Trademark Titan Blog™

The .XXX gTLD Sunrise Period Has Set For Brand Owners: Should Trademark Owners That Opted Not To Participate Be Concerned?

2011-11-06T03:47:00.000-08:00

Now that the Sunrise period has set for brand owners to block their respective trademarks from being used in .XXX domain names, what’s next for brand owners that opted not to participate in the Sunrise period and how concerned should they be?

The Sunrise period for members and non-members of the adult community that have verifiable trademark rights or pre-existing exact-match domain names has closed. The next phase for registering .XXX domain names is the Landrush phase reserved only for those members of the adult community. Should there be competing reservations during that phase, those domain names will be auctioned to the highest bidder. That period is set to open on November 8 and close on November 25, 2011. The last and on-going phase will be the General Availability phase, which is set to open on December 6, 2011.

For those brand owners that participated in the Sunrise period to block their respective trademarks, it’s important to note that they were only eligible for blocking domain names that correspond to the exact spelling of their trademarks or pre-existing domain names. Should they decide to reserve defensive domain names for common misspellings of their respective marks – to keep them away from typo-squatters - they must do so during the General Availability phase.

For the past several years the intellectual property trademark attorney community and many brand owners have “sounded the alarm” with respect to the Internet Corporation for Assigned Names and Numbers’ ("ICANN") proposed plan to launch potentially hundreds of new generic top level domain names (“gTLD”), such as .garden, .books, .cars (and already approved .XXX), because, they argue, such launch would be catastrophic for brand owners since they would need to spend thousands and possibly hundreds of thousands of dollars on useless defensive domain name reservations and enforcement actions against squatters.

Recently, and interestingly, however, I have seen comments by some trademark attorneys that suggest that there may now be an emerging more realistic view on that issue. Those comments concern the new .XXX gTLD and suggest to me that the trademark attorney IP community view on gTLDs might be maturing. Those recent comments concern beliefs that the purpose of domain name sunrise periods is to “bilk” / “fleece” brand owners out of their money and there is no evidence that cybersquatters have any “real” interest in reserving new gTLDs – since those corresponding sites tend to receive less traffic than sites corresponding to .com domain names. That potential “maturing” view may be the result of new business realities and/or an appreciation for taking a business practical approach on the issue and not do what some people say many lawyers do best, “over lawyer.”

If there is growing sentiment among the trademark community that reserving or blocking .XXX domain names that correspond with brand owners’ trademarks may not be worth the expense (unless the marks are famous and/or coined marks or may have a certain connotation within the adult industry), perhaps the trademark community should not be overly concerned with reserving defensive domain names for the anticipated new gTLDs – especially those that would not correspond to a brand owner’s industry. I would certainly think that, for example, an automotive company would be more concerned with the .XXX gTLD than .garden or .pets.

I have blogged about the imminent deluge of new gTLDs, including HERE, HERE and HERE, and how that may affect the average brand owner. In one of those posts, I wrote:

In my opinion, the concerns raised by brand owners appear to be limited mostly to multi-national, well-known brands that would be most susceptible to domain name squatting issues. Small to medium-sized companies and many non-consumer products companies probably have little to worry about should ICANN’s proposed plan be implemented. All companies should, however, be keeping an eye on the process as it unfolds and, if implemented, be sure to monitor for misuses of their brand names in the new online “wild wild west.”

In another post, I wrote the following:

I cannot recall the last time that I had a client call or complain about a cybersquatter using its trademark or phonetically similar trademark with one of the more obscure gTLDs (i.e., .travel, .jobs). Why? My thoughts are that there is likely not any reason for the average consumer to visit most gTLDs. Would the average consumer think to type in www.xerox.travel when searching for Xerox’s web site? Of course not. If that's the case, then why would cybersquatters care to reserve domain names that don't generate web traffic and revenue?

I have also reported the following:

Minds + Machines' study reports that “Overall, the claims of brand owners that they will be forced to spend significant amounts of money performing defensive registrations in the proposed new gTLDs are not supported by the historical data, which shows that they largely do not undertake defensive registrations in new gTLDs, nor is there any extensive cybersquatting in new gTLDs.”

The Domain Name Wire™ recently reported that the ICM Registry has already received over 42,000 applications for .XXX domain names and has pocketed over 8 million dollars – with the General Availability phase yet to open. Domain Name Wire also reports that:

The sunrise applications are five times as many as ICM Registry anticipated. If trademark holders are like many other businesses, we can expect a flurry of applications before the sunrise period ends this Friday so the numbers will grow.

Domain Name Wire author also comments that:

.XXX has benefited from some savvy (and expensive) marketing, lots of free press, and intellectual property lawyers selling fear to their clients.

I have provided a list of six actions that brand should consider to take now to ready themselves for the potential deluge of hundreds (and some argue thousands) of new gTLDs in my post HERE.

So what will it be for most brand owners? Take the business practical approach and defensively block and reserve only those gTLD names that make business sense or continue to do what most have done over the past decade plus, be “over-lawyered”?

Uniform Domain-Name Dispute-Resolution Policy (UDRP): To Catch a Cybersquatter

2011-07-02T06:51:00.000-07:00

An issue that regularly arises for many brand owners is whether third party use of a certain domain name infringes their trademark rights. The analysis for each case of alleged trademark infringement may vary depending upon the facts. While some cases give rise to clear trademark infringement, some cases are not that clear and others verge on that fine line of “reverse domain name hijacking.”

Trademark owners concerned with third party use of their trademarks in domain names may utilize - what is known as - the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”). The UDRP – as opposed to litigation – is a quick and economical procedure for seeking transfer of an “infringing” domain name. In many instances, respondents in UDRP proceedings tend to be domain name speculators and/or cybersquatters.

Domain name speculation is the practice of reserving or purchasing domain names for the purpose of later selling them for profit. Selling – or flipping – domain names are akin to what we saw in the real estate market several years ago. Those electronic “real estate” owners that speculate in domain names are known as “Domainers,” many of which have successfully built businesses around buying and selling domain names.

Domain name speculation should not be confused with cybersquatting. Domain name speculation is the practice of identifying generic or descriptive (not trademarks) domain names and utilizing them to develop web site traffic for purposes of generating revenue from what is known as “pay-per-click” advertising. Domain names may also be re-sold or “flipped” for profit. Much like real estate investment and speculation, Domainers evaluate electronic real estate and decide, based upon available information, what the “property” is worth. The goal: make a profit. No harm, no foul -- until Domainers use trademarks in domain names in violation of a trademark owner’s rights.

Cybersquatters on the other hand reserve or purchase domain names that use someone’s trademark. A cybersquatter may also engage in - what is known as - “typo-squatting” by reserving domain names of commonly misspelled trademarks for the purpose of capturing misdirected Internet traffic when a user misspells a trademark (www.Walmrt.com). The definition of a cybersquatter is one that registers, traffics in, or uses a trademark of another in a domain name with bad faith intent to profit from the goodwill belonging to that trademark owner.

When cybersquatters misuse trademarks in domain names, trademark owners may take action by filing UDRP proceedings. Complainants in UDRP proceedings must establish the following three elements to successfully compel transfer of a disputed domain name:

1. The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;

2. The registrant does not have any rights or legitimate interests in the subject domain name; and

3. The registrant registered the domain name and is using it in "bad faith."
Below are a few considerations when contemplating the use of the UDRP process or determining whether your company has rights in a disputed domain name:

1. May trademark owners of non-registered, common law trademarks utilize the UDRP process and successfully compel transfer of infringing domain names?

Yes. As long as complainants establish that consumers have come to recognize their marks as being distinctive identifiers associated with them or with their goods and/or services, they may successfully assert common law trademark rights and potentially compel transfer of subject domain names – even if they do not own a registered trademark.

2. Do trademark licensees have rights for purposes of utilizing the UDRP process?

Yes. Licensees are generally considered to have rights in trademarks under the UDRP. Licensees must, however, establish their licensee status and/or provide evidence that the trademark owner has authorized the filing of the UDRP complaint.

3. Is a domain name that incorporates a trademark and a descriptive or generic term (as viewed in relation with complainant’s products and/or services) still considered “confusingly similar” to the complainant’s mark?

Generally yes. The addition of descriptive or generic terms to the complainant’s trademark would normally be regarded as being confusingly similar and thus sufficient to find confusing similarity under the first prong of the UDRP test.

4. Are domain names that use misspellings of trademarks (i.e., typosquatting) considered confusingly similar to complainants’ trademarks?

Generally yes. As long as the misspelling is obvious or common, the misspelled domain name will generally be found to be confusingly similar to a complainant’s mark.

5. Can resellers or distributors of trademarked products have legitimate rights with respect to securing domain names that incorporate those products’ trademarks?

Maybe. If distributors or resellers use the subject domain name with the actual sale of the branded products and services, use the subject domain name for only the corresponding branded products and accurately and prominently disclose its relationship with the trademark owner, they may be regarded as having a bona fide interest in a subject domain name.

6. Can there be a finding of bad faith when a domain name has not been put to use and the domain name holder has not attempted to sell a subject domain to a brand owner?

Generally yes. Some panels have found that the act of holding domain names for years without putting them to a bona fide use - and even when there has not been an attempt to sell the subject domain name to a brand owner – does not preclude a finding of bad faith.

For read more about this topic, you can read some of my previous blog posts here, here, here and here.

Authors: A Title Of A Single Book (Works) Is Not Registrable As A Trademark At The U.S. Patent And Trademark Office - Or Is It?

2011-06-05T05:57:00.000-07:00

While I was in San Francisco in May for the International Trademark Association’s annual conference, this issue raised its ugly head…again. So I thought it would make for a timely post - at least for this author and possibly others. I also needed an excuse to use some of my San Francisco photographs.

An issue that comes up from time to time in my practice and one that I handled regularly when I was a trademark attorney with the United States Patent and Trademark Office (“USPTO”) is that of authors seeking trademark protection for titles of books or similar works. Seeking federal trademark protection for book titles or a portion of a book title (known sometimes as “phantom marks”) may be an import issue and branding strategy for some authors, especially if they would like to prevent others from using the same or similar title on competing books. Unfortunately for authors, however, the USPTO does not issue trademark registrations for a book title of a single work.

Section 1202.08 of the Trademark Manual of Examining Procedure (“TMEP”) (the trademark examination guide followed by trademark examiners at the USPTO) states the following (with emphasis added):

1202.08 Title of a Single Creative Work

The title, or a portion of a title, of a single creative work must be refused registration under §§1, 2, and 45 of the Trademark Act, unless the title has been used on a series of creative works. The title of a single creative work is not registrable on either the Principal or Supplemental Register. Herbko Int’l, Inc. v. Kappa Books, Inc., 308 F.3d 1156, 1162, 64 USPQ2d 1375, 1378 (Fed. Cir. 2002) ("the title of a single book cannot serve as a source identifier"); In re Cooper, 254 F.2d 611, 615-16, 117 USPQ 396, 400 (C.C.P.A. 1958), cert. denied, 358 U.S. 840, 119 USPQ 501 (1958) ("A book title ... identifies a specific literary work ... and is not associated in the public mind with the publisher, printer or bookseller...."); In re Hal Leonard Publishing Corp., 15 USPQ2d 1574 (TTAB 1990) (INSTANT KEYBOARD, as used on music instruction books, found unregistrable as the title of a single work); In re Appleby, 159 USPQ 126 (TTAB 1968) (title of single phonograph record, as distinguished from a series, does not function as mark).

Authors, and even some practitioners not well versed in trademark law, are blindsided with this harsh reality when they receive Office actions from the USPTO refusing registration of their respective “trademarks” – or book titles. First reaction may be a sense of panic, since it may now appear that all of that hard work writing the book (believe me, I know…), obtaining the domain name corresponding to the title of the book and working with a somewhat disagreeable-at-times-publisher has not resulted in proprietary rights in the title – or a portion thereof - of my book! Second reaction may be to ask the question “what do I do now…!?” The frequent answer from USPTO trademark examining attorneys handling these cases - and even perhaps from legal counsel – is “write a second book!” Once you have written your second book, they say, (oh that’s easier said than done), you would have a book series, which may entitle you to trademark registration protection for your title. But what should be done in the meantime to keep others from using the same or similar title?

Ok. So, here you are. Not in a place you wanted to be. Was your situation avoidable? Doesn’t looks like it, right? The law is the law. One book, one title = no trademark registration. Series of books, one title = trademark registration. Wrong. Understanding the intricacies of trademark law and the TMEP before filing your trademark application could have avoided the rejection to registration.

The preparation and filing of a trademark application itself is only the administerial piece to the trademark registration puzzle, not the legal piece. Most of the work and strategy takes place before a trademark application is prepared and filed. Remember, as I have said before, there are attorneys that handle trademark cases and then there are trademark attorneys. Enough said. Trademark applicants should anticipate issues that may arise during trademark application prosecution and be equipped with a strategic “road map” for overcoming USPTO objections. Reacting to USPTO Office actions is a loser’s game. Anticipating those objections is the best way to ensure that brand owners have the best chances for successfully registering their trademarks.

Navigating this "Slippery Slope"

For authors seeking protection for a title of a single book, and assuming that it contains at least one distinctive portion or term, meaning that the entire book title does not simply describe the subject matter of the book (for information on that point, check out a couple of my blog posts here and here), they should work with the publisher to create a design logo (think of the logo for the publisher Penguin Group) that includes the book title. Once that logo has been approved by trademark counsel, authors should use that logo on the book itself, which would contain the title of the book. As long as the logo is used in an acceptable trademark manner, the logo – which includes the title of the book - should be registrable.

There are also other strategies for protecting (registering) a portion of a book title. That is especially important if an author intends to create a series of books surrounding a certain theme and wishes to modify the title slightly with each new book. Authors should also consider other important trademark (and copyright) aspects while creating their brands around their books and creative works. Putting all of the pieces together before a book publishes is the best strategy for building a successful brand and securing your intellectual property rights for the published work(s).

United States Trademark Trial and Appeal Board Crushes Trademark Application for MONSTER Mark

2011-05-01T07:32:00.000-07:00

Although this is not my typical style of blog post, I promised my 7-year-old son that I would use the recent U.S. Trademark Trial and Appeal Board (the “Board”) decision in In re Monster Cable Products as a “teachable moment.” You may be asking yourself why would my son know about that decision? Well, I must confess, and I’m a bit embarrassed to say so, when my son was a bit younger I began reading aloud Board decisions during our programmed “reading time” unbeknownst, of course, to my wife. Amazingly he enjoys them! Or at least I think he does, since he asks some pretty good questions and is able to stay reasonably “tuned-in.” Or maybe he just likes being with dad. Either way, it’s all-good.

Might I be creating a next generation trademark/IP lawyer? I really hope not as my ~~secret~~ dream for my son is for him to be a professional hockey player for the Boston Bruins (and I think it is his too) or for any professional hockey team for that matter (other than the for Habs, of course). But then again, I’d be pretty happy and a proud dad if my son were to score! a full college hockey scholarship ~~at a nearby college and so I could use the “college fund” to buy my Porsche 911~~. Ok, on with the post. My son is now rolling his eyes.

This is yet another case of the trademark selection process running off the track. As I have blogged about many times, brand owners cannot ignore the importance of trademark selection and how the improper selection of marks has the potential to kill (or at least potentially harm) a brand. Brand owners must not only consider marketing aspects of trademarks (how a “mark” itself can “advertise” a product) but also legal ones. In my practice I work closely with many of my clients during the trademark selection process to ensure that valuable names are considered and ultimately selected. Getting trademark counsel involved early during internal trademark selection discussion should result in the selection of valuable brand names and may even reduce the costs associated with the clearance phase due to the pre-screening of proposed marks early in the selection process.

In the case of Monster Cable Products, Inc., Monster Cable sought registration for the mark MONSTER, in standard character form, for various automobile products, including suspension struts, bumpers, automotive fender flares, automotive grab handles, automotive grille, grille guards, automotive light bars, rear view mirrors, roll bars, running boards, automotive seats, shock absorbers, air intake manifolds and truck bed liners.

The Trademark Examining Attorney refused registration of the mark MONSTER on the ground it describes certain characteristics, features and/or qualities of truck accessories. The Examining Attorney argued that because the term “monster truck” means a very large pickup truck, the use of the term MONSTER in connection with truck accessories identifies products used for monster trucks. So the Examiner refused registration. The Examining Attorney based his decision on the long standing trademark principle that a term is deemed to be merely descriptive of goods or services, within the meaning of Section 2(e)(1) of the Trademark Act, if it immediately conveys an immediate idea of an ingredient, quality, characteristic, feature, function, purpose or use of the goods or services.

Monster Cable argued that the term MONSTER, when used in connection with automotive accessories, is suggestive, if not arbitrary, for the following reasons:

1. Just because the record shows that there is a vehicle referred to as a “monster truck” does not mean that the word “monster” is descriptive of automotive accessories;

2. The word “monster” per se has no direct relationship with automotive accessories; and

3. Because the average consumer does not drive a monster truck, the word “Monster” does not directly describe automotive accessories.

The Board disagreed, however, by stating the following:

One of the primary characteristics of a “monster truck” is its modified suspension. One of the products listed in the description of goods is “suspension struts.” Consumers encountering MONSTER brand suspension struts will immediately perceive the products as being for monster trucks. Furthermore, the record shows that roll cage kits, roof racks, nitrogen shock absorbers, floor mats, battery cable kits and parts, windscreens, windshields, and canopies are sold for monster trucks. These products correspond with roll bars, automotive cargo management systems, floor mats, shock absorbers, automotive battery accessories, and window covers and deflectors listed in the description of goods. As indicated above, consumers encountering the MONSTER mark in connection with these products would likely perceive the products as being for monster trucks. Finally, a consumer encountering MONSTER for truck steps and truck bed liners would also understand, without any need for analysis, that the products were for monster trucks.

In view of the foregoing, the Board affirmed the Examiner’s merely descriptiveness refusal.

Trademark Principles for Non-Distinctive, Merely Descriptive “Marks”

When selecting new brand names, brand owners must understand that descriptive terms are not protectable as “trademarks” upon first use. Descriptive terms must acquire secondary meaning before any trademark rights are acquired – if ever any. To read more about avoiding the pitfalls of descriptive “trademarks,” read my blog posts on that topic, including here, here, here and here.

As pointed out by the Board in In re Monster Cable, below are certain key trademark principles you need to know to avoid adopting non-distinctive, descriptive terms as “trademarks”:

1. A term need not immediately convey an idea of each and every specific feature of the applicant’s goods or services in order to be considered to be merely descriptive; rather, it is sufficient that the term describes one significant attribute, function or property of the goods or services.

2. Whether a term is merely descriptive is determined not in the abstract, but in relation to the goods or services for which registration is sought, the context in which it is being used on or in connection with the goods or services, and the possible significance that the term would have to the average purchaser of the goods or services because of the manner of its use; that a term may have other meanings in different contexts is not controlling.

3. The question is not whether someone presented with only the mark could guess what the goods are. Rather, the question is whether someone who knows what the goods are will immediately understand the mark as directly conveying information about them (i.e., whether someone familiar with applicant’s truck accessories will understand MONSTER to convey information about the goods).

4. It is a well-settled legal principle that where a mark may be merely descriptive of one or more items of goods in an application, but may be suggestive or even arbitrary as applied to other items, registration is properly refused if the subject matter for registration is descriptive of any of the goods for which registration is sought.

5. A term or terms are not merely descriptive of goods or services if one must exercise mature thought or follow a multi-stage reasoning process in order to determine the product or service characteristics.

Rather than taking the “easy” way out by adopting “marks” that are capable of “advertising” the associated goods or services, select suggestive, arbitrary or coined terms to use in combination with the desired descriptive term(s). If Monster Cable had adopted a mark using that strategy, such as “Monster Planet” - “Monster Craze” – or “Pinnacle Monster Accessories” (assuming there are no prior users of those marks or similar mark, of course) it likely would not have been run over by the Board.

United States Trademark Registration Process: Five Potentially “Fatal” Mistakes Commonly Made by Foreign Applicants

2011-04-24T08:20:00.000-07:00

Seeking United States trademark registration protection is full of traps for the unwary. Not only for pro se applicants (those that represent themselves without the assistance of trademark counsel) but also for attorneys that step outside of their every-day specialties. This post focuses on five trademark traps that many foreign trademark applicants fall victim to when seeking trademark registration protection in the United States.

1. United States is not a first to file country. Because many foreign trademark applicants are domiciled in countries that grant exclusive trademark rights to those that file first, they fail to understand that trademark rights in the United States are created based upon trademark use and not federal trademark registration. Thus, just because there are no pending trademark applications or registrations on the United States Patent and Trademark Office (“USPTO”) database for the same or similar mark does not mean that a foreign trademark owner need only file a trademark application (and secure registration) to secure senior trademark rights in the United States.

Example: Company A begins use of the mark APEX in 2008 in San Francisco for insurance services and slowly begins to expand its services in neighboring states. Company A does not seek federal trademark registration. In 2011, a foreign trademark applicant (also applies to US applicant) files a federal trademark application for the mark APEXX for insurance and financial services. Although the foreign trademark owner is the first to file a trademark application with the USPTO for the mark APEXX (or formatives thereof), Company A may still object to the filed application for APEXX via an opposition proceeding or seek cancellation of a resulting registration, within a certain period of time, on the basis of priority of rights. It is well established that the first company to use a mark in the U.S. (on a systematic and continuous basis) has priority not only with respect to use of the subject mark for the associated goods/services and related goods/services but also with respect to federal trademark registration.

For that reason, it is imperative that foreign applicants undertake a comprehensive trademark search not only for marks on the USPTO database but also for common law trademarks (those in use but not federally registered) as well as business name to ensure that the proposed mark is available. Failure to undertake such review is risky and may result in thousands, if not hundreds of thousands, of dollars in litigation costs and re-branding efforts.

2. Lack of Bona Fides. Under U.S. trademark law, a brand owner may file a U.S. trademark application after or before its mark has been put to use in U.S. commerce. As long as a brand owner has a bona fide intent to use a mark in U.S. commerce, as of the trademark application filing date, it may file an intent-to-use trademark application under Section 1(b), an application based upon a foreign registration under Section 44(e) and/or an application, via the Madrid Protocol, based upon a foreign application or registration under Section 66(a), of the Trademark Act.

Many foreign applicants secure U.S. trademark registration under Sections 44(e) (based upon a foreign registration) and 66(a) (based upon a foreign registration via the Madrid Protocol), which require that the applicant have a bona fide intend to use the applied-for mark in U.S. commerce. Although securing registration under Sections 44 and 66 do not require a foreign applicant to use its mark in the U.S. as of the application and registration dates, the applicant must still have a bona fide intent to use its mark in U.S. commerce. Lack of a bona fide intent to use a mark in U.S. commerce for the goods/services listed in an application, renders an application and resulting registration vulnerable to attack by third parties. This is problematic for many foreign applicants because many rely upon their home country registration, which may list goods and/or services of which they have no intent to sell under the applied-for mark in the U.S. or in their own country.

Should a foreign brand owner’s “lack of bona fides” be challenged by a third party, its trademark applications or registrations would be vulnerable to cancellation if it’s unable to demonstrate that it had a bona fide intent to use the applied-for mark for the listed goods/services as of the filing date of the application.

For that reason, foreign applicants should list only those goods/services in their U.S. trademark applications that they intend to sell under the applied-for mark in U.S. commerce. To read more about this issue, check out my blog post here.

Furthermore, a foreign applicant may also subject itself to a claim of fraud on the USPTO, as discussed in more detail below in trap #4.

3. Use of Mark in U.S. is Required to Maintain Registrations. As mentioned above, foreign applicants may secure U.S. trademark registration without having used an applied-for mark in U.S. commerce. At a certain point, however, the foreign registrant must show use of a registered mark in the U.S. in order to maintain its registration. During the fifth and sixth year of registration, and at the tenth year anniversary and every ten years thereafter, a trademark registrant must provide evidence of use of the registered mark in the United States. Failure to show valid use of the registered mark in the U.S. during those periods will result in the cancellation of its registration by the USPTO.

Furthermore, a mark not used within the first three years of registration is vulnerable to cancellation on the basis of non-use/abandonment.

4. Failure to Delete Unused Goods or Services in Use Affidavits. Although the issue of fraud on the USPTO may be “all but dead,” registrants should still be cognizant that failure to delete goods and/or services listed in applications or registrations that are not in use as of the filing of use affidavits can result, if challenged by third parties, in the cancellation of the application or registration on the basis of fraud.

Fraud on the USPTO may be found if an applicant or registrant knowingly makes a false representation with respect to use of a mark for the goods and/or services listed in an application or registration with a willful intent to deceive the USPTO. For that reason, foriegn registrants should delete those goods and/or services listed in their applications or registrations that are not in use as of the filing date of use affidavits. Otherwise, they may subject their U.S. trademark applications and registrations to oppostion or cancellation proceedings on the basis of fraud.

5. Specimens of Use Needed to Maintain Registrations. During those periods in which applicants and registrants must evidence use of their respective marks in the U.S. in order to acquire or maintain their registrations, registrants must provide acceptable specimens of use or -- in other words -- advertising for those services and packaging or labels for those goods listed in an application or registration that bear the trademark. Failure to provide the USPTO with acceptable specimens of use would result in the cancellation of the application or registration.

Specimens of use for services must show a direct connection between the services listed in the registration and subject mark. Also, the services must be rendered within the United States or between a foreign country and United States. Furthermore, if the trademark depicted on a specimen does not match the mark as registered, the USPTO may refuse to accept the use affidavits; thus cancel the registration on the basis the mark, as registered, is not in use.

Specimens for goods must show the registered mark being used on or in connection with the goods listed in the registration. Such use includes tags, labels, packaging, the mark depicted on the goods themselves and point of sale displays. The USPTO would not accept, for example, invoices, bills of lading, advertising or specification sheets.

Accordingly, failure to use a registered mark in the United States in a manner acceptable to the USPTO may result in the cancellation of the registered mark.

Conclusion

Before foreign applicants begin the U.S. trademark registration process, may it be via a national filing or the Madrid Protocol, they should first consult, or request that their local agent consult, with U.S. trademark counsel for a listing of filing and registration requirements and to ensure that the proposed mark is available for use and registration in the U.S.

U.S. Trademark Applications: Forget About Fraud. What About Lack of Bona Fides... the Silent Killer?

2011-04-03T12:31:00.000-07:00

An aspect of United States trademark law, as it applies to seeking federal trademark registration, that many, if not most, brand owners have not come to appreciate is the notion of a “bona fide intent” to use a trademark in U.S. commerce. Under U.S. trademark law, a brand owner may file a U.S. trademark application after or before its mark has been put to use in U.S. commerce. As long as a brand owner has a bona fide intent to use a mark in U.S. commerce as of the trademark application filing date, it may file an intent-to-use trademark application under Section 1(b), an application based upon a foreign registration under Section 44(e) and/or an application, via the Madrid Protocol, based upon a foreign application or registration under Section 66(a), of the Trademark Act.

U.S. Trademark Act Section 1(b) (15 U.S.C. §1051(b)), states that “a person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may apply for registration of a mark.” Likewise, Trademark Act Sections 44 and 66, which apply specifically to foreign applicants, also require that foreign applicants have a bona fide intention to use their marks in U.S. commerce by the date on which they file their U.S. trademark applications.

There are several reasons why domestic and foreign brand owners file “intent to use” trademark applications instead of waiting until their marks have been put to use. One reason is to “reserve” their “marks” with the United States Patent and Trademark Office prior to actual trademark use while they, for example, create branding strategies, make contracts with manufacturers, undertake product research and development and negotiate with licensees. Another reason to file an intent-to-use trademark application prior to a mark’s use is to see whether the Office will reject the mark’s registration based upon substantive grounds (i.e., likelihood of confusion with a third party mark and/or non-distinctiveness). In any event, a trademark owner relying on the intent to use filing basis of Section 1(b) still must put its mark to use before a registration certificate can issue.

