and practical guidance for sponsors and portfolio companies seeking to build or strengthen trademark and domain name monitoring programs.

Trademark and Domain Name Monitoring Systems

Trademark monitoring can be set up with commercial watch services (such as Corsearch, CompuMark or Markify) to identify new third-party trademark filings or uses that may conflict with a company’s existing marks. Brand owners can configure “watch terms”—for example, their house mark, product names or close variations—which serve as the basis for the monitoring program. These services then aggregate data from the U.S. Patent and Trademark Office (USPTO) and foreign registries, as well as state trademark registries and business name filings, online marketplaces, app stores and social media platforms, and compare that data against the watch terms to identify third-party uses similar to the watch terms.

When a potentially confusing mark or use is identified, the system alerts the brand owner, which enables the brand owner to make early, informed decisions about next steps. Responses might include opposing an application, initiating a cancellation proceeding or sending a cease-and-desist letter.

Domain name monitoring services (such as MarkMonitor or Corsearch) perform a parallel function. They continuously scan new domain name registrations across generic top-level domains (gTLDs) such as .com, .net or .biz, as well as in country code top-level domains (ccTLDs) such as .co, .tv, .us, .uk, .de and .cn, to detect domains that mimic or misspell a brand’s existing names (e.g., “Facebok.pw” or “WEIISFARG0.com”). When flagged, brand owners can act promptly. Possible responses include informal resolution, formal action under the Uniform Domain-Name Dispute-Resolution Policy (UDRP) or Uniform Rapid Suspension System (URS), or a litigation under trademark laws or the Anticybersquatting Consumer Protection Act (ACPA).

Both trademark and domain name monitoring services are generally low-cost and priced on a per-term basis. When used proactively, they can prevent potentially substantial downstream expenses.

Legal and Business Risks of Failing to Monitor

Failing to monitor trademarks and domain names may expose a company to significant legal and commercial risk, from diminished enforceability to reduced exit valuations. It can also affect goodwill and reputation if consumers blame the company for allowing them to be defrauded by an infringing mark or deceptive domain name.

Delay and Acquiescence. A company that neglects to police its marks may find it difficult to enforce rights to those marks later. Courts may find that a rights holder “slept on its rights,” limiting available remedies. Regular monitoring and prompt enforcement help ensure that trademark claims remain viable.

“Crowded Field” Evidence. One of the most potent arguments a brand owner can make in litigation against a similar mark is that the similar mark is likely—or already has—led to “consumer confusion” in the marketplace. However, if defendants can counter that the market is already saturated with similar marks, that weakens the distinctiveness of the asserted mark and thus makes it more difficult for a brand owner to argue that a third party’s similar mark could lead to consumer confusion. A proliferation of marks that are confusingly similar to a brand owner’s mark can narrow the scope of protection and may make enforcement more challenging as time goes on. Proactive monitoring and action can help preserve exclusivity, minimize the number of similar third-party marks and thus reduce the effectiveness of a “crowded field” argument by a potential infringer.

Difficulty Proving Secondary Meaning. When people speak of a “registered trademark,” they generally mean a mark on USPTO’s Principal Register. The USPTO also maintains a Supplemental Register for descriptive marks that are not associated with a single source; the Supplemental Register provides more limited rights than the Principal Register. 

However, with sufficient usage over time, a descriptive mark can acquire distinctiveness or secondary meaning. When that happens, a brand owner can apply to move the mark to the Principal Register. (A well-known example of a mark that made such a move is “Best Buy.”)

Enforcement history is one factor the USPTO considers when evaluating whether a mark has achieved secondary meaning. Companies that fail to monitor or enforce against unauthorized use may face an added hurdle in trying to demonstrate that their marks have acquired distinctiveness, limiting the scope of their protection and overall value.

Fraud Risk. Malicious actors regularly use domain names similar to those of established businesses when seeking to defraud customers or phish employees as the start of a cyberattack. Similar domain names can also be used in fraud attempts targeting various aspects of fund operations, including LPs, sponsors and portfolio companies or their customers. Fraud that is successful may not only harm a company’s customers but may also harm the company’s reputation if the company’s lax trademark enforcement allowed the fraud to proliferate. Proactive monitoring can spot these issues quickly and make it more difficult for fraudsters to succeed.

