Kraig Biocraft Laboratories Inc (KBLB)

[rayovac812]

but people might not be as excited to buy spider silk yoga pants if Bolts "spider silk" has already dragged the spider silk name through the mud with their terrible mechanical properties.

I think they will own whatever cheap mistakes they make. It won't be Dragon Silk or any other spider silk other than there own. You trademark your products so mistakes are easily and properly associated to corresponding fiber lines. So they will ruin their own reputation, IMO.