In addition to the intent to use filing basis of Section 1(b), foreign applicants may rely upon Sections 44(e) and 66(a) of the Trademark Act to secure registration simply because they may do so without having to actually use their marks in United States commerce. However, in order to maintain their registrations, they still must put their marks to use by the 6th year anniversary of their respective registrations or the Office would cancel them on the ground of non-use. Although foreign applicants may secure registration without ever having used their respective marks in the United States, they still must have a bona fide intent of using their marks in the United States as of the trademark application filing date.

Accordingly, for whatever the reason, a U.S. trademark applicant filing an application requiring a bona fide intent to use the mark must have a bona fide intent to use the applied-for mark in U.S. commerce on or in connection with the goods and/or services listed in an application as of the application filing date.

Failing to have the prerequisite bona fide intent to use the applied-for mark in U.S. commerce by the date on which an application is filed may result in a third party challenge to the validity of a pending trademark application, an issued trademark registration and even an applicant’s legal right to continue to use the applied-for trademark in the United States. Although a brand owner may believe that it owns valid and proprietary rights in a certain trademark due to it’s recently filed and approved trademark application or issued registration that was based upon a trademark application requiring bona fides, it may, in actuality, have no enforceable trademark rights. Such potential misfortune, however, would likely only become relevant should a third party challenge the validity of an application or registration on the ground of a lack of bona fides.

Third party attacks on the validity of a trademark application or registration – and ultimately potentially on the validity of the mark itself - on the basis of a lack of bona fides may arise in the context of trademark registration opposition and registration cancellation proceedings before the United States Trademark Trial and Appeal Board – the administrative Board for the Trademark Office (the “Board”). Trademark registration opposition and registration cancellation proceedings are similar to federal litigation, not only in terms of procedure but also in terms of expense, which can easily move well into six figures. Of great importance, and what can be of great concern for brand owners, is the fact that a trademark registration cancellation proceeding may be lodged against a trademark registration on the basis of priority of rights – and a claim for lack of bona fides – during the first five years of registration. Meaning that a third party could potentially successfully cancel a brand owners trademark registration, along with it its proprietary trademark rights, and possibly compel the discontinuance of the registered mark, which may result in the brand owner undertaking an expensive re-branding initiative, any time during the first five years of registration.

The Board has made clear that the absence of any documentary evidence on the part of an applicant regarding its intent-to use a mark in U.S. commerce constitutes objective proof that is sufficient to prove that the applicant lacks a bona fide intention to use its mark in commerce. The Board has also made clear that certain documentation in existence as of the application filing date, including marketing plans for a product launch, patent applications for the relevant products, board minutes reflecting discussions about a product launch, evidence of discussions with potential manufacturers and licensees will not, in and of themselves, prove that an applicant had a bona fide intent to use the applied-for mark if such documentation makes no mention of the applied-for mark. Such evidence, while establishing intent to launch a product, does not establish the prerequisite intent to use the applied-for mark for that product. Furthermore, the Board has stated that Congress did not intend the issue of lack of bona fides to be resolved simply because an officer of an applicant later testifies that applicant “had a bona fide intent to use the applied-for mark as of the application filing date.” Furthermore, the act of filing an intent to use application in and of itself does not meet the bona fides standard.

Case Study

Brand owner A files an intent to use trademark application under Sections 44(d), 44(e) and 1(b) of the Trademark Act on January 1, 2010 for the mark Good ‘N Fresh for yogurt. The trademark examining attorney approves the mark for publication on April 1, 2011 and, as a result, Brand Owner A moves ahead and launches its line of yogurts nationally on April 15, 2011 under the mark Good ‘N Fresh.

On January 2, 2011, Brand Owner B files an intent to use trademark application under Section 1(b) of the Trademark Act for the mark Good And Fresh! for yogurt. Then on January 3, 2011 it begins to use its mark for yogurt. On July 1, 2011, the Office refuses registration of Brand Owner B’s trademark on the basis it is confusingly similar to Brand Owner A’s mark depicted in its previously filed trademark application (Good And Fresh! vs. Good ‘N Fresh).

Because Brand Owner A filed its intent to use trademark application before Brand Owner B filed its application, and because Brand Owner B cannot establish use of its mark Good And Fresh! before Brand Owner A’s application filing date, Brand Owner A’s pending application will likely bar the registration of Brand Owner B’s mark unless Brand Owner B is able to successfully object to Brand Owner A’s pending trademark application. Luckily for Brand Owner B, it already owns a federal trademark registration for the mark Good And Fresh! for fruits.

Once Brand Owner A’s mark is published for opposition, Brand Owner B files an opposition on the basis Brand Owner A’s mark Good ‘N Fresh for yogurt is confusingly similar to its mark Good And Fresh! for fruit. Brand Owner B also claims that Brand Owner A lacked a bona fide intent to use its mark in commerce as of its application filing date.

The opposition record later shows that Brand Owner A had no documentation in support of its bona fide intent to use its mark in commerce as of the application filing date. Based on that, the Board sustains Brand Owner B’s opposition and orders Brand Owner A’s application cancelled. Because Brand Owner B’s intent to use application was filed before Brand Owner A started using its mark Good ‘N Fresh, Brand Owner B, assuming its application is also not vulnerable to attack on any grounds, is able to “leap frog” over Brand Owner A’s “prior rights” – which were granted by its earlier-filed trademark application - and likely compel Brand Owner A to cease all use of its mark Good ‘N Fresh for yogurt.

Had Brand Owner A taken the time to prepare a marketing plan, which included the intended use of the mark Good ‘N Fresh, prepared artwork for product packaging depicting the applied-for mark, memorialized, in the minutes of a meeting, the intention to use the applied-for mark or created any other documentation able to establish its bona fide intent to use the applied-for mark prior to the filing of its intent to use application, it may have been able to defend the opposition proceeding filed by Brand Owner B and continue to use its mark Good ‘N Fresh. It would also have likely been able to prevent Brand Owner B from using its mark Good And Fresh! for yogurt.

Brand owners that base their U.S. trademark applications on filing basis that require a bona fide intent to use the mark must take notice of this issue and take those steps required under U.S. trademark law necessary to establish their bona fides – or potentially fall victim to third party challenges that may result in the loss of trademark rights and need to spend tens or even potentially hundreds of thousand of dollars to re-brand their products.

Brand owners that have filed applications with filing basis requiring a bona fide intent to use a mark may want to conduct an audit of their pending trademark applications and issued registrations to see whether it makes business sense to re-file fresh trademark applications for some of their marks in an effort to head off claims of “lack of bona fides” that could potentially result in the loss of valuable trademark rights.

Trademark Titan Blog’s Recommended Read for Marketers, Brand Managers, Business Owners and Trademark Attorneys: Positioning – The Battle for Your Mind

2011-03-12T09:24:00.000-08:00

One of the all-time classic books on branding is Positioning – The Battle for Your Mind by Al Ries and Jack Trout. Although the book was written a number of years ago – as evidenced by its examples – it’s still nonetheless a must read for marketers, brand managers, business owners and trademark attorneys, even in today’s social media world.

I was fortunate enough to have learned about this book by one of my good Canadian patent and trademark attorney colleagues [Philip] during a Blue Jays baseball game while attending the 2006 International Trademark Association’s annual meeting in Toronto. Since then, I have sent numerous copies of this book to a number of my clients and branding friends as a “must read.” One of those individuals has since moved to another company and was recently named the Director of Marketing for the parent organization overseeing global branding. In an e-mail the other day, he informed me that one of the first things that he asked his team to do once he was elevated to his new position was “read this book.”

This book has allowed me to not only better understand what goes on in many of my clients’ “marketing heads,” but also be an advisor for many of my clients on brand positioning strategies as it relates to brand name selection. Let’s face it; the brand name is, in my opinion, the “face” of the branding strategy. As I have blogged about on a number of occasions [including here, here and here], brand name selection can be the difference between brand failure and brand success.

Thank you Philip for your friendship and for offering me some of the best advice that I’ve been given in my many years, which was “Roger, you need to read this book.”

I now share Philip’s advice with you: please take a few hours out of your day, weekend or week and “read this book.” You won’t regret it and, if you’re like me, you will probably never think about branding and brand name selection the same way again.

Here is the link to Amazon. However, if you can’t wait, go on down to the local book store, buy a cup of coffee or tea, sit back, relax and change your way of thinking.

Trademark Titan Blog Triple "Re-Play": From Rules for Internet Brand Names to a Global Trademark Launch

2011-02-19T08:34:00.000-08:00

I want to thank you, the readers from around the planet, for stopping by from time to time to view my blog. You help motivate me to write about issues relating to trademarks and brands that I’m most passionate about. This post highlights three of Trademark Titan Blog’s most popular posts.

The results are in...the readers’ choices are…

Ten Essential Rules for Internet Brand Names

1. Make sure that the .com domain name is available. Only select names that will correspond to a .com domain name. Consumers will head straight to…

6. Suggestive names. Names that are suggestive of the product category will tend to attract customers and may even help build customer loyalty. A suggestive name helps…

10. Don’t fall victim to domain name renewal scams. Don’t rely upon third party services to renew your domain name unless…

Podcast: Trademark Titan Blog and TheFlyPod.Com Sit Down Again to Discuss the Intricacies of Intellectual Property Law (Including Trademarks, Copyrights and Patents)

Late last year I had another opportunity to sit down with Gary Puckett – one of the pioneers of podcasting and founder of Fly Paper Productions, LLC - to discuss some of the intricacies between certain categories of intellectual property (e.g., patents, trademarks, copyrights and trade secrets). We also briefly discussed some of the hot issues affecting the worlds of patents, trademarks and copyrights, including legal issues impacting social media and Internet activities as well as the impending launch of…

Launching A Global Brand: Eight Essential Considerations

Many factors come into play when launching global brands and brand names. Just ask those that do it for a living! As for the brand name itself, I’ve listed below some of the factors brand owners should consider well in advance of product launch. And, yes, I do mean well in advance of product launch. Do I need to say that one more time? I know that I do, but I won’t.

Below are eight aspects brand owners should bear in mind when planning a global...

Next post: Utility Patent and Trade Dress Protection: Has a Line Really Been Drawn in the Sand?

The Product Design IP Trifecta: Design Patents, Copyrights and Trade Dress

2011-02-06T12:59:00.000-08:00

I had a conversation recently with a very fascinating fashion designer from New York City about securing intellectual property protection for her inspirational designer products. That conversation has inspired this blog post, for more than one reason. Although this post was inspired by a NYC fashion designer, it would still be relevant for designers and manufactures of various types of products from furniture and automobile parts to salt and pepper shakers.

A common question asked by clients is “how can we protect our product designs from knockoffs?” Generally, those options include various types of intellectual property protections, including copyright registrations, trademark registrations, common law trademark protection and/or design or utility patents. Due to the arcane nature of intellectual property laws, most owners of intellectual property rely upon the expertise of intellectual property attorneys to ensure they maximize their protection and don’t lose valuable rights due to missteps or failure to timely act.

If your company is about to launch a new line of jewelry, toys, industrial containers or shoes, how might you go about protecting those products from “copycat” knockoffs by competitors or Chinese manufacturers? If your intellectual property attorney advises that a design patent is available, should you and your attorney stop there? Or would it be prudent to also consider copyright and trade dress protection for your designs? “If I have patent protection, why should I worry about copyrights or trademarks? After all isn’t patent protection the “best” type of intellectual property?” There are a number of reasons why copyright registration and trade dress protection for product designs would enhance and compliment design patent protection. Those reasons include the length of protection afforded by design patents, copyrights and trademarks (or in this case “trade dress”) and what aspects of products may be protected by each.

While design patents last for fourteen years, trade dress protection may endure in perpetuity – or at least as long as the product design is put to use -- and copyright protection generally endures for the life of an artist plus seventy years and for an anonymous work, a pseudonymous work, or a work made for hire, ninety-five years from the year of first publication or 120 years from the year of creation, whichever expires first.

Summary of Coverage and Purposes of Design Patents, Trade Dress and Copyrights

Design Patents

Design patents protect ornamental, non-functional, designs of functional products, such as ornamental features of earrings, vehicle hubcaps, chairs, containers (e.g., original Coca-Cola bottle), and computer icons. Design patents prevent others from legally manufacturing, importing, selling or using the patented design for 14 years.

One benefit of a design patent over trade dress protection is that a design may be patented without ever having commercially used the design. Trade dress protection for a product design, however, is only available after the product has been put to commercial use and only once the product design itself has achieved - what is known as - “acquired distinctiveness;” meaning that consumers have come to associate the shape of the product itself or an aspect of the product design as identifying its source. One benefit of design patent over copyright is that in order for a product design to be eligible for copyright protection, the design feature must be conceptually separable apart from the product’s functional aspect. If the product design is that of the shape of a handbag, for example, obtaining copyright protection is likely not an option. If, however, the handbag features an original ornamental picture or design, then copyright protection should be available for that aspect.

Trade Dress

Trade dress protection may be available for a product shape, but only if it has achieved acquired distinctiveness and is not considered functional. A product design is considered functional, from the perspective of trademarks, if the design is considered essential to the use or purpose of the product or if the design affects the product’s quality or cost of manufacture. Thus, as long as the product shape functions as a source identifier (e.g., it has achieved acquired distinctiveness) and it is not “functional,” trade dress protection should be available under the Lanham Act – even if the trade dress itself has not been federally registered.

One advantage of trade dress over design patent protection is that trade dress protection, once achieved, will generally endure forever, as long as the product design is put to use, while design patents endure for only 14 years.

A strategy employed by some product designers is to seek design patent protection for their product designs and then, during the 14 year monopoly term, carry out a branding strategy (i.e., “look for advertising”) that seeks to create the prerequisite acquired distinctiveness of the design itself in order to acquire trademark – or trade dress – rights in the design. Then once the design patent expires, trade dress rights would prevent competitors from legally creating the same designs if their use would cause a likelihood of consumer confusion as to the source of the parties’ respective products.

The majority of courts have held that design patents rights and trade dress rights may peacefully co-exist for the same product, since patent and trademark laws carryout different purposes. Some courts, however, have questioned that position.

In Kohler Co. v. Moen, Inc., 29 USPQ2d 1241 (7th Cir. 1993), Kohler sought to oppose trademark/trade dress registration for one of Moen’s designs of a faucet handle on the basis granting such trademark protection for a once-patented product design conflicts with existing patent laws. In rejecting Kohler's arguments, the court said “[T]he trademark owner has an indefinite term of protection, it is true, but in an infringement suit must also prove secondary meaning and likelihood of confusion, which the owner of a design patent need not do; there is therefore no necessary inconsistency between two modes of protection.” The court also stated that “while a patent creates a type of monopoly pricing power by giving the patentee the exclusive right to make and sell the innovation, a trademark gives the owner only the right to preclude others from using the mark when such use is likely to cause confusion or to deceive."

Copyrights

Copyright allows the author of original works to prevent others from copying it for a term of the author’s life plus 70 years. With respect to achieving copyright protection for aspects of product design, the design itself must be a separable element from the product’s functional use; meaning that the design be of an artistic nature and not dictated by the function of the product. In other words, copyrights protect against the copying of non-functional aspects of created works.

So when it comes to seeking intellectual property protection for your product designs, you will want to consider not only design patent protection, but also look at the long-term (beyond 14 year patent term) by federally registering any copyrightable aspects and creating a branding strategy aimed at achieving trade dress protection.

To see how these different types of intellectual property rights may play out in a suit for infringement, take a look at the recently filed case of Mint, Inc. v. Shokomoko and Amazon.com, Inc. (filed in the Southern District of NY) involving the salt and pepper shaker depicted above (on techdirt.com website).

Trademark Titan Blog and TheFlyPod.Com Sit Down Again to Discuss the Intricacies of Intellectual Property Law (Including Trademarks, Copyrights and Patents)

2011-01-16T05:32:00.000-08:00

Late last year I had another opportunity to sit down with Gary Puckett – one of the pioneers of podcasting and founder of Fly Paper Productions, LLC - to discuss some of the intricacies between certain categories of intellectual property (e.g., patents, trademarks, copyrights and trade secrets). We also briefly discussed some of the hot issues affecting the worlds of patents, trademarks and copyrights, including legal issues impacting social media and Internet activities as well as the impending launch of new top level domain names.

I would like to invite you to listen in on our latest conversation.

I would also like to thank Gary for a second opportunity to be a part of TheFlyPod.com podcasts and American Legal podcast series. I encourage you to browse TheFlyPod.com program catalog and download those programs of interest to you and to periodically visit TheFlyPod.com site for new and exciting programs.

Any comments? Please let me know. Look forward to hearing from you.

"ThumbDrive" Held Not Generic For Flash Drives By U.S. Trademark Trial and Appeal Board: Right Decision?

2011-01-08T10:51:00.000-08:00

I've seen a bit of discussion lately about a recent decision issued by the U.S. Trademark Trial and Appeal Board (the “Board”) on the issue of trademark genericness. Much of that discussion seems to center around “why would the Board render such a decision?” I’ve had a chance to read the decision and give it some thought. I agree with the Board, on this one.

In the precedential decision of In re Trek 2000 International Ltd., the Board held that the United States Patent and Trademark Office (“USPTO”) failed to meet its burden to establish by clear evidence that the term THUMBDRIVE is generic for flash drives, thus unprotectable as a trademark.

Background

Trek 2000 International sought registration of the mark THUMBDRIVE on the Principle Register, on the basis of acquired distinctiveness, for portable digital electronic devices for recording, organizing, transferring, storing, and reviewing text, data, image, audio and video files; computer software for use in recording, organizing, transferring, storing, and reviewing text, data, image, audio and video files on portable digital electronic devices. Although Trek already owned a trademark registration on the Supplemental Register (the register for marks capable of becoming trademarks) for the mark THUMBDRIVE, Trek sought registration of the mark on the Principal Register (the register for recognized trademarks) on the basis the mark had acquired trademark status through acquired distinctiveness (meaning that consumers had come to recognize the term THUMBDRIVE as referring to the source of the goods). On a side note – it’s my opinion that the coined term THUMBDRIVE appears to be inherently distinctive for flash drives. It probably never deserved to find its way onto the Supplemental Register.

Initially, the examining attorney approved the mark for publication. However, shortly thereafter, the examining attorney requested jurisdiction be restored. Once the application was restored with the examining attorney, she rejected the application on the basis the term THUMBDRIVE is generic for the goods – thus not protectable as a trademark. Trek later appealed that decision to the Board.

On appeal, the Board had to determine, based upon the evidence before it, whether the term THUMBDRIVE is generic for flash drives.

Trademark Law Principles - Genericness

Whether a particular term is generic, and therefore cannot be protected as a trademark, is a question of fact. The determination of whether a term is generic is therefore, based upon the evidence made of record. The critical issue is whether that evidence shows that the relevant purchasers use - or understand - the term sought to be registered to refer to the category of products or services in question. Making that determination involves a two-part inquiry: First, what is the genus or category of products or services at issue? Second, is the term sought to be registered …understood by the relevant public primarily to refer to the genus or category of products or services? Evidence of the public's understanding of a term may be obtained from any competent source, including testimony, surveys, dictionaries, trade journals, newspapers and other publications.

The primary purpose for finding that a term is generic, thus not eligible for trademark protection, is to prevent competitive harm. As noted by the Court of Appeals for the Seventh Circuit:

To determine that a trademark is generic and thus pitch it into the public domain is a fateful step. It penalizes the trademark's owner for his success in making the trademark a household name and forces him to scramble to find a new trademark. And it may confuse consumers who continue to associate the trademark with the owner's brand. …The fateful step ordinarily is not taken until the trademark has gone so far toward becoming the exclusive descriptor of the product that sellers of competing brands cannot compete effectively without using the name to designate the product they are selling.

Ty Inc. v. Softbelly's Inc., 69 USPQ2d 1213, 1215 (7th Cir. 2003).

It is well established that the availability of other words for competitors to use does not, by itself, transform a generic term into a capable trademark. However, where the evidence of record does not show that competitors use the designation in issue, this may create doubt, depending on the totality of the record, as to whether a term primarily refers to a genus of products or services such that "sellers of competing brands cannot compete effectively without using the name to designate the product they are selling."

USPTO’s Evidence of Genericness

The examining attorney offered the following types of evidence in support of her position that the mark THUMBDRIVE is generic:

1. Web page printout defining THUMB DRIVE as “one of many terms used in popular language for USB flash drive.”

2. Web page printout defining “USB flash drive” as a “small, keychain-sized flash memory device…also called a thumb drive.”

3. Excerpt from a web page defining “flash drive” as “a portable storage device...also called flash disk, key drive, thumb drive…."

4. Web page printout that says “Do you have an old thumb drive….”

5. An article that says “This thumb drive will self-destruct in 10 seconds….”

6. Commentary web pages that use the term thumb drive as referring generically to flash drives.

Based on the foregoing type of evidence submitted by the examining attorney, she argued that
the evidence of record is competent and diverse and adequately shows the relevant consumers’ understanding of the term THUMBDRIVE as identifying a genus of goods such as those identified in the instant application.

Applicant’s Evidence Against Genericness

As you would expect, Applicant respectfully disagreed and offered the following types of evidence:

1. Declaration with U.S. sales figures of 4.3 million dollars for THUMBDRIVE branded products between 2002 and 2007, uses of the mark THUMBDRIVE on the Internet by Applicant and third parties, a statement that Applicant coined the term in 2000, a statement that Applicant co-branded the mark THUMBDRIVE with other third party companies and a listing of Applicant’s “family of THUMBDRIVE marks.” (To read more about a "family of marks," check out my blog post here)

2. Articles and media usage of the term THUMBDRIVE as a recognized trademark.

3. Wikipedia entry for “USB flash drive” that recognizes the term THUMBDRIVE as a trademark of TREK and a statement that the term “USB flash drive” has become the defacto standard term for these types of devices.

4. Negative dictionary evidence: Merriam-Webster dictionary does not list the term THUMBDRIVE.

5. Samples of competitors’ websites that show use of the term “flash drive” as used as the generic term for the products.

6. Samples of Applicant policing its trademark THUMBDRIVE. Applicant submitted copies of letters to media outlets, whereby those parties agreed not to use THUMBDRIVE generically.

Board’s Decision

The Board noted that to deny the statutory federal registration, there must be clear and convincing evidence of the invalidity of that property right and a sound public interest served by its forfeiture. The Board went on to state that the “protection of the public interest includes ensuring that sellers who must use a particular term to compete effectively can do so.…”

The Board began by answering the first inquiry: what is the genus of goods? The Board concluded that the genus of goods includes those goods listed in the subject application. The Board next considered the second inquiry: the relevant consuming publics’ understanding of the term THUMBDRIVE. Is it perceived as a trademark or nothing more than a generic term for flash drive devices?

The Board first noted that the USPTO must prove with clear evidence that a term is generic. The Board also noted that although the evidence of record shows use of the term THUMBDRIVE as a generic term, it also shows the origin of that term being a trademark and extensive use of that term as a trademark. The Board also observed that the record shows that the term “flash drive” is the commonly used term of art for the subject products. Not looking so good for the examining attorney early on. But wait, there might still be a chance for the examining attorney recover from these early blows...

The Board went on by analyzing the examining attorney’s submitted evidence. It noticed that certain of the media references submitted by the examining attorney involved publications that agreed to stop using the term THUMBDRIVE generically. The Board also observed that with regard to dictionary definitions, the record shows that “the more mainstream references” do not have listings for “thumbdrive,” and two of the three references from the examining attorney’s evidence are definitions for another term, “flash drive,” where “thumb drive” is merely listed as a synonym. The Board was clearly not impressed with that evidence as demonstrated by its following statement: “we review this as weak evidence of genericness.” The Board also noted that while the record includes a few examples of online retailers using the term THUMBDRIVE generically, “it is quite noticeable that there are no examples of competitors using this term, and applicant submitted excerpts from competitors’ websites showing the absence of that term and the use of “flash drive” as the name for the goods.”

With the lack of competitor usage of the term THUMBDRIVE after ten years of use as a trademark, the Board concluded that such lack of use tends to indicate that the term THUMBDRIVE has not fully entered the public domain. It also stated that when a coined term used as a trademark is taken up by the public but not by competitors and the stakes “are the fateful step” of full “eradication” of an applicant’s commercial rights, the evidentiary burden to establish genericness is heavy indeed. The Board also went on to note the following about today’s technological world:

“Today, with a 24-hour news cycle and 24/7 online global activity, undoubtedly many trademarks are misused repeatedly, perhaps, in part, because there is less time for editing and reflection before news reports or blog posts are released, and, in part, because what was the casual spoken word between people is now the written word posted to the world.”

The final blow to the examining attorney’s evidence came when the Board stated: “In other words, the evidence of record does not demonstrate a competitive need for others to use this term.” As a result, the Board concluded that the evidence creates doubt as to whether the term THUMBDRIVE is generic. As is the case with descriptiveness, any doubt as to whether a term is generic must be resolved in favor of Applicant. So the Board did.

Trademark Titan Blog Takeaways

1. Brand owners that fail to adequately police their trademarks run the risk, in limited situations, of losing their trademarks to the public domain.

2. Brand owners must not only police third party misuse of their trademarks, but also misuse in the media and in dictionaries.

3. Companies that launch new – never seen before - products must not only adopt brand names for those products, but must also adopt generic names or likely see their once valid trademarks become the name for the genus of product. Remember yoyo and escalator? Yep, once trademarks.

4. Once a trademark becomes genericized, it’s generally too late to worry about it. When consumers begin to use a trademark to refer to the name of the “thing” itself, it’s time for its owner to spring into action and correct the misuse. There is no time for delay.

5. Select marks that are inherently distinctive (and stay away from already or nearly generic terms), of which I have blogged about many times, including here, here and here.

ICANN Delays Introduction of New Top Level Domain Names: Six Actions Brand Owners Can Take Now In Advance of Launch

2010-12-24T03:25:00.000-08:00

The Internet Corporation for Assigned Names and Numbers ("ICANN”), the entity that oversees the Internet domain name system, has once again delayed the introduction of new generic top level domain names (“gTLDs”) until likely sometime in 2011. The chief issues continue to revolve around brand owners’ concerns over trademark protection and costs associated therewith, of which I have blogged about here.

As brand owners await ICANN’s imminent launch of various new gTLDs they should be reviewing and, if necessary, revising current domain name policies to meet anticipated new challenges. Below are six actions brand owners can take right now to ready themselves for the potential deluge of hundreds (and some argue thousands) of new gTLDs.

1. Determine annual budget. What’s the annual budget for 2011 for reserving or maintaining domain names that point towards active sites or redirect to active sites and for pure defensive plays (those domain names reserved for the purpose of keeping them out of the hands of cyber squatters and Domainers)? Once you have that number, plan accordingly.

2. Conduct periodic audit of domain name portfolio. An audit should determine which of your current domain names could be dropped due to little or no activity. If there’s little or no activity on certain sites, than those domain names probably have little or no value to cyber squatters anyways. Consider letting those go in lieu of more “valuable” domain names.

Maintain those .COM – and possibly those .BIZ, .NET, .INFO and country code - domain names that correspond to common misspellings of brand names (consider new devices on market and what typos are being made), for key brand names in key territories, for generic product names (i.e., runningshoes.com for running shoe company) and for potentially damaging sites such as yourtrademarkSUCKS.com. Dot COM domains are still the most coveted of gTLDs by Domainers and cyber squatters. I suspect that cyber squatters would prefer NIKEapparel.com over Nike.gardening or FORDvehicles.com to FORD.movies.

Add new domain names that correspond to newly adopted gTLDs that are likely to result in misdirected Internet traffic and potential lost profits. For example, automakers should reserve domain names that correspond to .AUTO, .CARS and .TRUCKS gTLDs. However, I really can’t think of a valid business reason why auto manufacturers would want to allocate funds to reserve domain names that correspond to unrelated gTLDs, such as Highlander.food and F150.gardening. Unless there’s an issue of dilution, those funds should probably be allocated to enforcement activities.

Also, as new brand names are launched, reserve priority domain names that correspond with those new names. For those brands that go to the graveyard, consider allowing those corresponding domain names to expire in due time.

3. Establish policing policy. In addition to compiling a healthy domain name portfolio, brand owners must also actively police third party registrations of potentially harmful domain names. A global watch program can cost thousands of dollars annually, so plan accordingly if such a service is desired or is necessary. Alternatively, brand owners can opt to conduct periodic in-house searches.