Diligence Discounts. During exit, acquirers may discount valuations if diligence reveals weak trademark enforcement. Overlapping marks or unmonitored domain names can signal risk, rebrand costs or future disputes—all of which may reduce a buyer’s offer.

The legal and business risks of failing to monitor trademarks are not theoretical. Consider the following real-world, anonymized client examples:

• Failure to Monitor Foreign Use. Company A registered trademarks for its brand in the United States but not abroad. Consequently, it did not monitor foreign use. A potential acquirer during due diligence discovered several identical marks in foreign markets, which reduced Company A’s brand value and complicated the transaction.

• Failure to Monitor Foreign Registration. Private Equity Sponsor A does fundraising in various countries outside the United States but did not monitor trademark registrations in European countries. A competing private equity company adopted and registered the same name in one of those countries. Sponsor A only became aware of the registration years later, when confusion arose during a fundraising period, but by then the competing company had years of use and substantial goodwill, which severely limited Sponsor A’s ability to challenge the infringing use of its name. (This example underscores the fact that sponsors should ensure that their own marks are monitored as well.)

• Failure to Monitor U.S. Registrations Based on Foreign Rights. Company A owned a U.S. trademark for a beverage. Company B, which held similar rights abroad, later registered in the U.S. based on its foreign registration. Because Company A failed to monitor USPTO filings, it missed Company B’s application and did not learn about it until years later. When Company A finally learned about Company B operating in the United States, its position was significantly weakened when it finally brought suit.

• Failure to Monitor Common Names. Company A’s product developed a popular colloquial name distinct from its registered mark. The company monitored only its official brand name, missing use of the colloquial term by a former customer who launched a competing product. The oversight led to expensive litigation that could have been avoided through broader monitoring parameters.

The Business Case for Proactive Monitoring

In addition to mitigating legal exposure, proactive monitoring also delivers tangible business benefits:

Low-Cost Resolution. Timely discovery of potential infringements allows for swift, inexpensive enforcement—often through a cease-and-desist letter, opposition proceeding or UDRP complaint—rather than costly federal litigation.

Preservation of Exclusivity and Brand Equity. Regular enforcement helps maintain a mark’s distinctiveness and commercial value, protecting a key intangible asset that factors heavily into diligence and valuation.

Stronger Position at Exit. Demonstrating consistent monitoring and enforcement during diligence gives sponsors and portfolio companies a credible basis to counter buyer concerns about IP risk and valuation.

Practical Guidance for Implementation

Establishing an effective monitoring program requires thoughtful design and disciplined execution. The following practices can help sponsors and portfolio companies build scalable, value-preserving systems:

Create a Trademark Inventory and Implement Tiered Monitoring. Develop a complete inventory of all trademarks—registered and unregistered—along with slogans, logos, trade dress and domain names. Assign monitoring “tiers” based on importance and risk: core marks may receive global, continuous monitoring, while secondary marks can be monitored periodically or within specific geographic regions. When compiling watch terms, be sure to include similar terms and colloquial names that might have developed organically in the marketplace.

Develop Templates. Standardize enforcement documents—such as cease-and-desist letters, Trademark Trial and Appeal Board oppositions and UDRP complaints—so they can be deployed quickly with minimal customization for any given at-issue mark. This reduces response time and overall cost.

Document and Centralize Enforcement Records. Maintain detailed records of enforcement actions and outcomes. Centralized documentation supports consistency, facilitates future diligence and helps demonstrate successful policing if litigation arises. At the time of exit, centralized records can more easily be gathered into a data room and will help make due diligence more efficient.

Take a Measured Approach. Not every similar mark warrants enforcement. Over-asserting rights can dilute credibility. Focus on uses that are truly confusingly similar and that overlap with the company’s goods or services.

Conclusion

Trademark and domain name monitoring are, at their core, forms of asset management designed to protect and enhance brand value. For sponsors and portfolio companies, the business case is clear: proactive monitoring helps detect potential infringements early, reduces enforcement costs and strengthens brand exclusivity and valuation.

A centralized, disciplined monitoring program—guided by the practical steps above—provides repeatable, scalable protection across a portfolio. In an environment where buyers scrutinize IP diligence and opportunistic actors move quickly, trademark and domain monitoring represent a low-cost, high-reward investment that should be an integral part of every portfolio company’s brand management strategy.

Private Equity Report Fall 2025, Vol 25, No 3