4. Establish consistent policy for enforcing brands. Create a policy for taking action against third parties that reserve potentially harmful domain names. The policy should be detailed. Determine in advance – outlined in policy – which “infringements” warrant action. When a credible threat is detected, take quick and decisive action. However, pick your battles as funds are likely limited.

5. Don’t overprotect. Brand owners simply cannot reserve all domain name permutations. It’s just too costly. That will become more evident as new gTLDs are launched. A better approach is to combine a healthy domain name portfolio with consistent monitoring and enforcement.

6. Take a deep breath and relax. For most brand owners, the launch of new gTLDs will likely go unnoticed. For those same brand owners, there will likely be bigger fish to fry in 2011.

To read more about this issue, check out Economic Considerations in the Expansion of Generic Top-Level Domain Names: Phase II Report: Prepared for ICANN that was released this month.

Trademark Gaff #27: Thinking You Can Protect Generic Terms as Trademarks By MissSpelling Them

2010-12-11T04:53:00.000-08:00

Ok. This is a cute move in an attempt to thwart trademark law. Unfortunately, it likely isn’t going to work. Thinking that you can simply misspell a term that is otherwise generic for your products is a fruitless attempt to build trademark rights; and quite frankly, likely a waste of time, money and effort. As Nike® would not say: “Just Don’t Do It!” You will get nowhere fast.

Simply put, if a term is considered generic for your products, a novel spelling of that term is also generic if purchasers would perceive the different spelling as the equivalent of the generic term. The only exception to that rule is if you’re able to successfully misspell a generic term in a manner that the misspelling changes the term’s generic significance. However, such a strategy is unlikely to result in a protectable trademark.

In my own practice I see brand owners attempting this strategy quite often. One of the more common attempts is to misspell the term “cleaner” for cleaners. You’ve probably seen names of cleaners that use the term Kleener. That strategy is not a strategy at all. I’d consider it more of a branding gaff. The same also holds true generally for descriptive terms.

Strategy: Select Inherently Distinctive Marks Then Add Generic Terms

If you must use a generic or descriptive term or terms in your mark because you want to “tell” the world what your product is, then I give you permission to do so; on one condition, however. You select a distinctive mark (i.e., suggestive, arbitrary or coined) and then simply add a generic term. Think of DieHard® Batteries and CloseUp® Toothpaste. That simple. Now go and build your brand.

More Puzzling Statements in National Arbitration Forum UDRP Decision: The New York Times Company v. Name Administration Inc. (BVI)

2010-11-28T08:38:00.000-08:00

I'm so fired up over this one that I had to break from another project to write this post. The recent Uniform Domain-Name Dispute-Resolution Policy (“UDRP”) decision in The New York Times Company v. Name Administration Inc. (BVI) has me amped for two reasons – none of which relate to the holding itself in favor of BVI.

In this case, The New York Times sought transfer of the domain name dealbooks.com from BVI. The New York Times argued that it began using the mark DealBook in 2001 under common law and secured federal trademark registration of that mark in 2006. BVI reserved the subject domain name in 2004. BVI asserted that it used the subject domain name in connection with a web site that advertises online gaming with travel booking. In September 2010, The New York Times filed its UDRP complaint requesting transfer of the subject domain name. There are other facts to this case, of course, but for today’s post, I’m only concerned with those basic facts.

The UDRP policy requires a complainant to prove each of the following three elements to obtain an order for transfer of a subject domain name:

1. The domain name registered by Respondent is identical or confusingly similar to a trademark in which Complainant has rights; and

2. Respondent has no rights or legitimate interests in respect of the subject domain name; and

3. The domain name has been registered and is being used in bad faith.

The Panelists first turned to prong one of the UDRP test. Although Complainant’s mark, DealBook, and subject domain name, dealbooks.com, are confusingly similar – the Panel had to also decide whether Complainant had trademark rights in its mark at the time BVI reserved the subject domain name in 2004.

Since The New York Times didn’t own a federal trademark registration as of the date on which BVI reserved the subject domain name, The New York Times didn’t have presumptive trademark rights in its mark DealBook. Accordingly, The New York Times had to establish that it had common law trademark rights in its mark as of the date on which BVI reserved the subject domain name. After reviewing the evidence of record in support of The New York Time’s claim of prior common law rights, the Panel decided that such evidence didn’t support a finding that The New York Times had acquired common law trademark rights in its mark prior to the reservation of the subject domain name. Accordingly, the Panel held in favor of BVI. In so holding, however, the Panel also went on to make the following odd statement:

“As Complainant was computer savvy regarding Internet usage and domain names as well as knowledgeable concerning trademark law, Complainant’s failure to secure and register the disputed domain name or seek governmental registration of its mark until 2006 supports a conclusion that Complainant did not deem that it had any exclusive rights to enforce until that time. Thus Respondent’s registration and use predates Complainant’s rights in the mark.”

What? Because Complainant failed to seek federal registration of its mark until 2006, Complainant didn’t deem that it had any exclusive trademark rights to enforce until that time? How does the Panel know what The New York Times thought? There are plenty of reasons why brand owners choose not to seek federal trademark registration for their marks. Is that a new factor in determining trademark rights under the UDRP policy? I find that statement to be bazaar and, quite frankly, misguided.

Another interesting issue raised by the Panel in this case regards the issue of laches. In this case, BVI raised the defense of laches. Laches is a defense to a claim of trademark infringement. The essence of the laches defense is that a complainant has unreasonably delayed in asserting its rights and, as a result, the complainant is no longer entitled to its claim.

Although UDRP policy doesn’t specifically express the recognition of a laches defense, this Panel, contrary to just about every other UDRP panel, stated in its decision that laches should be a recognized defense in UDRP cases. The Panel went on to state:

“The Panel does believe that the circumstances of this case are the type that support a decision for the Respondent based on laches.”

The Panel went on to make the following contradictory statement:

“Where such a Complainant fails to police its claimed mark and does nothing for a substantial time while a Respondent develops an identical domain name for its own legitimate purpose, laches should bar that Complainant from turning a Respondent’s reliance to its own unjust enrichment.”

But wait! If a Respondent develops its own “legitimate” business purpose in connection with a domain name – then UDRP policy mandates—under prong two (and three) of the test - that Respondent prevail in a UDRP proceeding. In such a case, laches is irrelevant. Furthermore, if a Respondent is found to have misappropriated a brand owner’s trademark and in so doing deceives the consuming public and profits off of a brand owner’s goodwill, then why should a cybersquatter be entitled to hide behind the defense of laches? Who’s truly being hurt here? A cybersquatter!

Although laches may reflect the strength of a complainant’s case – the reality is that laches should not be dispositive evidence that a complainant has approved or condoned a respondent’s use of complainant’s mark in a domain name. The fact that a brand owner has sat on his hands while a cyber-thief has made ill-gotten gains should not bar a brand owner from protecting its trademark rights and brand in a UDRP proceeding – late or not. Period!

Why Brand Names Are Like Running Shoes: Poor Selection Can Cause Serious Injury

2010-11-21T12:24:00.000-08:00

Don’t be one of those brand owners that has to learn the hard way. There is simply no reason to select brand names that are fundamentally incapable of winning the race. Recognizing that marks come in all different “shapes, colors and sizes” and, as a result, receive different levels of protection is a first step to building your brand name powerhouse. It can also be the difference between brand success and brand failure. Simply put, don’t fall victim to the “brand name trap.” Selecting the wrong brand name for your product can result in a “false start,” which can inevitably disqualify you from the race before it begins. Just as the difference between winning and losing a horserace can be fractions of a second, the difference between selecting a winning or losing brand name is a fine line that if not understood can result in brand failure.

If you were training for a marathon would you aimlessly select running shoes that couldn’t withstand a long and grueling race? Of course you wouldn’t. Then why do so many brand owners succumb to the temptation of aimlessly selecting trademarks that haven’t got a chance of taking their products over the finish line? Would you go out and purchase running shoes one week before a marathon? Hopefully you would purchase them well in advance so you have ample time to evaluate them, ensure they’re adequately comfortable and determine whether they're the "right" shoes for running a successful race. The same holds true for your trademarks. Aimlessly selecting your brand names without appreciating their varying levels of quality – or their blend of legal and marketing strength - can spell disaster for you, your company and its brands.

Trademarks range from terms that describe certain aspects of products to terms that are coined, such as the marks Kodak® and Xerox®. The types of marks consist of terms that are descriptive, suggestive, arbitrary or coined when used in connection with their associated products. Terms that are considered generic for certain products, such as “The Wine Company” for a company that sells wines and “Furniture.com” for a company that sells furniture online, can never be trademarks. The terms “trademarks” and “generic” are mutually exclusive. There is simply no such thing as a “generic trademark.”

Understanding the different levels of legal protection afforded by each type of trademark is an important aspect of the trademark selection process. Another aspect of the trademark selection process is appreciating marketing strength. When you combine the concepts of legal and marketing strength in your trademark selection process, you'll be well on your way to adopting brand names that have the potential for running ahead of the pack.

Ten Essential Rules for Internet Brand Names

2010-11-09T07:37:00.000-08:00

1. Make sure that the .com domain name is available. Only select names that will correspond to a .com domain name. Consumers will head straight to the .com. Have you ever entered .net or .biz in a URL? I haven’t. And if I can’t find the web site on my first try, I jump to Google®. If the .com domain is not available, select a different name and don’t fall victim to the “hyphenated” domain name. Have you ever used – or thought of using - a hyphen in a domain name?

2. Keep it short and simple. With all of today’s advertising noise and clutter, keeping the name short and simple is critical. Difficult-to-remember domain names are likely to result in misspellings, which may result in the loss of revenues to “typo-squatters.” Typo-squatters will “steal” your misspelled domain name and divert Internet traffic from your web site while generating revenue in the process. Don’t let that happen to you. Some of the best short and easy-to-remember Internet brand names are Yahoo, Amazon, Yelp and Woot.

3. Select a name that is alliterative. Brand names that are alliterative are easy to remember. Dunkin Donuts, Kristy Kreme, Blackberry and Roto Rooter are all good examples.

4. Select a name that is speakable. A name that is speakable is also easy to remember. Speakable names tend to receive more word-of-mouth advertising. Speakable names include Sears, Colgate, Pepsi and AeroMotive. Unspeakable names include Tokico, PLP and Chipolte. Names that are difficult to pronounce are difficult to remember, which spells disaster.

5. Spellability. Be sure that your Internet brand name is easy to spell. Hard to spell domain names tend to lose Internet traffic for their owners. They also tend to be victims of Internet pirates a/k/a “typo-squatters.”

6. Suggestive names. Names that are suggestive of the product category will tend to attract customers and may even help build customer loyalty. A suggestive name helps customers identify the attributes of a product and what a brand represents. Suggestive names include Die Hard, Close Up and Block Buster.

7. Reserve other domain name extensions. Registering the .com domain name is critical. But don’t forget to make defensive registrations for other extensions, including .net, .biz and .mobi. Registering other domain name extensions is an inexpensive way to defend against third parties from registering your brand names with other extensions and then profiting from them.

8. Reserve domain names for commonly misspelled terms. If your name can be spelled in several different ways, be sure to register, at a minimum, the .com domain name for that common misspelling. Reserving common misspellings of your brand name is another inexpensive way to prevent Internet pirates from diverting Internet traffic from your site.

9. Don’t forget to renew your domain name. Failing to renew a domain name can result in its loss. Not good for an Internet company! If you can afford it, apply for the longest possible term, and then calendar the renewal date.

10. Don’t fall victim to domain name renewal scams. Don’t rely upon third party services to renew your domain name unless you have an existing relationship with that company. Unsolicited renewal invitations should be ignored. Some of those unsolicited renewal invitations are scams. Some of those companies will simply take your money and not pay the renewal resulting in the loss of your domain name. Internet companies that lose their domain names lose what may be their most valuable assets.

Busting Trademark Myths: Part 1 of a Three Part Series

2010-10-29T02:47:00.000-07:00

There are a number of myths that exist with respect to trademarks generally and certain trademark rights. Those misbeliefs have the potential for financially devastating young companies and killing new brands right from the gate. Understanding key aspects of trademark law is essential for building strong foundations for companies and their brands. Just as business owners take time to create business plans, they must also take time to understand trademark rights and then, once they do, grab their brands by their horns and not let go.

Myth 1 Busted: The Best Trademarks Are Those That Describe Our Products Because They Save Us Money on Advertising.

Unfortunately, that is generally wrong. Although marketers love descriptive marks because they can “sell” products with little advertising budget, marketers fail to appreciate that descriptive marks are not immediately legally protectable. Meaning that competitors may also use that descriptive "trademark" without trademark infringement. The reason there’s no trademark infringement is because consumers generally don't perceive descriptive terms as source identifiers (or trademarks) but rather as descriptors about a product or service. Accordingly, all competitors are free to use those same descriptive terms to promote their products.

Turning descriptive terms into legally protectable trademarks usually takes many years and big advertising budgets! And some descriptive marks never reach trademark status. Think about that for a minute. A company can use a descriptive term as its "mark" for many years to later discover that it has no trademark rights at all. Even worse, its competitors can freely use its “mark!” Even if descriptive terms do acquire trademark rights (i.e., McDonalds and TV Guide) those rights are limited. For example, competitors may still use trademarks consisting of descriptive terms in a descriptive sense. Take for example the case of Whirlpool’s “Whisper Quiet” trademark for dishwashers. That mark was registered with the U.S. Patent and Trademark Office under section 2(f) of the Trademark Act. Meaning that Whirlpool admitted in its trademark application that its mark “Whisper Quiet” is a descriptive term – but has acquired trademark status through use. Although Whirlpool can stop competitors from using the term “Whisper Quiet” as a trademark, it likely can't stop competitors from advertising that their own dishwashers are "whisper quiet” too.

The better approach to selecting brand names is to select names that are at least suggestive of the products or services. For example, Grey Hound for bus transportation services, Die Hard for batteries and Close-Up for toothpaste. Then simply add “descriptive” wording to the mark (i.e., “Die Hard Batteries” and “Close-Up Toothpaste”). That simple.

Myth 2 Busted: Whoever Uses A Certain Trademark First Is ALWAYS Entitled To Exclusive Rights.

Unfortunately, that is not the case. Trademark rights in the U.S. (and some other countries) are geographic in nature. Meaning that trademark owners generally only secure trademark rights in those geographic regions in which marks are used (absent securing federal trademark protection).

For example: Company launches product and brand name XYZ in the North East on January 1, 2010. Company decides to accept an attorney’s advice not to seek federal trademark protection and simply “TM it.” As of the product launch date, there were no other similar marks on the market (or filed for at the U.S. Trademark Office) that would pose any barriers to the mark’s use. On January 1, 2012, Company decides to launch its product and brand name XYZ nationally. Unfortunately for Company, another company launched the confusingly similar trademark XYYZ for the same product in March 2010 in California. That company has since expanded aggressively from Western United States through the Midwestern and Southern parts of the U.S. Since trademark rights are geographic, Company will likely be barred from expanding into those geographic regions in which the second company has commenced use of the confusingly similar mark.

Had Company secured federal trademark registration prior to any third party uses of confusingly similar marks, Company would have had the exclusive right to expand nationally with its trademark XYZ.

Myth 3 Busted: Selected Marks Are Available For Use And Registration As Long As There Are No Other Competing Marks With The Same Spelling.

Wrong. A mark is available for use and registration only if there are no other marks considered confusingly similar. For example, Company selects the mark HIGHWAY (word only, no design element) for its transportation and logistics services. Company searches the United States Trademark Office database and finds the registered mark HI-WAYS with a design of a highway for transportation services. Although the marks are spelled differently and the selected mark HIGHWAY does not have a design element, the mark HIGHWAY would likely not be registrable and would likely be considered infringing of the registered mark HI-WAYS and design because the literal elements of the marks are phonetically similar and they convey the same connotation and because the parties services would likely compete within the transportation services field.

Stay tuned for my next post where I’ll bust three more trademark myths, including myths about domain names and "exclusive" rights granted by federal trademark registrations.

Revisiting The Four "D's" of Brand Name Selection

2010-10-18T17:54:00.000-07:00

Brand name selection does not have to be difficult. Proper consideration of brand names does take time and thought provoking analysis, however. Not considering the following four brand name factors could potentially prove fatal for a company’s new product launch.

1. Distinctiveness – Is the name legally protectable?

Terms/names that are considered to be generic for products are never protectable as trademarks. For example, the term Lawyers.com for providing legal services via online channels will never receive trademark protection. Selecting a generic term as a trademark is brand suicide.

Further, names that merely describe certain attributes of a product will not receive trademark protection upon first use and may never receive trademark protection. Although descriptive terms may become eligible for trademark protection once the “mark” has been put to continuous and substantially exclusive use, that can take years and tens of millions of advertising dollars. I hear marketing folks say that if my mark is descriptive, I don’t have to spend much money on advertising, right? If that were only true. In fact it takes MORE money and resources to advertise a descriptive “mark” because it can take tens of millions of advertising dollars to convert a legally unprotectable descriptive term into a recognizable trademark.

Tip: Select brand names that are legally protectable upon first use.

2. Distinguishable – Is the mark distinguishable from the competition?

Why select a mark that is not distinguishable from the competition? Although a selected mark may be “legally” distinguishable from competitors’ marks, it still may get lost in a noisy marketplace of similar marks.

Companies that use marks similar to their competitors’ marks run the risk of losing sales and potentially developing bad reputations that belong to their competitors. For example, if a competitor’s product with an overall similar name receives bad press or even worse kills someone, that publicity may inevitably rub off on those companies with products with similar names. Why take that risk?

Tip: Only select names that are legally protectable and sufficiently distinguishable from the competition.

3. Da Position – Does the company have a positioning strategy?

A brand name should communicate a product’s positioning strategy. Select a name that begins the positioning process. For example, what products have the slogans “Melts in Your Mouth Not in Your Hand” and “The Uncola?” Those slogans positioned their products at the top in their respective categories. Also consider whether a slogan can re-position the competition. Think about how Procter and Gamble re-positioned Listerine with the simple slogan "Medicine Breath." Re-positioning a competitor with a slogan is one way of gaining market share.

Tip: Select a mark or slogan that will capture the position or niche and then don’t let it go!

4. Da Attributes – What are prospective purchasers looking for?

Selecting a mark that suggests an advantage of a product or a result that consumers want from a product can be a game changer. Rather than look at how a company perceives its own product, a company should look at how consumers already perceive it’s product or similar product, then look for the solution in the mind of consumers. Then select a name that reinforces consumers’ perceptions. What do consumers want from car batteries, for example? Of course, they want a long-lasting dependable battery. That’s why the mark “Die Hard” has been a huge success.

Tip: Select marks that convey attributes desired by consumers.

Launching A Global Brand: Eight Essential Considerations

2010-10-08T14:11:00.000-07:00

Many factors come into play when launching global brands and brand names. Just ask those that do it for a living! As for the brand name itself, I’ve listed below some of the factors brand owners should consider well in advance of product launch. And, yes, I do mean well in advance of product launch. Do I need to say that one more time? I know that I do, but I won’t.

Below are eight aspects brand owners should bear in mind when planning a global brand name launch.

1. Does the name have language barrier issues? There have been many stories – some of which may be nothing more than folklore but are nonetheless fun to talk about - of companies launching new brand names to later learn – much to their chagrin - that they convey negative connotations in other languages and cultures. Take, for example, the well-known story of the Chevy Nova. As the story goes, the term NOVA in Spanish means, “won’t go.” Probably not the best name for a vehicle would you say? As the story continues, maybe it was the name itself that explains why the Nova didn’t do so hot in the Spanish speaking markets.

Companies must also know whether new brand names would have distasteful connotations in other languages and cultures. Another example is the story of PepsiCo launching the slogan “Come Alive with the Pepsi Generation” in China. The story goes that the meaning of the slogan was terribly lost in Chinese translation. Chinese speaking folks translated the slogan to: “Pepsi Brings Your Ancestors Back from the Grave.” Houston, we have a problem.

2. Consider adopting an international icon or logo. One great way of avoiding the language barrier issue is to adopt an international logo design. That way if the name has negative connotations in certain languages or cultures, the brand owner can either drop the name altogether or change the name but still use the universal design logo, which may become recognized across all languages and cultures. Think of the Good Humor® icon.

3. A term that is legally protectable in one country may not be protectable in another. A term or mark that is protectable in the U.S., for example, may not be protectable in the European Union or China. Although U.S. trademark law may render a mark suggestive, thus legally protectable upon first use in the U.S., EU or Chinese trademark laws may render the same term or mark as being non-distinctive, thus unprotectable. If there are any doubts as to a selected mark’s distinctiveness in a certain jurisdiction, an inquiry as to the mark’s distinctiveness should be made with foreign counsel. If it’s too late, and the mark has already been launched, one way to avoid the non-distinctiveness refusal in certain countries is to simply add a design element to the word mark.

4. Budget. Budget. Budget. Consider the costs of clearing and protecting selected marks in certain jurisdictions and countries. Although the cost to clear marks in all selected countries and jurisdictions may be cost prohibitive, it still makes sense to clear marks in those top priority countries/jurisdictions. Those “top” countries/jurisdictions are those that are expected to result in the majority of sales. Also, the costs to secure trademark registration protection on a global basis add up quickly. The best strategy is to know the marketing strategy and only seek protection in those jurisdictions that correspond with that strategy. If money is not an issue, and the brand owner fears competitors registering the name in certain countries where the mark will not be in use, then seeking defensive registrations may be part of the strategy.

5. Clearing and registering a mark in the U.S. does not mean the mark is clear to use in Canada, Mexico or any other country. Remember that trademark laws are country specific. A U.S. trademark registration does not generally grant the right to use the mark in any other country.

6. Does the brand owner want/need to reserve country code top-level domain (“ccTLD”) names? If a company wants to use ccTLDs (i.e., .CN for China or .JP for Japan), it should ensure that the domain names are available during the clearance stage and, if they are, reserve them immediately.

7. Where should trademark registration be sought? Deciding where to seek registration is an important aspect of the protection process. Due to cost barriers, companies should consider protecting marks in stages, which may mean over a certain number of years. Start with the top priority jurisdictions, including those jurisdictions where the majority of sales are expected to take place, customers are located, licensees are located, advertising is planned and manufacturing and distribution will take place. The lower priority countries are those of which sales are not expected to be of any significance for a few years. Protecting the name in the lower priority countries can simply be staged over coming years in an effort to spread out costs. Companies should be mindful of the brand expansion strategy, which could mean rolling out the product in certain countries over a 2, 3 or even 5 year period. It’s generally highly recommended that the trademark filings stay ahead of the product rollout strategy.

8. Trademark application filing strategy: National registrations, Community Trademark, International Registration? How about a combination of all three? There are a number of factors to consider when planning a filing strategy. Considerations should include national filings and their prosecution costs, vulnerability of home country applications or registrations on which International Applications are filed via the Madrid Protocol, the number of jurisdictions in which protection is sought, which countries or jurisdictions belong to the Madrid Protocol, first-to-file countries, distinctiveness of marks and potential for oppositions to registration in certain jurisdictions. There is not a “one plan fits all” strategy. Strategies should be considered on a case-by-case basis. Whether to use the Madrid Protocol and/or Community Trademark filing mechanisms or other jurisdictional filing mechanisms or a national application filing strategy or a combination of those options should be fully considered well in advance of product launch.

I cannot stress more that sufficient time should be allotted for planning a global filing strategy. In some instances, the time needed to clear marks for a global launch can take weeks and possibly months. And that’s if the first choice is available. So take some time out of your busy day of planning the branding strategy and give ample time to the planning of the brand name protection strategy – you will probably need it. Trust me.

Bill Introduced to Combat Copyright Infringement and Counterfeiting in United States: A Necessary Weapon to Combat Counterfeit Epidemic

2010-09-25T05:24:00.000-07:00

On September 20, 2010, it was announced that Senate Judiciary Committee Chairman Patrick Leahy (D-VT) and senior Republican member Orrin Hatch (R-Utah) would introduce the Combating Online Infringement and Counterfeits Act. This Act would give the U.S. Department of Justice the power to shut down web sites / disable domain names that are primarily designed, has no demostratable, commercially significant purpose or use other than, or is marketed by its operators, or by a person acting in concert with the operator, to offer -- goods or services, in violation of copyright or counterfeit laws, including offering the infringing goods or services themselves, offering access to such goods or services or providing a web site whereon users are directed to infringing goods and services via links.

Under the Act, as currently drafted, courts may issue a temporary restraining order, a preliminary injunction or an injunction against the domain name used by an Internet site dedicated to certain infringing activities. The Attorney General may commence an In Rem action against any domain name subject to the Act. For domain name registrars and registries located in the United States, a domain name will be deemed to have its situs in the judicial district in which (1) the domain name registry or registrar is located, or if there are multiple locations, where the registry operations are performed or (2) documents sufficient to establish control and authority regarding the disposition of the registration and use of the domain name are deposited with the court. If the situs of a domain name is in a foreign jurisdiction, the AG may still bring an action to prevent the importation of infringing goods and services into the United States.

The purpose of this Act is, of course, to reduce the flow of copyright infringing and counterfeit products into U.S. commerce, which may also protect U.S. consumers from infringing and unsafe products, job loss and protect company profits. Sheldon Whitehouse (D-RI) said that “The online sale of stolen intellectual property – whether pirated movies or music or counterfeit electronic goods or pharmaceuticals – hurts American companies, kills American jobs, and puts consumers at risk for defective products.”

This Act is a necessary weapon to combat a counterfeit epidemic that has hit the U.S. shores. To read more about our counterfeit epidemic, you can read my post.

If this Act is enacted, could it be misused to take down legitimate sites owned by Domainers? Unlikley. However, wouldn't this Act include Domainer sites used primarily for linking to other sites selling infringing and/or counterfeit goods? Absolutely.

Might this Act lead other acts aimed at the Domainer community? I highly doubt it. What do you think?

Food For Thought: What Legal Issues May Impact Your Social Media Activities?

2010-09-18T11:37:00.000-07:00

Time To Revisit The Federal Trade Commission's Updated Guidelines For Product Endorsements: Bloggers (Including Micro-Bloggers) Beware

2010-09-06T11:18:00.000-07:00

Over the past month or so, I’ve been asked by three bloggers whether they’re subject to the “new” FTC guidelines (released in 2009) concerning product and service endorsements. Each of those bloggers do – from time to time – accept “freebies” (either free products or services) in exchange for writing about those products/services on their respective blogs. I too receive those offers, but have yet to accept.

Given those recent inquiries, and the potential for bloggers to land in the crosshairs of an FTC false and deceptive advertising claim, I thought it was time to re-visit this issue and remind bloggers of the FTC guidelines regarding advertising and product/service endorsements.

Last year the FTC updated its Use of Endorsements and Testimonials in Advertising Guidelines (the “Guidelines”). Those Guidelines now expressly include advertising and endorsements made through social media, including podcasts, social media networks and blogs. The Guidelines are not new. They have simply been updated to keep pace with technological changes in media.

If you’re a blogger that’s paid to endorse/promote certain products or services -– or you simply receive freebies in exchange for blogging about them -- then the Guidelines apply to you. The reason is simple. When there exists a connection between an endorser (i.e., a blogger) and the seller of the endorsed product/service that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed.

Some of the things you need to know about the Guidelines are:

1. If there is a relationship between you and a product or service provider, i.e., you are being paid to give -- or you receive freebies in exchange for -- a blog review or endorsement (a “Relationship”), you must disclose that Relationship.

2. Blogger endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser.

3. Don’t make false claims or claims that cannot be substantiated as a “typical result.”

4. Blogger endorsements may not convey any express or implied representations that would be deceptive if made directly by the advertiser/product manufacturer.

5. Disclosure of a Relationship still applies to micro blogging via Twitter. Simply use the “#paid_ad” hash tag or something similar. It’s only 8 characters.

6. You can’t talk about your experience if you haven’t tried the endorsed product or service.

7. If you tried the product or service and didn’t think it was “great!” -- you can’t say you think it’s great! That’s simply deceptive advertising and in violation of advertising laws. Why deceive loyal followers?

8. Advertisers/product manufacturers are subject to liability for false or unsubstantiated statements made by blogger endorsers.

9. Failure of bloggers to disclose Relationships may result in the bloggers themselves becoming liable for deceptive advertising practices for statements made in the course of their endorsements.

10. Bloggers that make false or unsubstantiated claims about a product or service may be liable for deceptive advertising practices.

An example:

A skin care products advertiser participates in a blog advertising service. The service matches up advertisers with bloggers who will promote the advertiser’s products on their personal blogs. The advertiser requests that a blogger try a new body lotion and write a review of the product on her blog. Although the advertiser does not make any specific claims about the lotion’s ability to cure skin conditions and the blogger does not ask the advertiser whether there is substantiation for the claim, in her review the blogger writes that the lotion cures eczema and recommends the product to her blog readers who suffer from this condition.

The advertiser is subject to liability for misleading or unsubstantiated representations made through the bloggers endorsements. The blogger also is subject to liability for misleading or unsubstantiated representations made in the course of her endorsement. The blogger is also liable if she fails to disclose clearly and conspicuously that she is being paid for her services.

The next time you receive a “tweet” that looks, smells and tastes like an endorsement, it probably is. And if so, that endorser should take notice of the FTC’s laws regulating advertising and endorsements.

For more information about the Guidelines, visit the FTC’s website.

UDRP Panelist Slams Complainant With Charge Of Reverse Domain Name Hijacking: Might This Decision Reverse A Longstanding Trend Of Pro-Trademark Owner Panelists and Decisions?

2010-08-28T07:28:00.000-07:00

A recent Uniform Domain Name Dispute Resolution Policy (“UDRP”) decision may be seen as a ray of hope for Domainers with respect to reversing a longstanding trend of pro-trademark leaning panelists and decisions. In the case of M. Corentin Benoit Thiercelin v. CyberDeal, Inc. (decided August 10, 2010), single panelist Tony Willoughby pulled out paragraph 15(e) of the UDRP regulations and reprimanded the complainant for abusing UDRP proceedings and for an attempt to reverse hijack the subject domain name.

Complaint, M. Corentin Benoit Thiercelin, runs a company named VirtualExpo, which was registered in 2000. Complainant did not secure trademark registration until 2005. Complainant claimed that CyberDeal, Inc. had registered - and was using - the domain name in bad faith to prevent Complainant from acquiring the domain name for itself. Interestingly, CyberDeal had registered the domain name in 1996, at least four years before Complainant had acquired any alleged rights in the name VirtualExpo and nearly ten years before Complainant secured trademark registration.

Per the decision, prior to the filing of the UDRP proceeding, Complainant’s attorney sent CyberDeal a cease and desist letter alleging that CyberDeal was using the subject domain name in connection with a web site that was “causing commercial as well as image damages for which my client will seek damages.” Interestingly, however, there was no evidence placed in the UDRP proceeding record to suggest that the domain name had ever been put to any use.

The panelist considered whether (1) the subject domain name and Complaint’s mark were confusingly similar, (2) the defendant had any legitimate interests in the subject domain name and (3) the subject domain name was registered in bad faith.

The panelist found that the mark VirualExpo and domain name are confusingly similar. The panelist elected to skip prong two of the test and move directly to the issue of whether the subject domain name was registered in bad faith.

The panelist first considered the issue of whether a domain name can be registered in bad faith before trademark rights are acquired by a third party. Although bad faith will not generally be found when a subject domain name was registered before acquired trademark rights, there are those cases where bad faith may be found. For example, in those instances where a domain name holder had inside knowledge of a trademark owner’s plan to use a certain trademark.

In this case, Complainant's earliest alleged trademark rights began in 2000, or four years after the registration of the subject domain name. Based upon the record of this case, the panelist stated, “On the papers before the Panel this was a wild, unsupported and wholly misconceived claim.” The panelist continued on to state the following:

“In the view of the Panel this is a Complaint which should never have been launched. The Complainant knew that the Domain Name was registered nearly 10 years before the Complainant acquired his registered rights, no attempt was made to demonstrate the existence of any earlier rights nor was any attempt made to address the issue arising from the disparity in dates. It simply was not mentioned. Instead, a flagrantly insupportable claim was made as to the Respondent’s bad faith intent at time of registration of the Domain Name and the Panel can only assume that it was hoped that the Panel would miss the point.”

Reverse domain name hijacking occurs when trademark owners secure domain names by making false cybersquatting claims against rightful owners of domain names. In those closer cases that result in transfers of domain names to complainants, but still constitute reverse domain name hijacking, places trademark owners in jeopardy of being sued in federal court for reverse domain name hijacking. Although there are no statutory damages for reverse domain name hijacking, the idea of defending a federal court action – not to mention receiving a “black eye” - should cause trademark owners to pause and seriously consider whether to bring arguably baseless UDRP claims.

Could this decision be a turning point for reversing a longstanding trend of pro-trademark leaning panelists and decisions or simply nothing more than a decision regarding clear abuse of the UDRP process?

Should federal trademark law be amended to provide statutory damages for victims of reverse domain name hijacking? What about “attempted” hijacking? I think it should.

What should the standard and statutory damages be? What do you think?

Brand Name Selection Runs Afoul with U.S. Trademark Trial and Appeal Board: Board Finds Trademarks BECKER FURNITURE WORLD and STUDIOBECKER Confusingly Similar

2010-08-21T11:44:00.000-07:00

A recent decision at the U.S. Trademark Trial and Appeal Board (the “Board”) once again highlights the importance of proper brand name selection and clearance.

In the case of In re Conleasco, Inc. (TTAB July 7, 2010), the Applicant sought registration for the trademark BECKER FURNITURE WORLD for “retail store services in the field of furniture, home furnishings, rugs, window treatments, gas fireplaces, paint, flooring, sinks, bathtubs, showers, and toilets.” Registration of that mark was refused by examining attorney Christopher Buongiorno on the ground it so resembles the registered mark STUDIOBECKER for “kitchen, living room, bathroom, dining room and bedroom furniture; wall components, namely, shelving and furniture, kitchen, bathroom and medicine cabinets, sold separately or as a unit; and room dividing furniture made of wood, metal, synthetic or laminate materials” as to be likely to cause consumer confusion or consumer deception as the to the source of the parties’ respective goods and services.

What? Why would the mark Becker Furniture World for retail store services and the mark StudioBecker for furniture likely cause consumer confusion or deception!? Read on and find out.

Important to note that the application for the mark BECKER FURNITURE WORLD was based upon an intent-to-use the mark in commerce. Meaning that Applicant claimed in its application that its mark was not yet being used in commerce as of the application filing date -- or as of May 29, 2008. The cited registration issued well before then on January 16, 2001. As of the May 29, 2008 application filing date, Applicant was clearly on constructive notice as to the registration of the mark STUDIOBECKER for certain furniture products. A properly conducted trademark search would have found that registration. And an availability opinion should have raised a red flag.

In upholding the examining attorney’s refusal, the Board considered the following main factors:

Similarity of the Parties’ Respective Goods and Services and Channels of Trade

The Board first noted that it’s not necessary that the parties’ respective goods and/or services be identical or even competitive in order to support a finding of likelihood of consumer confusion. That’s so because it’s sufficient that the goods and/or services are related in some manner, or that the circumstances surrounding their marketing are such that they would be likely to be encountered by the same persons in situations that would give rise, because of the marks being used, to a mistaken belief that they originate from or are in some way associated with the same source, or that there’s an association or connection between the sources of the parties’ respective goods and/or services. The Board correctly noted that because the subject application and registration don’t contain any limitations as to the channels of trade in which the goods and services travel that it’s presumed that they travel in all channels of trade which are normal for those goods and services and they would be available to all potential buyers in those channels of trade. The Board also pointed out that it’s well settled that consumer confusion is likely to result from the use of the same or similar trademark for goods, on the one hand, and for services involving those goods, on the other hand.

Under the facts of this case, the Board found that retail store services featuring furnishing and home furnishings may involve the sale of the registrant’s living room, dining room and bedroom furniture. Thus, the Board found that the parties’ respective goods and services are sufficiently related and that consumer confusion is likely should those goods and services be offered under the same or similar trademark(s).

Marks

The Board turned next to the issue of whether the marks BECKER FURNITURE WORLD and STUDIOBECKER are similar or dissimilar in terms of sound, appearance, connotation and commercial impression. Although the Board must compare the parties’ respective marks in their entireties when determining the issue of likelihood of confusion, it’s well settled that the Board or court may give more weight to a dominant portion of a mark when considering a mark’s overall commercial impression. Furthermore, the test is not whether the marks can be distinguished when subjected to a side-by-side comparison, but rather whether the marks are sufficiently similar in terms of their overall commercial impression such that confusion as the source of the goods and services is likely. Applying those principles, the Board found that the dominant portion in each mark was BECKER.

The Board found that the marks are similar in terms of connotation, since the terms FURNITURE WORLD and STUDIO only lend slightly different meanings to the marks, since they would only be seen as modifiers of the dominant term BECKER. In terms of overall commercial impression, the Board found that the marks are similar in that they both convey BECKER as the source of the parties’ respective goods and services. Comparing the marks in terms of overall appearance and sound, the Board quickly disposed that issue by finding that the marks are more similar than dissimilar due to the use of the term BECKER in both marks.

The Board concluded by stating that although one mark includes the wording FURNITIRE WORLD and the other STUDIO, consumers familiar with registrant’s living room, dining room and bedroom furniture identified under the mark STUDIOBECKER are likely, upon encountering applicant’s retail sale services in the field of furniture and home furnishings identified by the mark BECKER FURNITURE WORLD, to mistakenly believe that applicant’s retail store services in the field of furniture are related in some manner to registrant’s individual furniture items.

Accordingly, the Board upheld the examining attorney’s refusal to register on the ground of likelihood of confusion.

What have we learned from the Board’s decision? We learned that when clearing and selecting trademarks, we must consider, at a minimum, the following trademark principles:

1. Overall similarity of the marks? We don’t only check to see whether there are identical third party trademarks. We must search for “confusingly similar” trademarks. Trademark attorneys should carry out availability searches, not the assistant to the assistant secretary. Please remember this principle: “There are attorneys that say they do trademarks. Then there are trademark attorneys.” Please seek out the latter.

2. Relatedness of goods/services? The goods and/or services only need to be related for there to be a finding of likelihood of confusion. As long as consumers would reasonably believe that the parties’ respective goods and/or services are of the type that may originate from the same source – that’s all we need to raise the “relatedness red flag.” Period.

3. Channels of trade and class of buyers? When considering whether a selected mark is available, one must consider the channels of trade and the class of buyers. Most examining attorneys forget these important points.

4. As we'll see in an upcoming post, strategic trademark application drafting may be warranted. Applicants must know what landmines potentially exist and, if ethically available, be sure to draft trademark applications that don’t raise “examining attorney” red flags. Once a red flag goes up, good luck convincing some examiners to take it down, even if the red flag is not warranted.

Stay tuned for my next post when I discuss the Board’s recent decision refusing registration of a mark for clothing due to a registered mark for oyster bar services. What?!

The Importance of Proper Global Brand Name Selection Rears Its Ugly Head...Again

2010-08-15T07:45:00.000-07:00

Creating brilliant and legally available brand names is becoming increasingly more difficult as thousands of new brands are launched globally every month. Selecting brand names is also generally not as easy as many brand managers think. Some give little, if any, real consideration to the brand name itself as if it were an irrelevant part of the branding process that’s best left for late Friday afternoon. History tells us that in some instances it’s not the best mousetrap that wins the race to the top position in consumers’ minds but rather the brand, which starts with what? That’s right, the brand name itself.

We know there are brand managers that wait until the eleventh hour to consider brand names for product launches. Or at least they wait until the eleventh hour before giving the brand name considerable thought and consideration. Fundamentally, that's not the best approach for creating and building a successful brand, especially if the brand is going global. I have blogged about global trademark protection and brand name selection considerations (here) and how improper brand name selection can kill a brand (here).

This morning I came across The Montana iP Trademark Blog, which I immensely enjoyed perusing. There is a particular post on The Montana iP Trademark Blog that prompted my writing this post this morning. (Thank you Paul for unlocking my writer’s block! And for giving me something fun to write about!) That post thoroughly highlights the importance of global brand name selection. (Read here)

I think that the below packaging image says it all and makes my, as well as The Montana iP Trademark Blog’s, point dreadfully clear.

Houston, we have a problem.

Ten Reasons Why Brand Owners Should Care About Their Trademarks and Federal Trademark Registration

2010-08-01T06:40:00.000-07:00

1. Improper Trademark Selection Can Kill A Brand

Not all selected trademarks are created equal. Valuable trademarks distinguish competitors’ products, while trademarks that don’t distinguish competitors’ products are not valuable. Nokia and Motorola are good examples of trademarks that distinguish the source of their associated products. There is no issue of whether consumers would be confused as to the source of Nokia and Motorola products. However, what about the trademarks Whoville Eye Specialists and Eye Specialists of Whoville? Might consumers become confused as to the source of the services offered under those trademarks? What if Whoville Eye Specialists develops a reputation for blinding patients during routine eye laser surgery? Do you think that reputation would affect Eye Specialists of Whoville’s brand? Of course it would. The likely result would be loss of patients, loss of potential patients and loss of revenues.

2. Trademarks Are Used To Avoid Products With Bad Reputations And Seek Out Those With Good Reputations

Consumers use trademarks to avoid companies with bad reputations and seek out those with good reputations. Under my Whoville example, consumers are likely to mistakenly believe that Eye Specialists of Whoville and Whoville Eye Specialists are either one of the same or somehow associated or affiliated. Either way, both companies’ brands become irrevocably damaged. And that’s unfortunate for Eye Specialists of Whoville who now must either change its name or spend tens of thousands of dollars in a public relations marketing campaign. Do think it might be difficult for Eye Specialists of Whoville to develop brand loyalty with consumers in light of Whoville Eye Specialists’ reputation?

3. Trademarks are Used to Identify Quality

Once consumers become familiar - and satisfied - with a particular product’s quality and price, consumers will continue to seek out that product time and time again. If a product’s quality is inconsistent, however, consumers will inevitably abandon that product in favor of another. Companies that deliver their products or services at inconsistent levels of quality risk severe damage to their brands. Those that offer their products at a consistent level of quality - and at a fair price – can build strong brands and brand loyalty.

4. Brand Loyalty

Companies that offer their products at consistent levels of quality and at fair prices can create brand loyalty. The result of creating brand loyalty is repeat business, which is what all companies’ desire. Why do some companies get repeat business while others do not? McDonalds® has been very successful at creating brand loyalty, thus repeat business. But how has McDonalds accomplished that? By offering its products at consistent levels of quality and at fair prices. Consumers know what to expect when they purchase Big Mac® sandwiches in Seattle and Boston. The Big Mac should cost and taste the same in both locations. However, if the cost, and more importantly the taste, of Big Mac sandwiches were different from city to city and location to location, consumers would not be as loyal to the McDonalds brand as they are today. And that holds true for any product.

5. Brand Successes and Goodwill

Brand loyalty and brand success go hand-in-hand. Strong brand loyalty eventually generates a high level of goodwill for companies and their brands. Goodwill is described as including a company’s reputation in the marketplace. It is inevitably trademarks that will protect the goodwill, reputations and brand images generated by businesses. Do you think companies want trademarks that have little “value” to be "protectors" of their goodwill and reputations? Of course not. So why do many companies ignore the importance of trademark selection? Ignorance, time or money? All three? Whatever the reason, to ignore the importance of selecting “valuable” trademarks can be the difference between product and brand success and failure.

6. Trademarks and Their Goodwill Can Increase Sales Margins

As product goodwill increases, its associated trademark becomes more valuable. As consumers begin to rely upon a product’s associated trademark as indications of source and high quality, resulting consumer loyalty may allow for higher pricing, thus higher profit margins.

7. Trademarks are Used as Decision-Making Tools

Trademarks reduce time, cost and effort in the decision-making process by allowing consumers to quickly select products based upon past experiences. Trademarks can convey emotional attributes to consumers that help with the decision-making process. A company’s trademark may convey a certain level of quality or image as well as other messages – such as a lifestyle, aspirations and desires. Trademark owners should consider what attributes consumers desire from their products when selecting new product names. Then select a name that starts the positioning process and drives the brand.

8. Avoiding Potential Global Implications: Does the Mark Have Language Barrier Issues?

There have been many stories – some of which may be nothing more than folklore but are nonetheless fun to talk about - of companies launching new brand names to later learn – much to their chagrin - that they convey negative connotations in other languages and cultures. Take, for example, the well-known story of the Chevy Nova. As the story goes, the term NOVA in Spanish means, “won’t go.” Probably not the best name for a vehicle would you say? As the story continues, maybe it was the name itself that explains why the Nova didn’t do so hot in the Spanish speaking markets.

Companies must also know whether new brand names would have distasteful connotations in other languages and cultures. Another example is the story of PepsiCo launching the slogan “Come Alive with the Pepsi Generation” in China. The story goes that the meaning of the slogan was terribly lost in Chinese translation. Chinese speaking folks translated the slogan to: “Pepsi Brings Your Ancestors Back from the Grave.”

Houston, we have a problem.

9. Trademarks Can Be A Company’s Most Valuable Assets

Trademarks may potentially be a company’s most valuable assets. Trademarks have the potential to increase in value over time. Trademarks can be used as collateral to secure business loans, which can be used for business expansion. Trademarks can also be licensed to third parties to designate new product offerings, which can increase revenues. At last count, the Coca-Cola trademark was estimated to have a value of 70 billion dollars – which is more than all of the company’s tangible assets.

10. Federal Trademark Applications and Registrations Preserve Valuable Rights

While registration is not required to create trademark rights in the United States (and in certain other countries), securing federal trademark protection is a best practice and carries with it certain valuable rights, presumptions, and remedies for trademark infringement. Even if a mark has not yet been put to use, a federal trademark application may still be filed on an “intent to use” basis, thereby potentially reserving rights in that mark for your company. That holds true even if a competitor were to begin use of the same or confusingly similar mark after the filing of your application but before your company’s use of the mark.

Planning ahead and properly clearing marks and filing “intent-to-use” federal trademark applications at least four months in advance of product launches is a recommended strategy for securing rights in marks before their actual use. That strategy may also avoid the all too common last minute scrambling to find available names. You know, that last-minute Friday afternoon exercise of “the product launches on Monday and we really really really need you to approve this name, Roger!” Yeah, that one.

There are other reasons why companies should care about their trademarks. Simply understanding and appreciating the basic values of trademarks and how they can drive a brand are the best reasons of all and a good place to start.

If you’re interested in reading other related posts, consider reading: Ten Essential Rules for Internet Brand Names and Why “TMing It” Advice by Seth Godin Misses the “Mark”

Trademark Titan Blog and TheFlyPod.Com Sit Down Again to Discuss the Intricacies of Intellectual Property Law

2010-07-11T04:35:00.000-07:00

Last week I had another opportunity to sit down with Gary Puckett – one of the pioneers of podcasting and founder of Fly Paper Productions, LLC - to discuss some of the intricacies between certain categories of intellectual property (e.g., patents, trademarks, copyrights and trade secrets). We also briefly discussed some of the hot issues impacting the worlds of patents, trademarks and copyrights.

I would like to invite you to listen in on our latest conversation.

I would also like to thank Gary for a second opportunity to be a part of TheFlyPod.com podcasts and American Legal podcast series. I encourage you to browse TheFlyPod.com program catalog and download those programs of interest to you and to periodically visit TheFlyPod.com site for new and exciting programs.

Any comments? Please let me know.

Three Easy Steps for Creating a Brand Name Powerhouse Using a “Family of Marks”

2010-07-03T06:46:00.000-07:00

Trademark owners that use a number of marks that share a common prefix or suffix have an opportunity to establish what is known as a “family of marks.” For example, a brand owner that uses six different marks that share the prefix “SENSE” (i.e., SenseGloss, SensePlus, SenseRight, SenseDraft, SenseAll and SenseView) for a line of product may establish a legally recognized family of marks. Once established, a family of marks bestows upon its owner a power much greater than the sum of the individual members of that family.

The fundamental benefit of raising a family of marks is that, once legally recognized, the trademark owner may successfully enforce its family of marks against competitors’ marks incorporating the common “family term” (i.e., Sense). In effect, the common term appearing in each of the family member marks becomes recognized by customers as an identifying trademark – and a particular source indicator -- in and of itself (i.e., Sense) when it appears in any composite mark.

Even though a junior user’s mark may not be that close to any one member of the family of marks, i.e., ExtremeSense, its use of the distinguishing family term “Sense” may cause a likelihood of consumer confusion. Its use may cause confusion because if purchasers have come to associate marks that incorporate the term “Sense” with a single source for a particular product, consumers may reasonably believe that the competitor’s mark ExtremeSense is a new addition to the “Sense” family – thus causing consumer confusion and deception as to the source of the ExtremeSense products.

Although some brand owners believe they own a legally protectable “family of marks,” the truth is that they have not taken the proper steps required under trademark law to establish a family of marks.

Below is a list of key requirements for establishing a legally recognized family of marks under U.S. law:

1. Joint adverting: Advertising that uses the marks in a manner that associates each of the marks as belonging to the same owner.

2. Promoting the marks as a “family” so as to create an association between the marks in the minds of consumers.

3. Use of the family of marks in everyday sales activities.

The key to creating a legally recognized family of marks is to create common exposure of the marks and recognition of common ownership based upon the common term appearing in each mark.

Simply using a series of marks that share a common term does not establish the existence of a legally protectable family of marks. There must be recognition among the purchasing public that the common term or characteristic is associated with the same source.

Five Pet Peeves of U.S. Patent and Trademark Office Examining Attorneys About Private Practitioners

2010-06-22T13:30:00.000-07:00

Thanks to those that have inquired into my next post. Yes, I know its been a bit more than a week since my last post, but work has been busy and yes - I'm a weekly blogger. For the sake of time this week, I thought I would have a bit of fun and write about something a little off beat. So I hope you enjoy.

Attorneys that spend a fair amount of their time practicing before the U.S. Trademark Office surely have their own pet peeves when it comes to many of the trademark examining attorneys at the Office. I certainly have mine. Having been a trademark examining attorney myself for a few years (1999-2001), I know that most – if not all – trademark examining attorneys also have their own pet peeves when it comes to attorneys that practice before the Office.

Today I reached out to some of my trademark examiner friends, some of which are former examiners and some that still work in the trenches at the Office, to discuss those pet peeves. Based upon today’s discussions, and my own recollection of examining, here are five trademark examining attorney pet peeves about attorneys that practice before the Office:

1. Practitioners that schedule interviews or call examiners to argue a case like it’s an oral argument before the Board. The worst part, they have nothing new to argue. When was the last time you had an examiner withdraw a substantive refusal (i.e., likelihood of confusion, descriptiveness) case after a phone call? (Although I just recently had nine final refusals withdrawn by three different examiners after phone calls – it’s still quite rare.)

2. Practitioners that pay for one international class for a six-class application. You know who you are. And I know who I am.

3. Practitioners who use the trademark examining attorney (like a summer associate) to research the TMEP for them while they wait on the phone.

4. Practitioners that don’t return phone calls. Ever.

5. Excuse me? Are you only clueless when it comes to trademark law and trademark examination procedure or are you always this thick? I think that says it all. But I’ll elaborate. Most trademark examining attorneys receive the occasional call from those private practitioners that haven’t got a clue. Note to patent attorneys: “Just because you practice patent law, does not necessarily mean you know trademark law.”

Ouch! Although I’d like to tell, I’ll leave that comment anonymous!

Next post: five pet peeves of private practitioners about trademark examiners.

Can any of you take a guess what those might be? Or would you like to share yours?

A Step Closer To Outlawing Google’s Assault on Brand Owners’ Rights? Court Concludes That Google Can Be Liable Under Anticybersquatting Protection Act As A Domainer’s Authorized Licensee

2010-06-13T06:41:00.000-07:00

A recent decision in the case of Vulcan Golf, LLC et al v. Google Inc., 1:07-cv-03371 (N.D. Ill. June 9, 2010), out of the U.S. District Court for the Northern District of Illinois, Eastern Division, caught my attention yesterday. The plaintiffs in that case have sued Google (as well as other defendants, all of which have agreed to settlement terms) alleging that it engages in a scheme whereby it receives billion of dollars in ill-gotten advertising revenues by knowingly and intentionally registering, licensing and monetizing deceptive domain names at the expense of trademark owners.

The plaintiffs target Google’s AdSense for domains (“AFD”) program. Google’s AFD program allows domain name owners that have yet to develop their sites to display search engine search results and tailored advertisements, known as “sponsored links.” The AFD program is designed to replace error messages or “under construction” statements that historically would appear prior to a website’s launch. Once domain name owners become AFD partners with Google, Google populates their websites with search engine search result content and sponsored advertisements. If users click on advertisements (e.g., Sponsored Links), the advertisers are billed a few cents of which Google and its AFD partners share.

Plaintiffs contend that certain individuals and companies – most of which are Domainers – intentionally register or license domain names that are confusingly similar to trademarks owned by third parties. Plaintiffs further contend that when users land on those websites in error they are presented with search results and advertisements of competing products and services. More importantly, should users click on displayed advertisements on those web sites, they are redirected to competitors’ web sites, which may result in lost would-be customers and lost revenues to trademark owners.

In the instant case, Plaintiff Vulcan Golf contends that defendant registered the domain name wwwvulcangolf.com (without a period after “www”) for the purpose of misdirecting Vulcan’s would-be customers from a “deceptive” web page to competitors’ sites via sponsored advertisement links, while sharing advertising revenues with Google for doing so. Accordingly, the plaintiffs’ allege that Google and AFD partners profit from the misuse of the plaintiffs’ trademarks.

The pertinent law at issue in this case is the Anticybersquatting Protection Act, Lanham Act section 43(d). The relevant portion that that Act states as follows:

1(A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected under this section, if, without regard to the goods for services of the parties, that person:

(ii) registers, traffics in, or uses a domain name that:

(I) in the case of a mark that is distinctive at the time of registration of that domain name, is identical or confusingly similar to that mark;

(II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or

(III) is a trademark, word, or name protected by reason of section 706 of Title 18 or section 220506 of Title 36.

(1)(D) A person shall be liable for using a domain name under subparagraph (A) only if that person is the domain name registration or that registrant’s authorized licensee.

(1)(E) As used in this paragraph, the term “traffics in” refers to transactions that include, but are not limited to, sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer consideration or receipt in exchange for consideration.

The plaintiffs allege that the contracts between Google and its AFD partners render Google an authorized licensee for purposes of carrying out the AFD program - due to certain provisions of the AFD agreement that grant Google a license to “use the domains contained in the AFD” agreement. Although the Court found Plaintiffs’ evidence of record lacking to support that allegation, it still concluded that one of the agreements made of record may support Plaintiffs’ contention that Google would be deemed an authorized licensee as contemplated by the ACPA.

The Court also concluded that if the relevant AFD agreements included the licensee provision(s), Google may also be guilty of “trafficking” in the relevant domain names – as contemplated by the ACPA.

In sum, the Court concluded that Google could be liable under the ACPA as an authorized licensee of a domain name that infringes third party trademark rights and be liable for trafficking in domain names as contemplated by the ACPA if an AFD agreement expressly grants Google a license to use a subject domain name.

Why must the agreement expressly grant Google a license? Does that change the services carried out by Google under the AFD program? Of course not. Then why must the AFD agreement expressly state that a license is being offered!? What about an implied license? If there weren’t at least an implied license, wouldn’t Google be trespassing?

In any event, I like this Court’s decision, overall. In my opinion, Google abuses trademark owners’ rights, which must come to an end. Its sale of trademarks as keyword search terms, for example, provides competitors the ability to “free ride” on competitors’ trademarks/brands. I know that someday the courts – or it may even take an act of Congress – will finally get it right and outlaw Google’s business practices that - in my opinion – violate brand owners’ rights. When that happens – which I know it will – be sure to sell any Google stock before it hits $5 per share.

New Version of ICANN's gTLD Applicant Guidebook Upsets Domainer Community

2010-06-08T11:44:00.000-07:00

On May 31, 2010, Internet Corporation for Assigned Names and Numbers’ (“ICANN”) recently issued the 4th Edition of the generic top-level domain name (“gTLDs”) Applicant Guidebook, which has raised serious concerns within the Domainer community.

Specifically, ICANN has introduced a new subsection to Section 1.2.1 (Eligibility) that provides for additional grounds for disqualifying a gTLD applicant. That Section now reads, in parts, as follows:

Circumstances where ICANN may deny an otherwise qualified application include, but are not limited to, instances where the applicant, or any partner, officer, director, or manager, or any other person or entity owning (or beneficially owning) 15% or more of the applicant:

(iv) is the subject of a pattern of decisions indicating liability for, or repeated practice of bad faith in regard to domain name registrations, including:

(a) acquiring domain names primarily for the purpose of selling, renting or otherwise transferring the domain name registrations to the owner of a trademark or to a competitor…;

(b) registering domain names in order to prevent the owner of the trademark from reflecting the mark in a corresponding domain name;

(c) registering domain names for the purpose of disrupting the business of a competitor; or

(d) using domains with the intent to attract, for commercial gain, internet users to a web site or other online location, by way of creating likelihood of confusion with a trademark as to the source…

Domainers are wondering what’s a pattern of decisions? One case? Maybe three cases? Perhaps ten? And who will make that determination? Domainers are asking why business partnerships would assume risks of objection to a gTDL simply because a Domainer may own 15% or more of the applicant. Such objections would delay the issuance of gTLDs and would cost additional time and money - in excess of the already inflated application and registration price of $185k, not to mention to tens/hundreds of thousands more needed to launch a gTLD. Domainers are on edge because such a provision would likely have a chilling effect on Domainers’ participation in partnerships seeking gTLDs – even those Domainers with clean track records.

I recently posted the following comments on The Domains web site:

1. It would seem to me that a “pattern” must be supported with evidence of “clear” bad faith intent. In my opinion, a few “close” loses — that could have gone either way — should not result in disqualification. Take the recent Hayward case, for example. But maybe I’m just talking common sense, which seems to be a lost trait these days on this planet.

2. It’s not necessarily about choosing a domainer as a partner but rather choosing a domainer with a clear bad faith track record as a partner. Does any business want a partner with a track record of violating third party rights? One must then choose partners wisely. There must be a mechanism for brand owners to defend against those domainers that are clearly bad actors. Any better ideas out there?

I think I’m right. For those Domainers that are bad actors – they should not be entitled to own gTLDs (at least not as much as 15%).

The question: Where is that “bad actor” line drawn?

Any thoughts?

U.S. Trademark Applicant Involved in Collision With Giant Toy Manufacturer: CAFC Affirms TTAB Decision of No Trademark Abandonment After Eight Years of Non-Use

2010-05-31T07:49:00.000-07:00

I know the recently decided case of The Crash Test Dummy Movie, LLC v. Mattel, Inc. has been reported by other bloggers over the past couple of months. However, I just can’t shake it off as it’s made its way under my skin. Last week during the 2010 International Trademark Association conference in Boston, I discussed this case with other fellow bloggers and trademark attorneys. I needed to know whether I was in the minority of trademark attorneys – or one of the only trademark attorneys - who has lost sleep over this decision and believes that the courts simply got this decision wrong. Very wrong.

The question to ask in light of this decision is would you feel relatively comfortable adopting a trademark for certain products eight years after another company stopped using that same or essentially same trademark for similar products when after investigation there is not a trace – a single trace – of that other company’s use of that mark during the preceding seven plus years, except for expired federal trademark registrations?

Based upon the recently decided decision of The Crash Test Dummy Movie, LLC v. Mattel, Inc., brand owners better think twice about adopting marks or marks similar to marks that haven’t been in use for nearly a decade for similar products and, if they do select such names, be prepared for a potential head-on collision with a previous user.

The facts of this case appear fairly straightforward. Mattel acquired rights in the CRASH TEST DUMMIES and THE INCREDIBLE CRASH TEST DUMMIES in 1997 from Tyco Industries, Inc. Tyco ceased use of those marks in 1995 via licenses – or nearly three years prior. Mattel filed assignment documents with the U.S. Trademark Office in 1998.

Tyco apparently did not use the marks in 1996 or 1997. Mattel did not re-launch the subject marks in 1998, 1999, 2000, 2001, 2002 and, for the most part, 2003 (eight years after discontinuance by Tyco!) due to Mattel’s safety standards issues.

Generally, trademarks are abandoned when their owners cease use of them without the intent to resume their use in the future. Once a mark becomes abandoned, the previous user has no rights to the marks and cannot generally prevent others from adopting and using the abandoned marks. A prima facie case of trademark abandonment occurs when a mark has not been put to use for a period of three consecutive years. Prima facie abandonment may be rebutted, however, with evidence that that owner has not intended to abandon that mark due to plans to resume use of the mark in the future. The critical questions are what constitutes the “future” and at what point does or should a trademark owner forfeit its trademark rights for failure to act? Lets take a look at how the U.S. Trademark Trial and Appeal Board (the “Board”) and federal circuit answered those inquiries.

The Crash Test Dummy Movie, LLC filed an intent to use application for the mark CRASH DUMMIES for games and playthings in March 2003. Mattel opposed registration of the mark at the Board on the basis of priority of use and likelihood of consumer confusion.

The Board found a prima facie case of abandonment of the subject marks (e.g., non-use of the marks for at least three consecutive years). However, the Board also found that Mattel rebutted the presumption of abandonment by showing “reasonable grounds for suspension and plans to resume use in the reasonably foreseeable future when conditions requiring suspension abate.” Accordingly, the Board held in favor of Mattel.

I am hard-pressed to see how eight years of non-use is really considered reasonably foreseeable future. How about you?

The Crash Test Dummy Movie, LLC appealed the Board’s decision. On appeal, the Federal Circuit agreed with the Board finding no abandonment because – in the Court’s opinion - the facts of the case showed that Mattel had the intent to resume use and not to abandon the marks. Specifically, the Court found that (1) in 1998, Mattel entered into negotiations with KB Toys concerning KB Toys’ becoming the exclusive seller of CRASH TEST DUMMIES toys, (2) Mattel delayed use of the marks only because of the costs involved to redesign the toys due to safety standards concerns (Again, eight years? This is Mattel here. And the re-launched toys were not the same toys sold by Tyco!), (3) Mattel would not have recorded the trademark assignments with the U.S. Trademark Office if it did not intend to resume use of the marks (Really? How does the Court know that? Filing of assignments is a low-cost administerial task that is typically done after most deals.), (4) Mattel’s failure to renew the subject federal trademark registrations did not establish Mattel’s lack of intent to resume use of the subject marks (But its filing of the assignments with the Trademark Office did? If Mattel truly intended to resume use of the subject marks, why didn’t it file intent to use trademark applications to replace the expired registrations? Isn’t that what most companies would do it they intended to resume use of a mark? Wouldn’t Mattel want to place third parties on constructive notice of its intent to resume use the marks?) and (5) Mattel’s research and development efforts from 2000-2003 showed its intent to resume use of the mark (But what about the years of 1995-2000?!)

What could The Crash Test Dummy Movie, LLC have done? Run a full trademark search? Probably did. Even so, it would not have found any recent (i.e., past eight years!) use of Mattel’s marks. Would have found expired trademark registrations. At what point does a trademark owner’s inaction - i.e., not using its marks for over eight consecutive years, passively allowing its federal trademark registrations to expire (presumably without an attempt to renew them based upon excusable non-use) and not filing intent to use trademark applications (within a reasonable time from the dates on which the registrations expired) to place third parties on constructive notice of its intent to resume use of those marks - constitute outright forfeiture of rights against bona-fide third parties?

Any thoughts? I think you know mine.

Six Actions Brand Owners Can Take To Prepare For Potential Deluge Of New Generic Top Level Domain Names

2010-05-16T14:05:00.000-07:00

As brand owners await ICANN’s imminent launch of various new generic top-level domain names (“gTLDs”), of which I have discussed here and here, they should be reviewing and, if necessary, revising current domain name policies to meet anticipated new challenges. Below are six actions brand owners can take right now to ready themselves for the potential deluge of hundreds of new gTLDs.

1. Determine annual budget. How much funds are being allocated for reserving domain names that point towards active sites or redirect to active sites, may be used in the future and are pure defensive plays (those domain names reserved for the purpose of keeping them out of the hands of cyber squatters and Domainers)? Then plan accordingly.

2. Conduct periodic audit of domain name portfolio. An audit should determine which of your current domain names could be dropped due to little or no activity. If there’s little or no activity on certain sites, than those domain names would have little or no value to cyber squatters anyways. Consider letting those go.

Maintain those .COM – and possibly those .BIZ, .NET, .INFO and country code - domain names that correspond to common misspellings of brand names (consider new devices on market and what typos are being made), key brand names in key territories, generic product names (i.e., runningshoes.com for running shoe company) and potentially damaging sites such as yourtrademarkSUCKS.com. .COM domains are still the most coveted of gTLDs by Domainers and cyber squatters. I suspect that cyber squatters would prefer NIKEapparel.com to Nike.gardening or FORDvehicles.com to FORD.movies. Wouldn’t you agree?

Add new domain names that correspond to newly adopted gTLDs that are likely to result in misdirected Internet traffic and potential lost profits. For example, automakers should reserve domain names that correspond to .AUTO, .CARS and .TRUCKS gTLDs. However, I really can’t think of a reason why auto manufacturers would want to allocate funds to reserve domain names that correspond to unrelated gTLDs, such as Toyota.food and Ford.gardening? For most companies, those funds should be allocated to enforcement activities.

Also, as new brand names are launched, reserve priority domain names that correspond with those new names. For those brands that go to the graveyard, consider allowing those corresponding domain names to expire in due time.

3. Establish policing policy. In addition to compiling a healthy domain name portfolio, brand owners must also actively police third party registrations of potentially harmful domain names. A global watch program can cost thousands of dollars annually, so plan accordingly if such a service is desirable. Alternatively, brand owners can opt to conduct periodic in-house searches.

4. Establish consistent policy for enforcing brands. Create a policy for taking action against third parties that reserve potentially harmful domain names. The policy should be detailed. Determine in advance – outlined in policy – which “infringements” warrant action. When a credible threat is detected, take quick and decisive action. However, pick your battles.

5. Don’t overprotect. Brand owners simply cannot reserve all domain name permutations. It’s just too costly. That will become more evident as new gTLDs are launched. A better approach is to combine a healthy domain name portfolio with consistent monitoring and enforcement.

6. Take a deep breath and relax. For most brand owners, the launch of new gTLDs will likely go unnoticed. For those same brand owners, there will likely be bigger fish to fry.

Stay tuned as I'll be reporting from Boston May 22-26 at this year's International Trademark Association conference where we're expecting over 8,000 trademark attorneys from around the planet to gather to make new friends, business relationships and memories. New England, I'm coming home!

Domainers Indignant Over Comments Made By UDRP Panelist Regarding Domain Name Asking Price

2010-05-09T19:06:00.000-07:00

The recently decided UDRP case of Manufacturas Muñoz S.A. Colombia v. Choi Sungyeon has Domainers up in arms...again. Domainer outcry is - once again - over a panelist’s commentary on whether a respondent’s asking price for a subject domain name was excessively above “fair market value.” I recently reported on the start of this potential new trend (here) in the case of American Airlines, Inc. v. MegaWeb.com Inc. Although the panelist in the case of Manufacturas Muñoz denied transfer of the subject domain name to the complianant, he did make the following statement that has raised concerns in the domainer community: "While the Panel finds the amount at which Respondent is offering to sell the Disputed Domain Name somewhat suspicious and disconcerting...."

The issues: whether a domain name’s asking price should be considered at all in the determination of bad faith registration and use. And, if so, to what extent should asking price be weighed in that determination?

Domainers are hard-pressed to see how UDRP panelists are experienced domain name real estate appraisal experts. I doubt UDRP panelists have much experience whatsoever in assessing the value of domain names. And if I’m right, which I suspect I am, panelists will need to become certified experts in domain name valuations should a trend of “asking price” assessment be imminent. I think most – if not all – would agree that an “I know it when I see it” standard is simply not acceptable.

I’m pondering whether a domainer’s asking price has some place in the determination of bad faith registration and use in UDRP proceedings. I’m not advocating that an asking price, alone, could result in a finding of bad faith registration and use. However, I’m pondering whether asking price should play a role in those cases where the evidence strongly suggests bad faith and where evidence of an inflated asking price may be the missing link needed to “tip the scale” in favor of a complainant.

What are your thoughts?

Brand Name Suffers Heart Failure at U.S. Trademark Trial and Appeal Board

2010-05-02T15:46:00.000-07:00

The Trademark Trial and Appeal Board (the “Board”) has laid down the law again – this time against Cardiac Pacemakers, Inc. (the “Applicant”) on the issue of whether its selected trademark RYTHMIQ for a feature of an implantable heart pacemaker or implantable cardiac defibrillator that eliminates unnecessary ventricular pacing is legally protectable.

The issue on appeal was whether the applied-for mark, RYTHMIQ, describes a function, feature, characteristic, purpose or use of a feature of an implantable heart pacemaker or implantable cardiac defibrillator that eliminates unnecessary ventricular pacing.

As for the issue of whether the applied-for mark RYTHMIQ and term RHYTHMIC are legal equivalents for purposes of trademark descriptiveness, the Board noted – as it has many times before – that novel spellings of otherwise descriptive terms does not convert them into suggestive trademarks eligible for protection upon first use. For example, novel spellings of the term “cleaner,” including “kleener,” for cleaning preparations are not legally protectable. Based upon that well-settled trademark principle, and one that trademark attorneys worth their salt should know, the Board held that the terms RYTHMIQ and RHYTHMIC are legally equivalent for purposes of trademark descriptiveness.

In support of the examining attorney’s position that the term RYTHMIQ merely describes an aspect of Applicant’s goods, she submitted dictionary definitions for the terms rhythmic, rhythm, and pacemaker as well as articles that evidence use of the term “rhythmic” in connection with pacemakers and defibrillators. Those articles included the following excerpts:

A defibrillator is a medical device used to stop the heart in hope that [the] heart will start again with rhythmic contra[c]tions…. The electric shock is used to induce the heart to return [to] rhythmic contractions using its own natural pacemaker cells….

The pulse generator of the artificial pacemaker corrects for a defective sinus node or conduction pathway by emitting rhythmic electrical impulses similar to those of the sinus node. … Artificial pacemaker - corrects for a defective sinus node (see “sinus node” entry) or conduction pathway by emitting a series of rhythmic electrical discharges to control the heartbeat….

My review of the Internet found the following definitions for the terms “rhythmic” and “pacemaker”:

Rhythmic: Of, relating to, or having rhythm.

Pacemaker: an electrical device for stimulating or steadying the heartbeat or reestablishing the rhythm of an arrested heart called also pacer.

Sure looks like the purpose of electrical pacemakers is to create a “rhythmic” heartbeat or reestablish a heart’s “rhythm.” Am I missing something here?

Applicant still, however, ignored the evidence and pushed ahead anyway making some feeble arguments. In support of Applicant’s position that its mark is suggestive and not merely descriptive of its goods, it offered a declaration signed by its Marketing Manager - not one signed by users of its device! No, of course not! Do you think the Board found that self-serving!? That declaration included the following statement:

Applicant has developed a feature permitting the device to vary operating modalities in response to a patient’s conduction patterns to eliminate unnecessary ventricular pacing. This is the feature applicant intends to offer under the RYTHMIQ mark. This feature permits the physician to elect a form of pacing referred to as AAI pacing with VVI pacing as a backup.

Interestingly, it seems that “ventricular pacing” may also be referred to as “ventricular paced rhythm.” Also seems to me that the purpose of “pacing” is to provide or restore rhythmic pacing of the heart.

Applicant further argued that (i) the evidence of record failed to show that the term RYTHMIQ describes the feature of Applicant’s goods, which eliminates unnecessary ventricular pacing, (ii) its competitors don’t use the term RYTHMIQ, (iii) the term RYTHIMIC has other meanings in relation to other goods and (iv) intended consumers of Applicant’s goods would perceive the term RYTHMIQ as a trademark and not as a descriptor for its goods.

With respect to the first argument, the Board noted that to find a mark merely descriptive of certain goods it’s not necessary that it describe every aspect of the goods. The Board pointed to Applicant’s own declaration where it stated that “the feature of applicant’s goods…[is] to provide pacing pulses to the atrium of the heart with ventricular pacing as a backup as needed.” The Board then noted that the “purpose of such pacing is to provide or restore rhythmic pacing to the heart.” And that was that.

Moving onto Applicant’s next argument, the Board simply pushed it aside, since evidence that competitors don’t use an applied-for mark does not somehow render a non-distinctive term into a distinctive one.

The Board was not persuaded by Applicant’s argument that the term “rhythmic” has other meanings in relation to other goods, since the issue of descriptiveness is determined in relation to the goods or services at issue and not in the abstract.

Lastly, the Board wasn’t persuaded by the opinion of Applicant’s Marketing Manager regarding the perceptions of the intended consumers. Because there wasn’t any evidence of record evidencing intended customers’ perceptions as to the meaning of the applied-for mark, the Board found that the declarant’s statement had no probative value.

Based upon the evidence of record, the Board held that the term RYTHMIQ immediately describes, without conjecture or speculation, a significant characteristic or feature of Applicant’s goods – namely that they stimulate or reset a normal, rhythmic heartbeat. Accordingly, the Board affirmed the refusal to register the “mark.”

This is another case of a brand owner selecting a non-distinctive term as a “trademark.” Companies that offer brand name selection services – and attorneys that clear marks – should make clear to their clients of the risks associated with adopting non-distinctive terms as "marks.” They should also try to dissuade clients from adopting non-distinctive terms – even if clients want to push ahead.

For tips on brand name selection considerations, check out my posts on The Four D’s of Brand Name Selection and Ten Essential Rules for Internet Brand Names.

The Importance of Proper Brand Name Selection Rears Its Ugly Head...Again

2010-04-27T19:15:00.000-07:00

The recent United States Trademark Trial and Appeal Board decision of In re Wm. B. Coleman Co., Inc. highlights the absolute necessity for all brand owners to select distinctive and legally protectable company and brand names. Wm B. Coleman Co., Inc. found out the hard way that selecting a generic "trademark" does not – in the end – have any rewards.

The mark at issue was ELECTRIC CANDLE COMPANY for light bulbs; lighting fixtures; and lighting accessories, namely, candle sleeves. The issue in the case was whether the record showed that members of the relevant public would primarily use or understand the term sought to be registered as refering to the category of goods or services in question – which in this case were those goods listed above.

The two prong inquiry as to whether a term or terms are generic for certain goods or services is (1) what is the genus of goods or services at issue and (2) is the term sought to be registered understood by the relevant public primarily to refer the that genus of goods or services.

Based upon the evidence of record, the Board found that the genus of goods at issue is defined by the Applicant’s identification of goods, namely light bulbs; lighting fixtures; and lighting accessories, namely, candle sleeves. The Board further noted that the identification of goods encompasses products known as “electric candles.” The Board further noted that electric candles are a type of good sold by the Applicant, as evidenced by its web site: “This part is used to keep the electric candle from moving during shipment and may be discarded…Electric Candles are Safe and Convenient.”

Turning to the second inquiry, the public’s understanding of the term ELECTRIC CANDLE COMPANY, the Board found that the relevant public, when they consider ELECRIC CANDLE COMPANY in conjunction with the class of goods involved, would readily understand that term to identify a type of lighting fixture, namely an electric candle. The Board further held that the addition of the non-distinctive, generic term COMPANY to the generic term ELECTRIC CANDLE does not somehow mysteriously render the generic wording ELECTRIC CANDLE COMPANY into a distinctive and legally protectable “mark.”

Accordingly, the Board held that the Wm B. Coleman Co., Inc. did not own a legally protectable mark.

The Wm B. Coleman Co., Inc. started use of the “mark” ELECTRIC CANDLE COMPANY in 2002. Eight years later, it has nothing to show for it. And unfortunately, competitors themselves can likely freely use the term ELECTRIC CANDLE COMPANY without fear of infringement (assuming that Wm B. Coleman Co., Inc. doesn’t appeal the decision and prevail). And there’s really nothing the Wm B. Coleman Co., Inc. can do about it.

What do you think about a new competitor using the name "The Original Electric Candle Company”? Is that permissible? Why not?

Will Wm B. Coleman Co., Inc. start over and re-brand the company and products? I surely hope so.

Inconsistent UDRP Decisions Raise More Concerns Over Current UDRP Process

2010-04-23T03:21:00.000-07:00

Two recent UDRP cases involving the same Complainant and mark and essentially identical domain names (amerincanairways.com and americanairway.com) have yielded inconsistent decisions.

In the case of American Airlines, Inc. v. MegaWeb.com Inc. (reported here last week), the panel denied transfer of the domain name americanairways.com on the ground the subject domain name and Complainant’s trademark, American Airlines, are not confusingly similar. What made that case most interesting – and puzzling – is that the panel also concluded that the Respondent had no legitimate interest in the subject domain name and reserved the subject domain name in bad faith.

In my last post, I posed the following question: can domain names that aren’t confusingly similar to complainants’ trademarks be considered to have been registered in bad faith? No confusion equals no bad faith? Right?

It has come to my attention that there is also a companion case, which was decided only days earlier on March 29, 2010: American Airlines, Inc. v. Domain Admin a/k/a Taranga Services Pty Ltd. Interestingly, the panel in that case concluded that Complaint’s mark, American Airlines, and the subject domain name, americanairway.com, are confusingly similar. The panel also concluded that the Respondent had no legitimate interest in the subject domain name and had reserved the subject domain name in bad faith. Accordingly, the panel ordered transfer of the subject domain name to Complainant.

Two things bother me. The first is the inconsistencies within the decision of the americanairways case (issued on April 13, 2010). Again, how can we have no confusion and still have bad faith? As I pondered in my previous post, might the panel have been suggesting that the Complainant simply fell short on evidence needed to prove confusion? Was the record simply lacking? The second thing that troubles me is that two separate panels reached opposite decisions, just days apart, in two cases involving – what appear to be – the same trademark and essentially same facts and domain names.

How do we reconcile these two decisions? Should there be a requirement that panels handling companion cases discuss them before rendering decisions to ensure consistency? Is there a need to take a hard look at the current UDRP system?

Puzzling UDRP Decision Issued in American Airlines, Inc. v. MegaWeb.com Inc.

2010-04-17T12:27:00.000-07:00

The recent UDRP decision of American Airlines, Inc. v. MegaWeb.com Inc. has raised some eyebrows. And not because the domain name at issue was transferred or not transferred. It’s the decision itself that seems puzzling.

American Airlines sought transfer of the domain name americanairways.com from MegaWeb.com. Of course American Airlines argued all three prongs of the test, namely that (1) its mark American Airlines and the subject domain name americanairways are confusingly similar, (2) MegaWeb.com did not have a legitimate interest in the subject domain and (3) MegaWeb.com reserved the subject domain name in bad faith.

In defense of the allegations, MegaWeb.com argued – of course – that the mark American Airlines and the domain name americanairways are not confusingly similar. Specifically, MegaWeb.com argued that although the two names share the common term “AMERICAN” – the remaining portions of the names are sufficiently different (e.g., American airways is descriptive for a complete air transport system and there is a clear and distinct difference between airlines and airways) – thus the mark American Airlines is not identical or confusingly similar to the term american airways.

Based upon the evidence of record, the panel agreed with MegaWeb.com that the mark American Airlines and subject domain name americanairways are not confusingly similar. Under the UDRP process, a panel may decide to end its analysis should the complainant fail to prove prong one or two of the test and render its decision in favor of the respondent. In this case, however, the panel decided to provide analysis for prongs two and three of the test.

What’s puzzling is that although the panel decided that the complainants mark and subject domain name are not confusingly similar, the panel still concluded that MegaWeb.com had no legitimate interest in the subject domain name and had registered it in bad faith. Huh.

One of the factors relied upon by the panel in determining whether MegaWeb.com had a legitimate interest and registered the subject domain name in bad faith is that MegaWeb.com operates a pay-per-click website under the subject domain name that lists, and can direct Internet traffic to, competitors of the complainant. Based, in part, on that evidence, the panel concluded that MegaWeb.com didn’t have a legitamate interest in the domain name and had reserved it in bad faith.

Can there really be bad faith registration of a domain name that is not confusingly similar to a complanaint’s mark? If the domain is not confusingly similar to a complainant’s mark, how could there have been bad faith registration?

Might the panel have been saying that although it would like to have ordered transfer of the domain name it simply couldn’t because of complainant’s failure to prove prong one of the test - that complainant’s mark and subject domain name are confusingly similar?

What does this decision mean for future complainants, if anything? Doesn’t the decision really say that pay-per-click web sites are not legitimate services even when offered in connection with non-infringing domain names? Even so, would that change the outcome of any future decisions? I don’t think so.

Global Trademark Protection Considerations for Brand Owners

2010-04-08T06:08:00.000-07:00

Many factors come into play when launching global brands and brand names. Just ask those that do it for a living! As for the brand name itself, I’ve listed below some of the factors brand owners should consider well in advance of product launch. And, yes, I do mean well in advance of product launch. Do I need to say that one more time? I know that I do, but I won’t.

Below are eight aspects brand owners should bear in mind when planning a global brand name launch.

1. Does the name have language barrier issues? There have been many stories – some of which may be nothing more than folklore but are nonetheless fun to talk about - of companies launching new brand names to later learn – much to their chagrin - that they convey negative connotations in other languages and cultures. Take, for example, the well-known story of the Chevy Nova. As the story goes, the term NOVA in Spanish means, “won’t go.” Probably not the best name for a vehicle would you say? As the story continues, maybe it was the name itself that explains why the Nova didn’t do so hot in the Spanish speaking markets.

Companies must also know whether new brand names would have distasteful connotations in other languages and cultures. Another example is the story of PepsiCo launching the slogan “Come Alive with the Pepsi Generation” in China. The story goes that the meaning of the slogan was terribly lost in Chinese translation. Chinese speaking folks translated the slogan to: “Pepsi Brings Your Ancestors Back from the Grave.” Houston, we have a problem.

2. Consider adopting an international icon or logo. One great way of avoiding the language barrier issue is to adopt an international logo design. That way if the name has negative connotations in certain languages or cultures, the brand owner can either drop the name altogether or change the name but still use the universal design logo, which may become recognized across all languages and cultures. Think of the Good Humor® icon.

3. A term that is legally protectable in one country may not be protectable in another. A term or mark that is protectable in the U.S., for example, may not be protectable in the European Union or China. Although U.S. trademark law may render a mark suggestive, thus legally protectable upon first use in the U.S., EU or Chinese trademark laws may render the same term or mark as being non-distinctive, thus unprotectable. If there are any doubts as to a selected mark’s distinctiveness in a certain jurisdiction, an inquiry as to the mark’s distinctiveness should be made with foreign counsel. If it’s too late, and the mark has already been launched, one way to avoid the non-distinctiveness refusal in certain countries is to simply add a design element to the word mark.

4. Budget. Budget. Budget. Consider the costs of clearing and protecting selected marks in certain jurisdictions and countries. Although the cost to clear marks in all selected countries and jurisdictions may be cost prohibitive, it still makes sense to clear marks in those top priority countries/jurisdictions. Those “top” countries/jurisdictions are those that are expected to result in the majority of sales. Also, the costs to secure trademark registration protection on a global basis add up quickly. The best strategy is to know the marketing strategy and only seek protection in those jurisdictions that correspond with that strategy. If money is not an issue, and the brand owner fears competitors registering the name in certain countries where the mark will not be in use, then seeking defensive registrations may be part of the strategy.

5. Clearing and registering a mark in the U.S. does not mean the mark is clear to use in Canada, Mexico or any other country. Remember that trademark laws are country specific. A U.S. trademark registration does not generally grant the right to use the mark in any other country.

6. Does the brand owner want/need to reserve country code top-level domain (“ccTLD”) names? If a company wants to use ccTLDs (i.e., .CN for China or .JP for Japan), it should ensure that the domain names are available during the clearance stage and, if they are, reserve them immediately.

7. Where should trademark registration be sought? Deciding where to seek registration is an important aspect of the protection process. Due to cost barriers, companies should consider protecting marks in stages, which may mean over a certain number of years. Start with the top priority jurisdictions, including those jurisdictions where the majority of sales are expected to take place, customers are located, licensees are located, advertising is planned and manufacturing and distribution will take place. The lower priority countries are those of which sales are not expected to be of any significance for a few years. Protecting the name in the lower priority countries can simply be staged over coming years in an effort to spread out costs. Companies should be mindful of the brand expansion strategy, which could mean rolling out the product in certain countries over a 2, 3 or even 5 year period. It’s generally highly recommended that the trademark filings stay ahead of the product rollout strategy.

8. Trademark application filing strategy: National registrations, Community Trademark, International Registration? How about a combination of all three? There are a number of factors to consider when planning a filing strategy. Considerations should include national filings and their prosecution costs, vulnerability of home country applications or registrations on which International Applications are filed via the Madrid Protocol, the number of jurisdictions in which protection is sought, which countries or jurisdictions belong to the Madrid Protocol, first-to-file countries, distinctiveness of marks and potential for oppositions to registration in certain jurisdictions. There is not a “one plan fits all” strategy. Strategies should be considered on a case-by-case basis. Whether to use the Madrid Protocol and/or Community Trademark filing mechanisms or other jurisdictional filing mechanisms or a national application filing strategy or a combination of those options should be fully considered well in advance of product launch.

I cannot stress more that sufficient time should be allotted for planning a global filing strategy. In some instances, the time needed to clear marks for a global launch can take weeks and possibly months. And that’s if the first choice is available. So take some time out of your busy day of planning the branding strategy and give ample time to the planning of the brand name protection strategy – you will probably need it. Trust me.

Why "TMing It" Advice by Seth Godin Misses the "Mark"

2010-03-28T13:46:00.000-07:00

Seth Godin’s view on trademark law was recently brought to my attention by one of my Canadian trademark lawyer tweeps. After that, I came across two recent blog posts on this issue on the Likelihood of Confusion Blog and Duets Blog.

Seth Godin’s view on trademarks, as it pertains to seeking federal trademark protection, has already received much attention. Probably more than it’s worth. For that reason, I won’t spend too much time here, since I do have better things to do with my time than acknowledge - what I believe to be - complete rubbish.

Many brand owners understand that securing federal trademark protection (in some cases on a global basis) has many benefits and can be the prudent thing to do. Some are minimal benefits while others could potentially be the difference between product success and failure, not to mention business success.

Some time ago, Seth Godin posted the following comment on his blog:

Some lawyers will get all excited and encourage (demand!) that you register your trademark. This involves paying a bunch of money, filing a bunch of forms and earning an ® after your name instead of the ™. While the ® does give you some benefits by the time you get to court, it doesn't actually increase the value of your trademark. And you can wait. So, when you come up with a great name, just ™ it.

Just “TM it” he says. In some instances, that may very well be good advice. In other instances, however, that advice may kill a product and brand name. To provide such general advice is - in my opinion - careless and quite frankly simply naïve and dangerous. I must say that those that offer contrary views to the norm may stand to make money by doing so. If you watch the cable “talking heads” shows, you know what I mean.

In my opinion, below are four examples as to why the blanket advice of just “TM it” is simply bad advice.

1. Federal Trademark Registration May Allow For Geographic Expansion. Trademark rights in the U.S. (and some other countries) are geographic in nature. Meaning that trademark owners generally only secure trademark rights in those geographic regions in which marks are used (absent securing federal trademark protection).

Consider this: Company launches product and brand name in the North East on January 1, 2010. Company decides to accept Seth Godin’s advice of not seeking federal trademark protection and simply “TMing it.” As of the product launch date, there were no other similar marks on the market (or filed for at the U.S. Trademark Office) that would pose any barriers to the mark’s use. And that’s just great news! On January 1, 2012, Company decides to launch its product and brand name nationally. Unfortunately for Company, another company launched a confusingly similar trademark for a related product in March 2010 in California. That company has since expanded aggressively from Western United States through the Midwestern and Southern parts of the U.S. Since trademark rights are geographic, Company will likely be barred from expanding into those geographic regions in which the second company has commenced use of the confusingly similar mark.

Oops! So much for “TM it” advice. Had Company sought trademark protection by filing an application in January 2010 or beforehand and secured registration, Company would have had the legal right to stop the second company from using the brand name once Company moved into the other company’s markets. However, because Company relied upon “TMing it” advice, Company must now either change its name and start over or adopt a new name for those regions in which second company has secured common law trademark rights. That sounds costly. Also sounds like Company received bad advice with respect to protecting its intellectual property. You be the judge for Company. Was taking the “TMing it” advice worth it? Might that advice have killed the product and possibly the Company too?

2. The Power of Intent-To-Use Trademark Applications. The filing of a federal intent-to-use trademark application gives trademark owners priority of rights over subsequent users. Filing of intent-to-use trademark applications places subsequent users on constructive notice of the filer’s intent to use the mark.

Consider this: Company plans to launch a product and product name on January 1, 2010. In anticipation of launch, Company files an intent-to-use trademark application on September 1, 2009. On November 15, 2009, another company launches a competing product under a confusingly similar mark. On January 1, 2010, Company launches product. Company secures its registration on March 1, 2010. Company then learns of the other’s company’s use of the confusingly similar mark. Too bad for Company, however, because the other company started to use its mark first. Right? Wrong. Because Company filed its intent-to-use application BEFORE the other company began use, and because Company’s application matured into a registration, Company may take action against the other company and claim priority of rights. Why? Because Company filed an intent-to-use trademark application with a filing date (September 1, 2009) that pre-dated the other company’s date of first use (November 1, 2009). In sum: earlier filing date trumps later use.

Had Company listened to just “TM it” advice, it would have been the junior user, since it used the mark after the other company. If the other company brought suit against Company (the “junior user”) for trademark infringement, Company would likely be required to cease all use of the mark and re-brand its product.

Oops! Listenining to the “TM it” advice sounds dangerous. Doesn’t it?

3. Incontestability. Once a trademark has been federally registered for five years, a trademark owner may file an affidavit with the U.S. Patent and Trademark Office that states that the mark has been in continuous use for the products listed in the registration for the five years since registration. Once the affidavit has been filed, and accepted, the trademark registration becomes what is known as “incontestable.” An incontestable trademark registration cannot be challenged on certain grounds by third parties, including the trademark’s validity, registration and ownership. Although there may be certain limitations to an incontestable registration, such as priority issues, an incontestable registration is still an extremenly valuable aset to its owner. In an infringement action involving an incontestable trademark, the opposing party cannot argue that the incontestable trademark is invalid on certain grounds, including the mark is infringing or merely descriptive. However, an incontestable trademark and its registration may still be challenged on certain other grounds, such as abandonment, genericness and that the registration was obtained fraudulently.

Consider this: Company launches product and brand name in January 2010. Company takes the advice of simply “TMing it” and not seeking federal trademark registration. On January 1, 2016, Company learns of another company using a confusingly similar mark. Company sues. The other company defends the suit on the basis Company’s mark is merely descriptive, thus lacks distinctiveness. The Court agrees.

Note that “marks” that are considered to be merely descriptive of certain features or characteristics of the associated products are not considered source identifiers at adoption, and may never receive trademark protection status, since consumers would generally not perceive descriptive terms as trademarks. Question: If a term is merely descriptive of a feature of characteristic of a product (and it has not obtained secondary meaning) how can there be trademark infringement?

Oops! So much for Seth Godin’s advice to just “TM it.” Had Company secured registration, the defendant likely would not have been able to successfully defend the suit on the basis of non-distinctiveness. Company may have won the case.

How's that “TMing it” advice sounding to ya?

4. Valuation of a Business at Time of Sale. Ok, the owners of Company decide that after four years it’s time to sell Company and move onto the next venture. One of the questions a buyer would ultimately ask is “is the intellectual property protected?” Part of the purchase process is to conduct due diligence on Company. If the marks have not been protected and if patents have not been secured, the dollar value attached to the sale of Company may be lower than had Company protected its intellectual property.

Consider this: Due diligence uncovers another company’s trademark registrations for - what the buyers believe to be - confusingly similar marks. If Company is the senior user as against this registrant, and if the other company’s registrations have not become incontestable, Company – or the buyer – will likely have to bring a cancellation action against the third party registrant. Perfect. Litigation. Litigation costs! Either way, the purchase price has now likely declined due to uncertainty. How about if the third party’s registrations had become incontestable? Those registrations are protected from cancellation on the ground of likelihood of confusion. What’s the value of Company down to now?

Oops! So much for the “TMing it” advice…again.

Although there are instances when recommending federal trademark registration may not be appropriate, making a blanket statement that brand owners not consider federal trademark protection from or before brand name launch is – in my opinion – down right reckless. Even if Seth Godin is right about the future of intellectual property, we are currently living in the present, not future. In my opinion, companies should still play by today’s rules, not by those rules that may never apply.

What do you think?

Study Suggests That Trademark Owners Need Not Worry About New gTLDs

2010-03-19T16:23:00.000-07:00

A recent study released by Minds + Machines indicates that big brand owners need not worry about rampant cybersquatting should the Internet Corporation for Assigned Names and Numbers (“ICANN”) launch its program for new generic top level domain names (“gTLD”). I recently reported on ICANN’s plans to create new gTLDs here.

Minds + Machines' study reports that “Overall, the claims of brand owners that they will be forced to spend significant amounts of money performing defensive registrations in the proposed new gTLDs are not supported by the historical data, which shows that they largely do not undertake defensive registrations in new gTLDs, nor is there any extensive cybersquatting in new gTLDs.”

I cannot recall the last time that I had a client call or complain about a cybersquatter using its trademark or phonetically similar trademark with one of the more obscure gTLDs (i.e., .travel, .jobs). Why? My thoughts are that there is likely not any reason for the average consumer to visit most gTDLs. Would the average consumer think to type in www.xerox.travel when searching for Xerox’s web site? Of course not. If that's the case, then why would cybersquatters care to reserve domain names that don't generate web traffic and revenue?

Now it must be said that Minds + Machines is not a neutral party in this debate. Rather it stands to gain by the creation of a new gTLD system.

What do you think? Would ICANN’s creation of a new gTLD system cause the majority of trademark owners to defensively reserve useless domain names at exorbitant costs? Or would they tend to be selective in only those new gTLDs that become generally popular among businesses and Internet users?

To read Minds + Machines' full report, it can be accessed here.

Stay tuned for my next post about Seth Godin and his take on intellectual property. Really Seth, are you joking me?

Trademark Clearance: What Is It And Why It’s Not An Option In The Brand Name Process

2010-03-07T08:21:00.000-08:00

Once a new brand name or names have been selected for consideration for a new product (which I have written about here), the next step in the brand naming process is to ensure that the selected names are available for use and eligible for federal trademark registration. That step is known as “clearance.” The clearance step involves making sure that the selected names do not infringe third party trademark rights and are distinctive, thus immediately protectable upon first use.

Clearing marks before product launch is a necessary step and expense. Under U.S. law, courts may find that a trademark owner “willfully” infringed a third party’s trademark rights absent proper clearance. Willful trademark infringement may subject the infringer to statutory damages and plaintiff’s attorneys’ fees. Also, the expense of clearing marks is certainly less expensive than re-branding a product. Believe me, re-branding under these circumstances is not pretty. I’ve witnessed the process…more than once.

In addition to the reasons mentioned above, here are five other reasons to clear marks:

1. Determines likelihood of product expansion under same trademark. Properly conducted clearance searches should determine the likelihood of product expansion under selected trademarks. In other words, should a trademark owner decide to add complementary product offerings in the future, would the selected mark likely be available for those new offerings or would such use infringe third party rights?

2. Determines geographic regions in which selected trademark should not be used due to prior users of the same or confusingly similar marks. Trademark rights are geographic in nature. Meaning that trademark owners generally only secure trademark rights in those geographic regions in which marks are used (absent securing federal trademark protection). For example, if a clearance search discovered a user of a selected mark in Chicago (and that use was limited to the Chicago market only), the “newcomer” or “junior user” of that mark may launch a national product under the same or similar mark other than in the Chicago market. That holds true even if the “newcomer” secures a federal trademark registration. Use of the selected mark in the Chicago market by the “new comer” would subject the “new comer” to trademark infringement.

3. Determines whether selected trademarks are weak or strong. Clearance searches should determine whether selected marks are weak – meaning there are many other users of the same or similar marks or term(s) for similar products or the selected marks are descriptive or suggestive of the associated products. The “weaker” the selected mark, the narrower the scope of trademark rights and protection. Weak marks may limit future expansion within the trademark owner’s field of use and, in some instances, may not even be enforceable trademarks. How would you feel if your company spent tens – even hundreds - of thousands of dollars promoting a brand with a brand name that is not legally protectable and worse with a brand name that your competitors may freely use without infringement?

4. Determines whether selected marks have negative connotations in other languages and cultures. How would you like to launch a new product under a brand name that conveys a negative connation in a foreign language? There have been countless stories of brand name gaffs due to foreign translation and meaning. For example, one of the more well known branding blunder legends is that of the Chevrolet Nova. As the story goes, the word “no va” means “won’t go” in Spanish. And for that reason, Chevrolet apparently had difficulties, as one might expect, selling the Nova model in Latin America. True or not, the Nova legend amplifies the importance of clearance.

5. Determines whether corresponding domain name is available. One of the first tasks in the clearance process is to see if the selected trademark’s corresponding domain name is available. Or at least check to see what kind of web site is used with the corresponding domain name. During a conversation with a client several years ago about a trademark infringement matter, my client asked that I take a look at her company’s web site. I proceeded by entering my client’s name in the URL window and pressing “enter.” To my surprise, my client did not own the .com generic top-level domain name for its name. Instead, it was being used for a pornographic web site. I instinctly said to my client, “well I guess you don’t own the .com domain name!” She said: “No! We’re at .net.” How many other customers and would-be customers went to wrong site? Don’t let that happen to your company. Don’t be that company.

In addition to the reasons discussed above, there are other reasons to properly clear marks before use. Before launching that next brand, be sure to undertake all necessary steps in the brand name process. What you don’t know may hurt you.

My Conversation with Gary Puckett About Intellectual Property (Via Podcast)

2010-02-28T07:19:00.000-08:00

This past week I had an opportunity to sit down with Gary Puckett – one of the pioneers of podcasting and founder of Fly Paper Productions, LLC - to discuss some basics of intellectual property law (e.g., patents, trademarks, copyrights and trade secrets). We also briefly discussed some of the hot issues impacting the worlds of patents, trademarks and copyrights.

I would like to invite you to listen in on our conversation.

I would also like to thank Gary for the opportunity to be a part of TheFlyPod.com podcasts and American Legal podcast series. I encourage you to browse TheFlyPod.com program catalog and to periodically visit TheFlyPod.com site for new and exciting programs.

WebQuest.com, Inc. Appeals Recent UDRP Decision in Hayward Industries, Inc. v. WebQuest.com, Inc.

2010-02-21T10:24:00.000-08:00

As widely anticipated, WebQuest.com, Inc. has appealed the recent Uniform Domain Name Dispute Resolution Policy decision that would compel transfer of the domain names hayward.com and wwwhayward.com from WebQuest.com, Inc. to Hayward Industries, Inc.

This case presents interesting facts. This one is worth following. We'll have to wait and see if WebQuest.com follows through with the suit or if it's only still in the game for what it believes to be a profitable payout.

For more information about this case, you can read my post below, which includes links to other stories about this case.

Recent UDRP Decision Shakes Domainer Community: Hayward Industries, Inc. v. WebQuest.com, Inc.

2010-02-16T18:37:00.000-08:00

A recent Uniform Domain Name Resolution Policy (“UDRP”) decision has shaken, and possibly stirred, the domain name speculation community.

Domain name speculation is the practice of reserving or purchasing domain names for the purpose of later selling them for profit. Selling – or flipping – domain names are akin to what we saw in the real estate market several years ago. Those electronic “real estate” owners that speculate in domain names are known as “Domainers,” many of which have successfully built businesses around buying and selling domain names.

Domain name speculation should not be confused with cybersquatting. Domain name speculation is the practice of identifying generic or descriptive (not trademarks) domain names and utilizing them to develop web site traffic for purposes of generating revenue from what is known as “pay-per-click” advertising. Domain names may also be re-sold or “flipped” for profit. Much like real estate investment and speculation, Domainers evaluate electronic real estate and decide, based upon available information, what the “property” is worth. The goal: make a profit. No harm, no foul until Domainers use trademarks in domain names in violation of trademark owners’ rights.

Cybersquatters on the other hand reserve or purchase domain names that use someone’s trademark. A cybersquatter may also engage in what is known as “typo-squatting” by reserving domain names of commonly misspelled trademarks for the purpose of capturing misdirected Internet traffic when a user misspells a trademark (i.e., www.Walmrt.com). The definition of a cybersquatter is one that registers, traffics in, or uses a trademark of another in a domain name with bad faith intent to profit from the goodwill belonging to that trademark owner.

When cybersquatters misuse someone’s trademark in a domain name, trademark owners may take action by filing UDRP proceedings. Complainants in UDRP proceedings must establish the following three elements to successfully compel transfer of the disputed domain name(s):

1. The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;

2. The registrant does not have any rights or legitimate interests in the domain name; and

3. The registrant registered the domain name and is using it in "bad faith."

In the recent UDRP case of Hayward Industries, Inc. v. WebQuest.com, Inc., the panel ordered the disputed domain names hayward.com and wwwhayward.com to be transferred from WebQuest.com to the complainant, Hayward Industries, Inc. This decision appears to have shaken the Domainer community for two reasons: (1) a domain name corresponding to a geographic location was awarded to a company that uses the same name (i.e., San Diego, Inc.) and (2) the Panel considered the purchase price of one of the disputed domain names when considering whether that domain name was acquired in bad faith.

This case involves complainant Hayward Industries, Inc., a manufacturer and seller of swimming pool equipment and supplies. Hayward Industries claims to have used the trademark HAYWARD since 1956 and claimed ownership of certain global trademark registrations, including a U.S. registration for the mark HAYWARD.

The respondent, WebQuest.com, is in the business of providing pay-per-click search engines offered through domain names that correspond with geographic names. Pay-per-click is an Internet advertising model that generates revenue for their owners every time users click on ads listed on web pages.

The domain name hayward.com was registered in 1995 by Hayward & Associates, Inc. and later sold to WebQuest.com, Inc. for $20,000 in 2006. Thereafter, WebQuest.com attempted to sell that domain name at auction with a starting price of $100,000. Although not entirely clear, it appears from the decision that WebQuest.com reserved the domain name wwwhayward.com in 2004.

Hayward Industries’ alleged in its complaint that the disputed domain names are confusingly similar to its trademark “Hayward.” Hayward Industries also alleged that (i) WebQuest.com had set up typical minimalist web pages used by cybersquatters for the sole purpose of generating pay-per-click advertising revenues, (ii) the wwwhayward.com domain name had previously been used in connection with a web site that linked to Hayward Industries’ competitors’ and (iii) upon entering the term “hayward” in the provided search bar on the hayward.com web site, the user was inundated with sponsored links to web sites that provide access to Hayward Industries’ competitors’ products. Hayward Industries also alleged that WebQuest.com had not used the disputed domain names in connection with a bona fide offering of goods and/or services or for non-commercial fair use purposes without the intent of profiting from Hayward Industries’ trademark, and that consumer confusion had already occurred as evidenced by the linking to the disputed domain names by third party pool-related web sites.

In response to Hayward Industries’ complaint, WebQuest.com argued that it had a legitimate interest in the disputed domain names because the term “HAYWARD” corresponds to a geographic location and it already holds a large portfolio of geographic domain names. Thus, it has just as much right to the disputed domain names as does Hayward Industries. In other words, first-come, first-served. WebQuest.com also pointed out that the term “HAYWARD” not only refers to Hayward Industries’ but also refers to the city Hayward, California, a lake, a school and an airport. Furthermore, WebQuest.com argued that its pay-per-click sites constitute an offering of bona fide services, since they don’t pass WebQuest.com off as Hayward Industries.

WebQuest.com further argued that it didn’t acquire the disputed domain names in bad faith because it was not aware when it acquired the disputed domain names that a commercial entity could claim exclusive rights in a geographic term. It’s generally a well-known trademark principle that geographic terms may become trademarks once they acquire secondary meaning. Meaning that consumers have come to recognize a geographic term as a source identifier or trademark for certain products and/or services (i.e., Southwest Airlines, Vermont Teddy Bear Company). In my opinion, WebQuest.com likely lost credibility with the Panel with that argument.

After reviewing the facts of the case, the Panel determined the following.

Regarding the first prong of the test, the Panel concluded that the trademark at issue (HAYWARD) and domain names at issue (hayward.com and wwwhayward.com) are confusingly similar. Hayward passed the first leg of the test. That was the easy part.

On the issue of whether WebQuest.com had legitimate interests in the domains, the Panel quickly dismissed WebQuest.com’s claim that it acquired the disputed domain names to use them in connection with Hayward, California. The Panel acknowledged that the term “Hayward” is the name of a city, as argued by WebQuest.com, and domain names used in connection with pay-per-click search sites may qualify as a bona fide use under certain circumstances. The Panel concluded, however, that WebQuest.com used the disputed domain names in connection with sites that contained – or contained –web pages with links offering or leading to pages with links offering goods and services that are competitive with Hayward Industries’ goods and services. Such use clearly indicated to the Panel that the disputed domain names were not used solely for their fair use geographic meaning. While the Panel rightfully noted that WebQuest.com was not obligated to develop the disputed domain names, it also noted that WebQuest.com should not have parked them with pages that permitted it to wrongfully profit off the value of Hayward Industries’ trademarks. Accordingly, in the Panel’s opinion, WebQuest.com did not demonstrate that it had a legitimate interest in the disputed domain names.

Lastly, the Panel considered whether the domain names had been registered in bad faith. The Panel considered the bad faith factors and concluded that WebQuest.com had acquired the disputed domain names with the bad faith intent to attract Internet users to its web site for commercial gain by creating consumer confusion with Hayward Industries’ trademark. The Panel also considered the purchase price of $20,000 for the Hayward.com domain name. In the Panel’s opinion, $20,000 was excessive in light of the expected revenues generated by the disputed geographic domain names.

Based upon the Panel’s finding, it ordered the transfer of the domain names to Hayward Industries.

Domainers appear to be indignant over the Panel’s decision to transfer domain names that correspond to a geographic location, since, as Domainers argue, geographic domains should be available to anyone on the basis of fair use. They're also outraged because the Panel considered WebQuest.com’s purchase price of $20,000 for hayward.com.

Will panelists begin considering domain name acquisition costs when determining bad faith? Should they? Do Panelist even know how to value domain names?

Domainers should also be concerned with the Panel’s finding that use of pay-per-click search engine sites that generate search result links to a complainant’s competitors’ products may be sufficient evidence to find that Domainers don't have legitimate interest in disputed domain names. But isn't that what search engines do?

ICANN's Proposal For New Generic Top Level Domain Names: Should All Brand Owners Be Concerned?

2010-02-06T15:34:00.000-08:00

Over the past several years, the Internet Corporation for Assigned Names and Numbers ("ICANN"), the entity that oversees the Internet domain name system, has been aggressively pushing for the creation of new generic Top Level Domains (“gTLDs”). Currently, there are twenty-one gTLDs available, including those well-known extensions .com, .net, .org, .biz and .gov. In addition there are over 200 country-code top-level domains, such as .cn for China, .jp for Japan and .asia for the Asian region.

ICANN is now lobbying to potentially dramatically increase the number of gTLDs, which would allow for extensions 3-63 characters long. ICANN’s proposed plan would allow for the creation of gTLDs that may include brand names, such as www.goofy.disney, www.airline.usair, www.creditcards.visa and www.first.bank. The plan also calls for the registration of gTLDs for non-Latin scripts, including Chinese and Arabic.

The debate has heated up over ICANN’s proposal as brand owners voice their concerns over what they believe would become the new “wild wild west” for cyber squatters. Brand owners worry about the potentially exorbitant costs to enforce their trademark rights against those Internet pirates (a/k/a cyber squatters) that make a living reserving domain names that include other parties’ trademarks. They’re also concerned about the need to register “defensive” gTLDs to keep them out of the hands of squatters. The concern over the costs to reserve defensive registrations is clearly understandable given that the proposed cost to register gTLDs is $185,000USD each. Then an annual fee of $25,000 to maintain it! And those are not typos. $185,000 and $25,000 for a domain name!

Proponents of the plan argue that new gTLDs would enhance and improve the Internet by making available more domain name choices for companies, the implementation of new safeguards against Internet crime, such as reducing domain name squatting, phishing, spamming and other abuses, reducing domain name prices on the secondary market and reducing trademark confusion on the Internet, since different companies could use the same brand name with industry specific terms such as www.united.airline, www.united.investmentfunds and www.united.accountants.

Opponents of the new system argue that premature implementation of new gTLDs procedure without adopting proper safeguards causes serious concerns for brand owners, including increased cyber squatting and brand hijacking, increased consumer confusion and frustration, since consumers would not know where to find a company’s web site (i.e., www.unitedairlines.com, www.united.arlines, www.airlines.united?) and the need to spend hundreds of thousands of dollars on useless defensive domain name registrations. Opponents also argue that the new gTLDs system appears to be nothing more that a “money making scheme” that primarily benefits ICANN.

Proponents of the new gTLDs system argue that brand owners are over reacting to ICANN’s proposal and that, with respect to their concern over cyber squatters, there is a proposed Rapid Suspension System in place, which, when triggered, would immediately suspend an obviously infringing domain name thereby protecting the brand owner from continuing trademark infringement. However, what about those cases that are not so obvious?

In my opinion, the concerns raised by brand owners appear to be limited mostly to multi-national, well-known brands that would be most susceptible to domain name squatting issues. Small to medium-sized companies and many non-consumer products companies probably have little to worry about should ICANN’s proposed plan be implemented. All companies should, however, be keeping an eye on the process as it unfolds and, if implemented, be sure to monitor for misuses of their brand names in the new online “wild wild west.”

If you are interested in learning more about this topic, you may read more at the Goldstein Report here http://bit.ly/9wfbIm and by visiting ICANN’s web site here: http://bit.ly/4o73OE.

Why Improper Trademark Selection Can Kill A Brand

2010-01-30T08:48:00.000-08:00

Trademarks can be words, letters, shapes, colors, sounds, smells or any symbol or device used to identify the source of products or services. Most importantly, not all trademarks are created equal. Valuable trademarks distinguish competitors, while trademarks that don’t distinguish competitors are not valuable.

Nokia and Motorola are good examples of trademarks that distinguish the source of their associated products. There is no issue of whether consumers would be confused as to the source of Nokia and Motorola products. However, what about the trademarks Whoville Eye Specialists and Eye Specialists of Whoville? Might consumers become confused as to the source of the services offered under those trademarks? What if Whoville Eye Specialists develops a reputation for blinding patients during routine eye laser surgery? Do you think that reputation would affect Eye Specialists of Whoville’s brand? Of course it would. The likely result would be loss of patients, loss of potential patients and loss of revenues.

But why? Because consumers use trademarks to avoid companies with bad reputations and seek out those with good reputations. Under my Whoville example, consumers are likely to mistakenly believe that Eye Specialists of Whoville and Whoville Eye Specialists are either one of the same or somehow associated or affiliated. Either way, both companies’ brands become irrevocably damaged. And that’s unfortunate for Eye Specialists of Whoville who now must either change its name or spend tens of thousands of dollars in a public relations marketing campaign. Do think it might be difficult for Eye Specialists of Whoville to develop brand loyalty with consumers in light of Whoville Eye Specialists’ reputation?

Companies that offer their products at consistent levels of quality and at fair prices can create brand loyalty. The result of creating brand loyalty is repeat business, which is what all companies desire. Why do some companies get repeat business while others do not? McDonalds® has been very successful at creating brand loyalty, thus repeat business. But how has McDonalds accomplished that? By offering its products at consistent levels of quality and at fair prices. Consumers know what to expect when they purchase Big Mac® sandwiches in Seattle and Boston. The Big Mac should cost and taste the same in both locations. However, if the cost, and more importantly the taste, of Big Mac sandwiches were different from city to city and location to location, consumers would not be as loyal to the McDonalds brand as they are today. And that holds true for any product.

Brand loyalty and brand success go hand-in-hand. Strong brand loyalty eventually generates a high level of goodwill for companies and their brands. Goodwill is described as including a company’s reputation in the marketplace. It is inevitably trademarks that will protect the goodwill, reputations and brand images generated by businesses. Do you think companies want trademarks that have little “value” to be "protectors" of their goodwill and reputations? Of course not. So why do many companies ignore the importance of trademark selection? Ignorance, time or money? All three? What ever the reason, to ignore the importance of selecting “valuable” trademarks can be the difference between product and brand success and failure.

U.S Trademark Registration Process: Avoiding A Specimen Trap

2010-01-21T19:26:00.000-08:00

In a predictable case before the U.S. Trademark Trial and Appeal Board involving the mark DELI EXPRESS SAN LUIS, the Board held that Applicant’s applied-for mark was not a substantially exact representation of the mark as used on the packaging for the goods. Accordingly, the Board denied registration.

Applicant, E.A. Sween Company, sought registration of the mark “DELI EXPRESS SAN LUIS” (shown below) for burritos; snack cakes; and snack rolls, namely sweet rolls.

In the United States, trademark applications based upon use of a mark in commerce require the filing of a specimen of use (i.e., packaging for goods or advertising materials for services depicting the applied-for mark). The applied-for mark and mark appearing on the specimen of use must be substantially exact. Meaning consumers must perceive the applied-for mark as used on the specimen as having the same overall commercial impression.

The examining attorney handling the application argued that the applied-for mark as shown on the packaging depicts two separate trademarks; thus two different commercial impressions. Accordingly, the examining attorney refused registration of the mark. Applicant appealed that decision.

The question on appeal was whether consumers would perceive the applied-for mark as a unitary whole or as two separate marks. In support of its case on appeal, Applicant noted that it is the owner of two registrations, one for the mark DELI EXPRESS and one for SAN LUIS. Applicant then argued that its applied-for mark is a composite of its registered marks and that, pursuant to trademark rules and regulations, it is “free to choose the elements of its composite mark that it wants to register.”

In evaluating the use of the mark on the specimen, the Board noted that a portion of the applied-for mark consisting of DELI EXPRESS appears in the top left corner of the package in a red and yellow border. The Board further noted that a portion of the applied-for mark consisting of SAN LUIS appears to the right with a green background following a stylized yellow triangle.

The Board concluded that consumers would perceive the applied-for mark as two separate marks. The Board rendered its decision based upon the following factors:

1. The term DELI EXPRESS is not only in a different font but is contained within a yellow background, and then a larger red background, separated from the remainder of the packaging design by a black bar outlining the top left corner of the package.

2. The term SAN LUIS is outside of the DELI EXPRESS border and is further separated by a fanciful triangle and placed upon a green background.

Do you perceive the mark on the packaging as a single mark? I surely don’t. In my opinion, this appeal was DOA. Given the facts of this case, wouldn’t it have been a wiser decision to simply re-file the application with an acceptable specimen then take the savings and enjoy a relaxing vacation in San Luis?

Ten Essential Rules for Internet Brand Names

2010-01-18T16:21:00.000-08:00

Best of: Brand & IP Protection in the Age of Social Media

2010-01-16T12:16:00.000-08:00

The Internet is transforming the way in which companies communicate with customers. That transformation is accelerating at an astonishing pace as a result of social networking sites, such as Facebook®, Twitter® and MySpace®. More than ever consumers are sharing their experiences and opinions, good and bad, with global audiences on blogs, social networks and consumer review sites at the touch of a button. Those opinions have the potential for shaping, controlling and redefining advertising messages, not to mention companies' reputations. Most companies are still unaware of the existence or benefits of social media marketing. However, those that are aware have been caught off guard and unable to adapt to the speed at which social media marketing is revolutionizing the way in which companies communicate with customers and potential customers and the way in which consumers are voicing their opinions about companies and their products. Some social media experts believe that the day of the one-way message controlled by brand owners may – at least for now – be dying.

The ever-increasing number of social networking sites, blogs and customer review sites are making it difficult, if not seemingly impossible, for brand owners to manage their advertising message, reputation and intellectual property assets online. That difficulty will undoubtedly intensify as the number of participants of user-generated content sites explode to an estimated one billion by 2012. It is estimated that there will be four billion postings, known as "tweets," on Twitter in 2009 and forty billion in 2010. Clearly, the pace at which people are using social media networks to connect with friends and seek out online relationships with business is exploding, which is why some companies see social media as an opportunity to connect with consumers that they could not otherwise reach with traditional marketing efforts.

The question being asked by many social media experts is whether companies that have not already done so will embrace this potentially golden opportunity to reach tens of thousands, if not hundreds of thousands, of traditionally unattainable consumers with the strike of a computer key or be immobilized by fear. Much of the fear surrounding social media marketing stems from companies not understanding its intricacies. And although companies fear social media itself, as if were the "boogeyman" lurking in the shadows, they also fear doing nothing and missing opportunities while their competitors strike gold.

Other reasons companies fear social media marketing include losing control of the message and brand, return on time investment and the posting of negative comments or feedback by customers, employees and ex-employees. The truth of the matter is that whether or not companies use social media marketing, their customers may already be talking about them and their products. The problem: companies do not know what they are saying and therefore they are not able to dispel misinformation and inaccurate statements and thwart infringements of their intellectual property. Negative comments or misinformation left unchallenged become perception and that perception becomes reality for potential customers, resulting in lost revenues. Interestingly, just the other day, while on my Twitter account, one particular social media expert that I follow posted a "tweet" for her nearly 6000 followers that decried her customer service experience earlier that day at one of the largest office supply companies. Is that company listening? If so, kudos to it! If not, it might want to be. Yet in a more prominent case of a dissatisfied customer taking his frustration over dismal customer service to the social media-sphere is that of Halifax singer-songwriter Dave Carroll whose guitar had been severely damaged by United Airlines. It is reported that in the spring of 2008, Carroll and his band, Sons of Maxwell, were travelling for a tour when Carroll says he and his band members noticed United Airlines baggage handlers throwing their instruments on the tarmac in Chicago. He then later discovered that his $3,500 guitar had been damaged. After months of baggage claims and e-mails went nowhere, Carroll, in protest, wrote and posted a song on YouTube® about his ordeal, which went viral overnight and became a public relations nightmare for United Airlines.

In addition to being concerned about negative posts and commentary, companies must also be concerned with the unauthorized use and misuse of their intellectual property, including their trademarks. Unauthorized use and misuse of company trademarks cannot be ignored. Indeed, legal precedent requires trademark owners to police and enforce unauthorized uses of their trademarks or risk losing valuable trademark rights. So rather than putting their heads in the sand and waiting for the social media marketing "fad" to blow over, companies need to put their ears to the ground, listen, and join the conversation. At least then they can try to influence the message and conversations about them and their products.

Joining the conversation will allow companies to engage consumers directly and detect negative comments or misinformation and turn them into positive ones. And they just may find that they have brand champions that will defend their products. Joining the conversation also allows companies to monitor for certain infringements to its intellectual property, such as trademark infringement, trademark hijacking, counterfeiting and libelous speech, which can damage their goodwill and reputation. If their brands have been "hijacked," they need to know what messages the impersonators are spreading and what impact the impersonators are having on their brands.

One recently-reported high profile case involved Tony La Russa, the manager of the St. Louis Cardinals Major League baseball team, whose identity was hijacked on Twitter by an imposter. The suit filed in the Superior Court of California in San Francisco, which has since been dismissed, claimed that someone created an account under La Russa's name and posted "tweets," which gave the false impression that the comments came from La Russa. The suit also said that the comments were "derogatory and demeaning" and thus damaged La Russa's trademark rights. There have also been reports of corporate sabotage. For example, it was reported that a public relations firm allegedly set up a Twitter account in the name of a rival firm. The firm then allegedly disseminated malicious "tweets" for two months before the competing firm realized that its identity had been hijacked.

What is illustrated by the preceding examples is that one of the most basic steps that brand owners can take to minimize the risk of trademark infringement or hijacking on social media sites is registering their names. Before "jumping" into social media marketing, however, they should have a well-planned branding strategy. Experts do not recommend that companies "jump” into social media marketing because social media requires a well-designed strategy for it to be most effective.

Once brand owners have reserved their names, they should next institute a monitoring program to detect negative, inaccurate and misleading comments about them and intellectual property infringements. Although gaining complete control over all negative comments and unauthorized use of company intellectual property is not practical or feasible, a certain amount of control is achievable by monitoring social network sites on a regular and systematic basis.

A monitoring program can consist of a self-monitoring program, carried out by company employees or an independent monitoring service company. Before implementing a monitoring program, however, it is advisable to first decide what sort of content poses the greatest risk and what type of content can be ignored. Most companies should at least be concerned with the following types of content: trademark infringement, dilution, counterfeit sale of goods or services, defamatory speech, brand tarnishment, impersonation of company employees and false or misleading advertising. Companies should also consider which of the social network and user-generated content sites are most relevant to their industry and business. The more common sites to monitor include Facebook, Twitter, MySpace, YouTube, Wikipedia®, Second Life and other virtual worlds, eBay®, industry blogs and product and service review sites.

A self-monitoring program should include a weekly or monthly review of a number of available social media web sites. Alternatively, companies may decide to hire an outside company to monitor for negative comments and infringements. In addition to monitoring the applicable sites, monitoring service companies can also, if need be, rehabilitate a damaged brand, caused by negative comments, by developing new web pages featuring favorable commentary, which will push unflattering comments and web pages to the bottom of search engine result pages. Companies must be aware, however, that creating "false" and "misleading" positive reviews about their company, known as "astroturfting," may violate false adverting laws, which may trigger government action against the violating company. The service companies can also generate monthly reports that list negative comments made about companies during the previous month.

Once companies find activities that are damaging to their brands, they will need to consider the level of damage being caused, the nature of the activities and the company or individual(s) involved. If the activities are clearly intended to harm the brand, then swift and strong action is probably warranted. However, if the infringement is innocent or at least not intentional, a soft approach is likely the best strategy. The last thing any company wants is for the recipient of a strong cease and desist letter – who was innocently infringing the property – to post it on his or her blog and post negative commentary. A good approach is to review each "infringement" on a case-by-case basis.

Some companies realizing the importance of having a presence on social networking sites are discovering that someone has already registered their company and/or brand names on Facebook and Twitter, for example. What can these companies do? The first step is to review the site operator's terms of service to find out how trademark infringement and trademark hijacking cases are handled by that service provider and then file a complaint. If the complaining party does not obtain a favorable result from the site owner, what then? Are there current laws, at least in the U.S., that would remedy the on-going infringement?

Presently, there is uncertainty as to whether current trademark laws are designed to sufficiently address the numerous trademark issues presented by social networking sites. The problem with current U.S. laws is that they tend to cover infringement of second-level domain names. Second-level domain names appear in the Web address immediately preceding the top-level domain, such as www.facebook.com. This enables McDonalds to use the existing U.S. trademark laws against a cyber squatter who registers www.mcdonalds.com. On both Facebook and Twitter, however, users have the ability to select personalized "user names," not "domain names," which appear as part of the URL or web address, but not part of the domain name (i.e., facebook.com/username). Unless the site owner, i.e., Twitter or Facebook, is agreeable to removing an infringing username from its service after receiving a complaint or a "squatter" is agreeable to relinquishing control of the infringing username to the rightful trademark owner, the trademark owner may have no choice but to file suit against the infringing party in court based upon traditional trademark infringement principles.

In an effort to minimize the risks of trademark hijacking, trademark infringement and damage to brand reputation that may occur on social media networking sites, it is advisable to take precautionary and proactive steps. Those steps include reserving company names and key permutations of company names with social networking sites, developing a presence in social networking communities, assigning company employees that are responsible for overseeing the monitoring process, understanding terms of use for each of the major social networks and develop consistent enforcement procedures.

The advent of social networking and user-generated content sites has given companies a myriad of new opportunities to promote their brands that were not previously available with traditional media. However, those opportunities have also created new challenges for managing company brands. Those challenges will likely require companies to institute consistent enforcement programs, which should include taking swift action when misuse of company brands are detected. The development of an enforcement program, and commitment to systematically monitor for potentially damaging activities, can go a long way toward making sure that online social networking sites remain free of content that is damaging to company brands.

How to Acquire United States Trademark Rights

2010-01-10T03:36:00.000-08:00

In the United States, unlike many foreign countries, trademark rights stem from use, not from registration. Use of your trademark must be “public,” however, and must be used to designate certain products and/or services. The mark cannot simply be a “project name” or a name used internally between company employees.

Actual sales may not be necessary to create trademark rights. Pre-sales activities, such as attending trade shows, placing advertisements and giving product presentations to prospective buyers may be enough to establish trademark rights as against subsequent users of the same or confusingly similar mark. However, a federal trademark registration will not issue until your mark has been put to use in connection with the actual sale of your products or carrying out of your service.

While registration is not required to create trademark rights in the United States (and in certain other countries), securing federal trademark protection is a best practice and carries with it certain valuable rights, presumptions, and remedies for trademark infringement. Even if a mark has not yet been put to use, a federal trademark application may still be filed on an “intent to use” basis, thereby potentially reserving rights in that mark for your company. That holds true even if a competitor were to begin use of the same or confusingly similar mark after the filing of your application but before your company’s use of the mark.

Planning ahead and properly clearing marks and filing “intent-to-use” federal trademark applications at least four months in advance of product launches is a recommended strategy for securing rights in marks before their actual use. That strategy may also avoid the all too common last minute scrambling to find available names. You know, that last-minute Friday afternoon exercise of “the product launches on Monday and we really really really need you to approve this name, Roger!”

Yeah, that one.

The Four D’s of Brand Name Selection

2009-12-28T18:55:00.000-08:00

Combating Brand Damage in the Age of Social Media

2009-12-14T19:05:00.000-08:00

So you’ve decided that the social media marketing “hype” is here to stay. And perhaps you’re concerned that if you don’t come up with a social marketing campaign soon, your boss will figure out that your main competitor has, and give Johnson your corner office. Whatever the reason may be, you feel it’s time to discover the power of marketing your wares on social network sites, including Facebook, Twitter, YouTube, Ning, MySpace and company blog.

However, you’re still a bit apprehensive to make use of these new “creatures” called social network sites because you fear “losing” control of your message and, possibly worse, angry customers may post negative comments about your company’s product. The truth of the matter is that whether or not your company launches a social media marketing campaign, your customers and potential customers may already be talking about it in the social mediasphere. The problem: you don’t know what they’re saying and therefore you’re not able to dispel misinformation about your company.

Misinformation may be the least of your worries, however. What about trademark infringement, counterfeiting or libelous speech that can severely damage a company’s goodwill and reputation?

Companies, whether or not they have opted into the social mediashere, should have a monitoring program in place to detect negative comments about them and infringements against their intellectual property that take place on social media sites. A monitoring program can consist of a self-monitoring program, carried out by an employee of the company, or one that is carried out by an independent monitoring service company.

A self-monitoring program should include a weekly or monthly review of a number of available social media web sites, including the following sites:

Wikipedia, Facebook, MySpace, Twitter, Second Life and other virtual worlds, eBay, major industry blogs, fan sites, Amazon.com or other online shopping sites that offer reviews, backtype.com (alerts for comments that include company names and brands), icerocket.com (searches blogs, Twitter, MySpace, news and images), Google.com/alerts (alerts for use of company names and brands on blogs, the Web, news, videos, discussion groups) and technorati.com (searches blogs).

Alternatively, you may decide to hire an outside company to monitor for negative comments and infringements. In addition to monitoring these sites, monitoring service companies can also, if need be, rehabilitate a damaged image caused by negative comments by developing new web pages and commentary about your company, which push unflattering comments and web pages to the bottom of search engine result pages. There are also service companies that can send you monthly reports listing all negative comments made during the previous month.

If your company is so lucky to detect negative comments or – worse – trademark infringement, counterfeiting or libelous speech against it or its products, it’s time to seek legal advise on how to best confront the infringer(s).

FTC Publishes Final Guidelines Governing Testimonial Advertisements, Bloggers, Celebrity Endorsements

2009-12-02T18:57:00.000-08:00

The Federal Trade Commission ("FTC") recently announced the following:

The Federal Trade Commission recently announced that it has approved final revisions to the guidance it gives to advertisers on how to keep their endorsement and testimonial ads in line with the FTC Act.

The notice incorporates several changes to the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, which address endorsements by consumers, experts, organizations, and celebrities, as well as the disclosure of important connections between advertisers and endorsers. The Guides were last updated in 1980.

Under the revised Guides, advertisements that feature a consumer and convey his or her experience with a product or service as typical when that is not the case will be required to clearly disclose the results that consumers can generally expect. In contrast to the 1980 version of the Guides – which allowed advertisers to describe unusual results in a testimonial as long as they included a disclaimer such as “results not typical” – the revised Guides no longer contain this safe harbor.

The revised Guides also add new examples to illustrate the long standing principle that “material connections” (sometimes payments or free products) between advertisers and endorsers – connections that consumers would not expect – must be disclosed. These examples address what constitutes an endorsement when the message is conveyed by bloggers or other “word-of-mouth” marketers. The revised Guides specify that while decisions will be reached on a case-by-case basis, the post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement. Thus, bloggers who make an endorsement must disclose the material connections they share with the seller of the product or service. Likewise, if a company refers in an advertisement to the findings of a research organization that conducted research sponsored by the company, the advertisement must disclose the connection between the advertiser and the research organization. And a paid endorsement – like any other advertisement – is deceptive if it makes false or misleading claims.

Celebrity endorsers also are addressed in the revised Guides. While the 1980 Guides did not explicitly state that endorsers as well as advertisers could be liable under the FTC Act for statements they make in an endorsement, the revised Guides reflect Commission case law and clearly state that both advertisers and endorsers may be liable for false or unsubstantiated claims made in an endorsement – or for failure to disclose material connections between the advertiser and endorsers. The revised Guides also make it clear that celebrities have a duty to disclose their relationships with advertisers when making endorsements outside the context of traditional ads, such as on talk shows or in social media.

The Guides are administrative interpretations of the law intended to help advertisers comply with the Federal Trade Commission Act; they are not binding law themselves. In any law enforcement action challenging the allegedly deceptive use of testimonials or endorsements, the Commission would have the burden of proving that the challenged conduct violates the FTC Act.

United States Trademark Registration Process Overview

2009-11-25T08:14:00.000-08:00

A trademark includes a word, name, symbol, device, color, sound and shape which is used for goods to indicate their source and to distinguish them from the goods of others. A service mark is the same as a trademark except that it identifies services rather than goods. The terms "trademark" and "mark" are commonly used to refer to both trademarks and service marks.

Trademark rights are acquired through using the mark in commerce. A trademark owner does not need federal “approval” to use a mark. Once trademark rights have been acquired, the trademark owner may prevent others from using a confusingly similar mark, but possibly not prevent others from using the same or similar mark for unrelated goods or services. Marks that are used in interstate commerce may be registered with the United States Patent and Trademark Office (“USPTO”).

Before filing a trademark application with the USPTO, it is advisable to conduct, at a minimum, a preliminary availability search, which includes a search of the USPTO trademark database, Internet and domain name registrar. If the searches do not find any potentially conflicting marks, the next step may be to order a full trademark search, which is more comprehensive than the preliminary search.

If the availability search is clear, it is generally advisable to file a federal trademark application. Once a federal trademark application is filed, an examiner at the USPTO will review the application to determine whether there are any procedural (i.e., objections to the identification of goods and/or services) and substantive issues (i.e., whether the mark conflicts with another mark or whether the mark is merely descriptive). If an examining attorney determines that the mark should not be registered, for whatever reason, the examining attorney will issue an Office action, which details the reason(s) for the refusal. If the examining attorney issues an Office action, a response to the Office action must be filed within six months from the mailing date of the Office action, or the application will go abandoned.

If the examining attorney does not raise any objections, or if the applicant overcomes all objections, the examining attorney should approve the mark for publication and the mark will then be published in the USPTO’s weekly notice publication known as the Official Gazette. Once the mark has been published for opposition, any party who believes it may be damaged by registration of the mark has thirty days from the date of publication to object to the mark’s registration. If no objection is filed, and the application is based upon actual use of the mark in commerce, the mark should then proceed to registration. However, if the application is based upon an intent-to-use the mark (meaning the mark was not in use as of the application filing date and possibly publication date), the Office will issue what is known as a “Notice of Allowance.” The applicant will then have six months in which to prove use of its mark. If the owner has not yet put the mark to use at the end of the six-month period, the owner may request a six-month extension of time in which to file the use affidavit. The applicant will have a total of five six-month extensions – or three years from the date of the issuance of the Notice of Allowance – in which to show use of its mark. If use is not established by the end of the three-year period, the application will go abandoned.

Once the applicant has filed an acceptable affidavit of use, the registration certificate should then issue. Once a registration issues, the trademark owner will receive full protection provided under federal trademark law. In order to maintain those rights, the trademark owner must take all necessary steps to maintain the registration. Federal trademark rights are indefinite as long as the trademark owner continues to use the mark for the goods and/or services listed in the registration and timely makes all necessary maintenance filings. The trademark owner must file an affidavit of continued use or excusable nonuse between the fifth and sixth year of registration. The trademark owner must also file a renewal application every ten years from the date of registration.

CAFC Affirms TTAB’s Ruling That “Mattress.Com” is Generic

2009-11-16T18:49:00.000-08:00

The Court of Appeals for the Federal Circuit (“CAFC”) affirmed the Trademark Trial and Appeal Board’s decision that the term MATTRESS.COM is generic for the retail sale of mattresses, beds and bedding. Thus, the CAFC held that the term is not eligible for registration on the Supplemental Register (the trademark register for descriptive terms that are capable of becoming trademarks one day).

The Board considered whether the combination of the terms MATTRESS and .COM, as a whole, creates nothing more than a generic term. The parties agreed that the genus of services is the online retail sale of mattresses, beds and bedding. When the Board considered the term “Mattress.com” in relation to the relevant services, the Board concluded that because the website operates under the term “mattress.com” to provide mattresses, the relevant public would not perceive that term as a trademark, but rather as a generic term that refers to the online sale of mattresses.

In its attempt to persuade the Court, Appellant argued that the term MATTRESS.COM is not generic because the average purchaser would not use that term to refer to online retailers of mattresses. The Court, however, wisely stated that the test is not only whether the relevant public would itself use the term to describe the genus of products, but also whether the relevant public would understand the term to be generic.

The CAFC found substantial evidence in the record to support the Board’s ruling that “consumers would see MATTRESS.COM and would immediately recognize it as a term that denotes a commercial website rendering retail services featuring mattresses.”

Does the Board’s and CAFC’s ruling mean that the owner of the site Mattress.com does not own a valuable term or domain name? Who else needs to use the term Mattress.com? Who else would promote themselves as Mattress.com? If they did, wouldn’t they drive business to a competitor’s website? Even though the terms “Mattress” and “.Com” are generic terms for online retail sale of mattresses, seems to me that the owner of the domain name holds a monopoly on the generic term “mattress.com,” which, in essense, is tantamount to owning a protectable trademark, yes?

Four Reasons Companies Should Care About Their Trademarks

2009-11-09T19:33:00.000-08:00

1. Consumers Use Trademarks to Find Products

Properly selected trademarks distinguish companies’ products from those of their competitors. If trademarks don’t adequately distinguish the associated widgets from the competition, their owners will inevitably lose sales. Those trademarks would also be worthless company assets. Companies should carefully select trademarks that will effectively communicate a product’s source, cut through marketing “clutter” and capture consumers’ attention.

2. Trademarks are used to Identify Quality

Consumers use trademarks to identify the quality of products. Once consumers become familiar - and satisfied - with a particular product’s quality and price, consumers will continue to seek out that product time and time again. If a product’s quality is inconsistent, however, consumers will inevitably abandon that product in favor of another. Companies that deliver their products or services at inconsistent levels of quality risk severe damage to their brands. Those that offer their products at a consistent level of quality - and at a fair price – can build strong brands.

3. Trademarks are used as Decision-Making Tools

Trademarks reduce time, cost and effort in the decision-making process by allowing consumers to quickly select products based upon past experiences. Trademarks can convey emotional attributes to consumers that help with the decision-making process. A company’s trademark may convey a certain level of quality or image as well as other messages – such as a lifestyle, aspirations and desires. Trademark owners should consider what attributes consumers desire from their products when selecting new product names. Then select a name that starts the positioning process and drives the brand.

4. Trademarks Can Be A Company’s Most Valuable Assets

Trademarks may potentially be a company’s most valuable assets. Trademarks have the potential to increase in value over time. Trademarks can be used as collateral to secure business loans, which can be used for business expansion. Trademarks can also be licensed to third parties to designate new product offerings, which can increase revenues. At last count, the Coca-Cola trademark was estimated to have a value of 70 billion dollars – which is more than all of the company’s tangible assets.

There are plenty of reasons why companies should care about their trademarks. Many more than the four listed above. Simply understanding and appreciating the basic value of trademarks and how they can drive a brand are the best reasons of all and a good place to start.

What are some other reasons to care about trademarks/brand names?

It’s Midnight – Do You Know Where Your Trademarks Are?

2009-11-05T20:08:00.000-08:00

Failure to “police” trademarks can result in the lose of trademark rights. Generally, companies “police” their marks by requesting that employees report uses of confusingly similar marks by others and by monitoring newly-filed trademark applications at the United States Patent and Trademark Office and/or throughout the world. To enhance the policing effort, professional watch services are available.

A watch service is designed to alert trademark owners to newly filed trademark applications for marks that may be confusingly similar to their own. The service can be customized to meet a company’s particular needs, depending upon its unique circumstances. For example, a watch service may cover only the United States or may cover a block of countries. One major benefit of a trademark watch service is that for a nominal annual fee, trademark owners may prevent infringing uses of their marks early on, thereby avoiding the need to engage in costly litigation.

In today’s global market, a trademark watch service has become an invaluable tool for companies to monitor and protect one of their most valuable assets: their brand names.

Best of: Protecting Brands in Social Media Age

2009-10-30T05:38:00.000-07:00

The ever-increasing number of social networking sites, blogs and customer review sites are making it difficult, if not seemingly impossible, for brand owners to manage their advertising message, reputation and intellectual property assets online. That difficulty will undoubtedly intensify as the number of participants of user-generated content sites explode to an estimated one billion by 2012. It is estimated that there will be four billion postings, known as "tweets," on Twitter in 2009 and forty billion in 2010. Clearly, the pace at which people are using social media networks to connect with friends and seek out online relationships with business is exploding, which is why some companies see social media as an opportunity to connect with consumers that they could not otherwise reach with traditional marketing efforts.

The question being asked by many social media experts is whether companies that have not already done so will embrace this potentially golden opportunity to reach tens of thousands, if not hundreds of thousands, of traditionally unattainable consumers with the strike of a computer key or be immobilized by fear. Much of the fear surrounding social media marketing stems from companies not understanding its intricacies. And although companies fear social media itself, as if were the "boogeyman" lurking in the shadows, they also fear doing nothing and missing opportunities while their competitors strike gold.

Other reasons companies fear social media marketing include losing control of the message and brand, return on time investment and the posting of negative comments or feedback by customers, employees and ex-employees. The truth of the matter is that whether or not companies use social media marketing, their customers may already be talking about them and their products. The problem: companies don't know what they are saying and therefore they are not able to dispel misinformation and inaccurate statements and thwart infringements of their intellectual property. Negative comments or misinformation left unchallenged become perception and that perception becomes reality for potential customers, resulting in lost revenues. Interestingly, just the other day, while on my Twitter account, one particular social media expert that I follow posted a "tweet" for her nearly 6000 followers that decried her customer service experience earlier that day at one of the largest office supply companies. Is that company listening? If so, kudos to it! If not, it might want to be.

Yet in a more prominent case of a dissatisfied customer taking his frustration over dismal customer service to the social media-sphere is that of Halifax singer-songwriter Dave Carroll whose guitar had been severely damaged by United Airlines. It is reported that in the spring of 2008, Carroll and his band, Sons of Maxwell, were travelling for a tour when Carroll says he and his band members noticed United Airlines baggage handlers throwing their instruments on the tarmac in Chicago. He then later discovered that his $3,500 guitar had been damaged. After months of baggage claims and e-mails went nowhere, Carroll, in protest, wrote and posted a song on YouTube® about his ordeal, which went viral overnight and became a public relations nightmare for United Airlines. See video here.

In addition to being concerned about negative posts and commentary, companies must also be concerned with the unauthorized use and misuse of their intellectual property, including their trademarks. Unauthorized use and misuse of company trademarks cannot be ignored. Indeed, legal precedent requires trademark owners to police and enforce unauthorized uses of their trademarks or risk losing valuable trademark rights. So rather than putting their heads in the sand and waiting for the social media marketing "fad" to blow over, companies need to put their ears to the ground, listen, and join the conversation. At least then they can try to influence the message and conversations about them and their products.

Joining the conversation will allow companies to engage consumers directly and detect negative comments or misinformation and turn them into positive ones. And they just may find that they have brand champions that will defend their products. Joining the conversation also allows companies to monitor for certain infringements to their intellectual property, such as trademark infringement, trademark hijacking, counterfeiting and libelous speech, which can damage their goodwill and reputation. If their brands have been "hijacked," they need to know what messages the impersonators are spreading and what impact the impersonators are having on their brands.

One recently-reported high profile case involved Tony La Russa, the manager of the St. Louis Cardinals Major League baseball team, whose identity was hijacked on Twitter by an imposter. The suit filed in the Superior Court of California in San Francisco, which has since been dismissed, claimed that someone created an account under La Russa's name and posted "tweets," which gave the false impression that the comments came from La Russa. The suit also said that the comments were "derogatory and demeaning" and thus damaged La Russa's trademark rights. There have also been reports of corporate sabotage. For example, it was reported that a public relations firm allegedly set up a Twitter account in the name of a rival firm. The firm then allegedly disseminated malicious "tweets" for two months before the competing firm realized that its identity had been hijacked.

What is illustrated by the preceding examples is that one of the most basic steps that brand owners can take to minimize the risk of trademark infringement or hijacking on social media sites is registering their names. Before "jumping" into social media marketing, however, they should have a well-planned branding strategy. Experts do not recommend that companies "jump” into social media marketing because social media requires a well-designed strategy for it to be most effective.

Once brand owners have reserved their names, they should next institute a monitoring program to detect negative, inaccurate and misleading comments about them and intellectual property infringements. Although gaining complete control over all negative comments and unauthorized use of company intellectual property is not practical or feasible, a certain amount of control is achievable by monitoring social network sites on a regular and systematic basis.

A monitoring program can consist of a self-monitoring program, carried out by company employees or an independent monitoring service company. Before implementing a monitoring program, however, it is advisable to first decide what sort of content poses the greatest risk and what type of content can be ignored. Most companies should at least be concerned with the following types of content: trademark infringement, dilution, counterfeit sale of goods or services, defamatory speech, brand tarnishment, impersonation of company employees and false or misleading advertising. Companies should also consider which of the social network and user-generated content sites are most relevant to their industry and business. The more common sites to monitor include Facebook, Twitter, MySpace, YouTube, Wikipedia®, Second Life and other virtual worlds, eBay®, industry blogs and product and service review sites.

A self-monitoring program should include a weekly or monthly review of a number of available social media web sites. There are search engines that can help companies find damaging content about them. Those sites include icerocket.com (searches blogs, Twitter, MySpace, news and images), Google.com/alerts (alerts for use of company names and brands on blogs, the Web, news, videos, discussion groups) and technorati.com (searches blogs).

Alternatively, companies may decide to hire an outside company to monitor for negative comments and infringements. In addition to monitoring the applicable sites, monitoring service companies can also, if need be, rehabilitate a damaged brand, caused by negative comments, by developing new web pages featuring favorable commentary, which will push unflattering comments and web pages to the bottom of search engine result pages. Companies must be aware, however, that creating "false" and "misleading" positive reviews about their company, known as "astroturfting," may violate false adverting laws, which may trigger government action against the violating company. The service companies can also generate monthly reports that list negative comments made about companies during the previous month.

Once companies find activities that are damaging to their brands, they will need to consider the level of damage being caused, the nature of the activities and the company or individual(s) involved. If the activities are clearly intended to harm the brand, then swift and strong action is probably warranted. However, if the infringement is innocent or at least not intentional, a soft approach is likely the best strategy. The last thing any company wants is for the recipient of a strong cease and desist letter – who was innocently infringing the property – to post it on his or her blog and post negative commentary. A good approach is to review each "infringement" on a case-by-case basis.

Some companies realizing the importance of having a presence on social networking sites are discovering that someone has already registered their company and/or brand names on Facebook and Twitter, for example. What can these companies do? The first step is to review the site operator's terms of service to find out how trademark infringement and trademark hijacking cases are handled by that service provider and then file a complaint. If the complaining party does not obtain a favorable result from the site owner, what then? Are there current laws, at least in the U.S., that would remedy the on-going infringement?

Presently, there is uncertainty as to whether current trademark laws are designed to sufficiently address the numerous trademark issues presented by social networking sites. The problem with current U.S. laws is that they tend to cover infringement of second-level domain names. Second-level domain names appear in the Web address immediately preceding the top-level domain, such as www.facebook.com. This enables McDonalds to use the existing U.S. trademark laws against a cyber squatter who registers www.mcdonalds.com. On both Facebook and Twitter, however, users have the ability to select personalized "user names," not "domain names," which appear as part of the URL or web address, but not part of the domain name (i.e., facebook.com/username). Unless the site owner, i.e., Twitter or Facebook, is agreeable to removing an infringing username from its service after receiving a complaint or a "squatter" is agreeable to relinquishing control of the infringing username to the rightful trademark owner, the trademark owner may have no choice but to file suit against the infringing party in court based upon traditional trademark infringement principles.

In an effort to minimize the risks of trademark hijacking, trademark infringement and damage to brand reputation that may occur on social media networking sites, it is advisable to take precautionary and proactive steps. Those steps include reserving company names and key permutations of company names with social networking sites, developing a presence in social networking communities, assigning company employees that are responsible for overseeing the monitoring process, understanding terms of use for each of the major social networks and develop consistent enforcement procedures.

The advent of social networking and user-generated content sites has given companies a myriad of new opportunities to promote their brands that were not previously available with traditional media. However, those opportunities have also created new challenges for managing company brands. Those challenges will likely require companies to institute consistent enforcement programs, which should include taking swift action when misuse of company brands are detected. The development of an enforcement program, and commitment to systematically monitor for potentially damaging activities, can go a long way toward making sure that online social networking sites remain free of content that is damaging to company brands.

Undressing Trade Dress for Brand Owners - Protecting The Overall Appearance of Products and Services

2009-10-23T19:18:00.000-07:00

Copyrights, patents and trademarks are familiar concepts to most business owners when it comes to their intellectual property. But what about “trade dress” protection? What is trade dress anyway? Trade dress is a trademark concept that consists of the overall look of a product’s packaging and/or of a product’s shape, such as the shape of the original Coca-Cola® bottle design, and combination of certain elements that appear on a product or its packaging. Trade dress also includes the method for displaying wine bottles in a retail shop, the appearance of a teddy bear toy, the design of a door knob, design of a handbag, a fish-shaped cracker, smells, sounds, cover of a book, distinctive display of products in a retail store and motif of a restaurant, such as the motif of Jimmy Buffet’s famous restaurant Margaritaville®.

Much like the traditional trademark (i.e., word mark or design logo), trade dress must be used in a manner that signifies product source. Thus, product features that serve ornamental design only, with no source-identifying role, cannot be protected under trade dress law. For example, if a certain product is coveted by consumers because the design is pleasing, no matter the source, then trade dress protection will not be granted under the law.

Packaging trade dress (i.e., restaurant motif, product packaging, cover of a book and retail display) may receive trade dress protection immediately upon use, as long as the trade dress is inherently distinctive, meaning that consumers would perceive the trade dress as a source identifier upon first use. However, some trade dress, including product configuration trade dress (i.e., the configuration design of a bottle used to hold cologne) will not receive trade dress protection upon first, but rather no protection will be granted until secondary meaning attaches to the design. Meaning that consumers have come to associate the product configuration as being a trademark or source identifier.

The best way for brand owners to develop trade dress is to use “look for” advertising. This is advertising that draws attention to the particular features claimed as trade dress. The purpose of “look for” advertising is to associate the trade dress features in the minds of consumers with a single source. However, brand owners must be careful not to promote only functional aspects of the product, since functional features of a product will not be given protection under trade dress law - although a certain combination of functional aspects may be protectable. What’s considered “functional” depends upon the specific product or packaging sought to be protected. For example, although the color black is not functional for home insulation, the color black is considered functional for boat motors because black motors are perceived as being smaller than their actual size, which is a desirable characteristic. Therefore, because boat owners desire black motors for that reason, the color black cannot serve as a source identifier.

Because trademarks – and trade dress – may live on in perpetuity as long as they are put to continuous use, and because they serve as valuable company assets, companies should consider whether they own certain trade dress – and trademark - rights and, if so, whether those rights are being infringed by competitors. Brand owners should also seek to protect those rights by registering them with the federal government.

Brand Name Pitfall No. 2: Failing to Properly Clear Selected Brand Names

2009-10-18T19:19:00.000-07:00

One of the things that concerns me most as a trademark attorney is seeing brand owners adopt new brand names without undertaking proper clearance procedures. I sometimes see it my own practice. Usually it’s the 11th hour rush to launch a new product with the mindset of “nothing will get in the way of this important launch!” – not even trademark attorneys, apparently. Why companies wait until the last minute to find – what I consider to be one of the most important aspects of a successful brand – a name, I don’t understand.

Sometimes a product might be far superior to others, yet why does it sometimes rank number 4 while lower quality products rank 1, 2 or 3? Sometimes it’s the name. As I have said before, and as I try to convey to my clients, the “right” brand name can drive a product, while the “wrong” name can kill it before it leaves the starting gate. So why do some brand owners ignore the importance of properly clearing brand names? It is the budget? Not understanding the importance of clearance? Usually it can be a bit of both.

What is the value of spending $1000 or $2000 for a trademark availability search and availability opinion? First, a search will determine whether the selected name is likely to infringe third party trademark rights. What’s less expensive, re-branding after launch, which in some cases may be years after launch, or $1000-$2000 to make sure the name is free and clear? Believe me, I've seen companies go through re-branding projects after receiving a threatening cease and desist letter and it isn’t pretty. The cost to re-brand can be tens if not hundreds of thousands of dollars, not to mention the cost to educate customers and potential customers of the new name. Second, properly clearing a mark can drastically reduce the risk of infringements and lawsuits. Third, a proper search will determine whether the company can expand into ancillary products and services. I’ve witnessesd companies launch product A with the intend to expand into product B but to later find - to their dismay - that another company has already launched that name or confusingly similar name for product B. Now what?

Fourth, a search will determine whether a company can expand nationally or will be confined to only certain geographic regions. Fifth, a search will determine whether a mark is strong or weak in the relevant field. That is very important because it’s not the wisest decision to adopt a name or a term that is already widely used within a particular field. How will customers differentiate your product from competitors with a similar name? Sixth, lack of proper clearance has been held to constitute willful trademark infringement, which can result in loss of profits, statutory damages for the plaintiff and an award for attorneys’ fees against the infringer. Ouch! Seventh, on a global scale, proper clearance can also determine whether the adopted name has a negative connotation in a foreign language. What were they thinking when Electrolux launched the slogan “Nothing Sucks Like An Electrolux” in the United States and Pepsico launched the slogan “Come Alive with the Pepsi Generation” in China – which translates into English as “Pepsi Brings Your Ancestors Back from the Grave”!

All selected names should be properly cleared prior to their adoption. To ensure that proper clearance can be undertaken, names should be selected well in advance of launch – preferably 3-6 months. I know many – if not most - marketers think that 3-6 months sounds crazy. But in my opinion, launching a new product without taking the necessary precautions to clear the name sounds just a bit crazier.

Louis Vuitton Wins Case Against Service Providers for Trademark and Copyright Infringement

2009-10-12T20:24:00.000-07:00

Louis Vuitton – the high-end fashion retailer - has been awarded damages in excess of $30 million dollars for willful trademark infringement and $900,000 for willful copyright infringement. The infringers were a pair of website hosting companies. After repeated requests for removal of the infringing web sites went ignored, Louis Vuitton filed action for contributory trademark infringement and copyright infringement against the service providers.

The defendant’s raised the defense of immunity under the Digital Millennium Copyright Act’s (DMCA) safe harbor provision, which exempts online service providers from claims of copyright infringement as a result of the actions of their customers. However, the DMCA only creates a safe harbor for online service providers against copyright liability if they adhere to and qualify for certain safe harbor guidelines and promptly block access to or remove allegedly infringing materials upon notice of the infringement by the copyright holder. Under the DMCA, if the service provider fails to immediately remove the infringing copyright protected materials, the service provider may be subject to a claim of direct copyright infringement.

Although the defendants did not commit direct copyright infringement of the Louis Vuitton merchandise, they hosted the web sites that did. And once placed on notice of the ongoing copyright infringements, they failed to take action as required under the DMCA. They were also found to have control of the infringing web sites. Thus, were found to have commited contributory trademark infringement. To be held accountable for the infringing acts of others, defendants must know - or they should have known - that a third party’s actions constitute an infringement and must have provided substantial assistance to the direct infringers.

What this case demonstrates is that the DMCA’s safe harbor provision does not permit service providers to ignore copyright infringements taking place on their servers once properly notified. To do so may result in large damage awards as seen in this case.

Avoiding A Brand Name Trap

2009-10-08T20:14:00.000-07:00

In a recent decision, the Trademark Trial and Appeal Board (the “Board”), the administrative court for the United States Trademark Office, upheld the trademark examiner’s refusal to register the trademark SCENT STRIPES for various bag products, including garbage bags, general purpose plastic bags, paper gift bags, bags for disposable diapers and sandwich bags. The trademark examining attorney refused registration of the mark on the ground it merely describes a characteristic, feature and/or function of the products.

The examiner concluded that the mark SCENT STRIPES for items such as garbage bags, gift bags and diaper bags is descriptive because those products feature a scented stripe. The examiner also pointed to Internet evidence showing that the term “scented stripe” is used in connection with fragrances.

Based upon the record, the Board held that the average consumer of applicant’s products would immediately understand that the products feature scented stripes to eliminate odors. Accordingly, the Board upheld the refusal to registration.

When selecting a brand name, it is important to remember that a term or terms that immediately convey a certain feature, characteristic, purpose, ingredient or use of the products or services are considered to be descriptive; thus not legally protectable upon first use. It is also important to remember that a term only needs to describe one aspect of the product or service for that term to be descriptive – thus uprotectable as a mark. Also, the determination of whether a mark is descriptive is not determined in the abstract, but rather in relation to the products themselves. Meaning would someone who knows what the products are immediately understand the descriptive meaning of the mark?

Why Selection of Descriptive Trademarks is Not Recommended

Although marketers love descriptive marks because they can “sell” products with little advertising budget, they fail to appreciate that they are not immediately protectable as trademarks. Meaning that competitors can also use that "trademark" without trademark infringement. The reason there’s no trademark infringement is because consumers generally don't perceive descriptive marks as source identifiers (or trademarks) but rather as descriptors.

Some descriptive terms can, however, become protectable trademarks through extensive use. Think of Best Buy, News Week and The Wall Street Journal. Those are all descriptive marks, yet they have become strong brand names. Turning a descriptive term into a protectable trademark can take many years and a big advertising budget! And some descriptive marks may never reach trademark status. Think about that for a minute. A company can use a descriptive term as its "mark" for many years to later discover that it has no trademark rights at all and even worse its competitors can freely use its mark! And even if descriptive marks do acquire trademark rights (i.e., McDonalds and TV Guide) those rights are limited. For example, competitors can still use trademarks consisting of descriptive terms in a descriptive sense. Take for example the case of Whirlpool’s “Whisper Quiet” trademark for dishwashers. Although Whirlpool can stop competitors from using the term Whisper Quiet as a trademark, it likely can't stop competitors from advertising that their own dishwashers are "whisper quiet” too.

The better approach to selecting brand names is to select names that are at least suggestive of the products or services. For example, Grey Hound for bus transportation services, Die Hard for batteries and Close Up for toothpaste. Other factors to consider when selecting a valuable brand name include whether the name is distinctive, meaning the mark is immediately protectable as a trademark, distinguishable from competitors’ marks, able to drive the positioning strategy and able to convey the attributes consumers want. It's also a good idea to select marks that are memorable, short and simple to understand, likeable and don't have translation issues.

There is no perfect science to selecting the "right" brand name. However, just be sure to consider how consumers perceive your product rather than how the company perceives the product, which can be the difference between a successful brand and a failure.

Brand Protection in Social Media Age

2009-10-03T09:01:00.000-07:00

The Internet is transforming the way in which companies communicate with customers. That transformation is accelerating at an astonishing pace as a result of social networking sites, such as Facebook®, Twitter® and MySpace®. More than ever consumers are sharing their experiences and opinions, good and bad, with global audiences on blogs, social networks and consumer review sites at the touch of a button. Those opinions have the potential for shaping, controlling and redefining advertising messages, not to mention companies' reputations. Most companies are still unaware of the existence or benefits of social media marketing. However, those that are aware have been caught off guard and unable to adapt to the speed at which social media marketing is revolutionizing the way in which companies communicate with customers and potential customers and the way in which consumers are voicing their opinions about companies and their products. Some social media experts believe that the day of the one-way message controlled by brand owners may – at least for now – be dying.

The ever-increasing number of social networking sites, blogs and customer review sites are making it difficult, if not seemingly impossible, for brand owners to manage their advertising message, reputation and intellectual property assets online. That difficulty will undoubtedly intensify as the number of participants of user-generated content sites explode to an estimated one billion by 2012. It is estimated that there will be four billion postings, known as "tweets," on Twitter in 2009 and forty billion in 2010. Clearly, the pace at which people are using social media networks to connect with friends and seek out online relationships with business is exploding, which is why some companies see social media as an opportunity to connect with consumers that they could not otherwise reach with traditional marketing efforts.

The question being asked by many social media experts is whether companies that have not already done so will embrace this potentially golden opportunity to reach tens of thousands, if not hundreds of thousands, of traditionally unattainable consumers with the strike of a computer key or be immobilized by fear. Much of the fear surrounding social media marketing stems from companies not understanding its intricacies. And although companies fear social media itself, as if were the "boogeyman" lurking in the shadows, they also fear doing nothing and missing opportunities while their competitors strike gold.

Other reasons companies fear social media marketing include losing control of the message and brand, return on time investment and the posting of negative comments or feedback by customers, employees and ex-employees. The truth of the matter is that whether or not companies use social media marketing, their customers may already be talking about them and their products. The problem: companies do not know what they are saying and therefore they are not able to dispel misinformation and inaccurate statements and thwart infringements of their intellectual property. Negative comments or misinformation left unchallenged become perception and that perception becomes reality for potential customers, resulting in lost revenues. Interestingly, just the other day, while on my Twitter account, one particular social media expert that I follow posted a "tweet" for her nearly 6000 followers that decried her customer service experience earlier that day at one of the largest office supply companies. Is that company listening? If so, kudos to it! If not, it might want to be. Yet in a more prominent case of a dissatisfied customer taking his frustration over dismal customer service to the social media-sphere is that of Halifax singer-songwriter Dave Carroll whose guitar had been severely damaged by United Airlines. It is reported that in the spring of 2008, Carroll and his band, Sons of Maxwell, were travelling for a tour when Carroll says he and his band members noticed United Airlines baggage handlers throwing their instruments on the tarmac in Chicago. He then later discovered that his $3,500 guitar had been damaged. After months of baggage claims and e-mails went nowhere, Carroll, in protest, wrote and posted a song on YouTube® about his ordeal, which went viral overnight and became a public relations nightmare for United Airlines.

In addition to being concerned about negative posts and commentary, companies must also be concerned with the unauthorized use and misuse of their intellectual property, including their trademarks. Unauthorized use and misuse of company trademarks cannot be ignored. Indeed, legal precedent requires trademark owners to police and enforce unauthorized uses of their trademarks or risk losing valuable trademark rights. So rather than putting their heads in the sand and waiting for the social media marketing "fad" to blow over, companies need to put their ears to the ground, listen, and join the conversation. At least then they can try to influence the message and conversations about them and their products.

Joining the conversation will allow companies to engage consumers directly and detect negative comments or misinformation and turn them into positive ones. And they just may find that they have brand champions that will defend their products. Joining the conversation also allows companies to monitor for certain infringements to its intellectual property, such as trademark infringement, trademark hijacking, counterfeiting and libelous speech, which can damage their goodwill and reputation. If their brands have been "hijacked," they need to know what messages the impersonators are spreading and what impact the impersonators are having on their brands.
One recently-reported high profile case involved Tony La Russa, the manager of the St. Louis Cardinals Major League baseball team, whose identity was hijacked on Twitter by an imposter. The suit filed in the Superior Court of California in San Francisco, which has since been dismissed, claimed that someone created an account under La Russa's name and posted "tweets," which gave the false impression that the comments came from La Russa. The suit also said that the comments were "derogatory and demeaning" and thus damaged La Russa's trademark rights. There have also been reports of corporate sabotage. For example, it was reported that a public relations firm allegedly set up a Twitter account in the name of a rival firm. The firm then allegedly disseminated malicious "tweets" for two months before the competing firm realized that its identity had been hijacked.

What is illustrated by the preceding examples is that one of the most basic steps that brand owners can take to minimize the risk of trademark infringement or hijacking on social media sites is registering their names. Before "jumping" into social media marketing, however, they should have a well-planned branding strategy. Experts do not recommend that companies "jump” into social media marketing because social media requires a well-designed strategy for it to be most effective.

Once brand owners have reserved their names, they should next institute a monitoring program to detect negative, inaccurate and misleading comments about them and intellectual property infringements. Although gaining complete control over all negative comments and unauthorized use of company intellectual property is not practical or feasible, a certain amount of control is achievable by monitoring social network sites on a regular and systematic basis.

A monitoring program can consist of a self-monitoring program, carried out by company employees or an independent monitoring service company. Before implementing a monitoring program, however, it is advisable to first decide what sort of content poses the greatest risk and what type of content can be ignored. Most companies should at least be concerned with the following types of content: trademark infringement, dilution, counterfeit sale of goods or services, defamatory speech, brand tarnishment, impersonation of company employees and false or misleading advertising. Companies should also consider which of the social network and user-generated content sites are most relevant to their industry and business. The more common sites to monitor include Facebook, Twitter, MySpace, YouTube, Wikipedia®, Second Life and other virtual worlds, eBay®, industry blogs and product and service review sites.

A self-monitoring program should include a weekly or monthly review of a number of available social media web sites. Alternatively, companies may decide to hire an outside company to monitor for negative comments and infringements. In addition to monitoring the applicable sites, monitoring service companies can also, if need be, rehabilitate a damaged brand, caused by negative comments, by developing new web pages featuring favorable commentary, which will push unflattering comments and web pages to the bottom of search engine result pages. Companies must be aware, however, that creating "false" and "misleading" positive reviews about their company, known as "astroturfting," may violate false adverting laws, which may trigger government action against the violating company. The service companies can also generate monthly reports that list negative comments made about companies during the previous month.

Once companies find activities that are damaging to their brands, they will need to consider the level of damage being caused, the nature of the activities and the company or individual(s) involved. If the activities are clearly intended to harm the brand, then swift and strong action is probably warranted. However, if the infringement is innocent or at least not intentional, a soft approach is likely the best strategy. The last thing any company wants is for the recipient of a strong cease and desist letter – who was innocently infringing the property – to post it on his or her blog and post negative commentary. A good approach is to review each "infringement" on a case-by-case basis.

Some companies realizing the importance of having a presence on social networking sites are discovering that someone has already registered their company and/or brand names on Facebook and Twitter, for example. What can these companies do? The first step is to review the site operator's terms of service to find out how trademark infringement and trademark hijacking cases are handled by that service provider and then file a complaint. If the complaining party does not obtain a favorable result from the site owner, what then? Are there current laws, at least in the U.S., that would remedy the on-going infringement?

Presently, there is uncertainty as to whether current trademark laws are designed to sufficiently address the numerous trademark issues presented by social networking sites. The problem with current U.S. laws is that they tend to cover infringement of second-level domain names. Second-level domain names appear in the Web address immediately preceding the top-level domain, such as www.facebook.com. This enables McDonalds to use the existing U.S. trademark laws against a cyber squatter who registers www.mcdonalds.com. On both Facebook and Twitter, however, users have the ability to select personalized "user names," not "domain names," which appear as part of the URL or web address, but not part of the domain name (i.e., facebook.com/username). Unless the site owner, i.e., Twitter or Facebook, is agreeable to removing an infringing username from its service after receiving a complaint or a "squatter" is agreeable to relinquishing control of the infringing username to the rightful trademark owner, the trademark owner may have no choice but to file suit against the infringing party in court based upon traditional trademark infringement principles.

In an effort to minimize the risks of trademark hijacking, trademark infringement and damage to brand reputation that may occur on social media networking sites, it is advisable to take precautionary and proactive steps. Those steps include reserving company names and key permutations of company names with social networking sites, developing a presence in social networking communities, assigning company employees that are responsible for overseeing the monitoring process, understanding terms of use for each of the major social networks and develop consistent enforcement procedures.

The advent of social networking and user-generated content sites has given companies a myriad of new opportunities to promote their brands that were not previously available with traditional media. However, those opportunities have also created new challenges for managing company brands. Those challenges will likely require companies to institute consistent enforcement programs, which should include taking swift action when misuse of company brands are detected. The development of an enforcement program, and commitment to systematically monitor for potentially damaging activities, can go a long way toward making sure that online social networking sites remain free of content that is damaging to company brands.

New Fraud Standard Set for US Trademark Office Practice

2009-09-27T13:57:00.000-07:00

On August 31, 2009, the U.S. Court of Appeals for the Federal Circuit (“CAFC”) reversed the U.S. Trademark Trial and Appeal Board's (the “Board”) recent decision in Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (TTAB 2007). Read here: Bose Decision. In 2001, the Board held that Bose Corporation had committed fraud in its renewal application for its U.S. trademark registration. Accordingly, the Board cancelled Bose’s trademark registration.

In its decision, the CAFC ruled that "[b]y equating 'should have known' with a subjective intent," the Board had "erroneously lowered the fraud standard to a simple negligence standard." The CAFC found no evidence that Bose intended to deceive the USPTO in its renewal application and it therefore reversed the Board’s decision.

The Bose ruling will likely have a dramatic impact on the future of fraud claims in trademark opposition and cancellation proceedings at the Board. Since the Board laid down the “should have known” standard for committing fraud on the Office, there has been an explosion of fraud claims in opposition and cancellation actions, which were generally used to gain leverage over the opposing party for negotiation purposes. The CAFC’s ruling for a more stringent “willful intent” standard will likely impact the success of fraud claims and the frequency of their use in Board proceedings. Applicants should, however, still use care when asserting use – or the bona fide intent to use – a mark in commerce in an application, statement of use and maintenance filings.

Trademark Counterfeiting Epidemic Hits U.S. Shores

2009-09-21T19:11:00.000-07:00

Trademark counterfeiting is an ongoing threat to the success of businesses around the world. It is estimated that counterfeiting costs the U.S. economy $200 billion to $250 billion per year, with Internet counterfeiting alone costing the U.S. economy $137 billion in 2008. Experts anticipate that those figures will increase this year and will likely continue to do so for the foreseeable future. The adverse effects of pirated goods are directly felt by U.S. companies, consumers and employees in lost revenues, higher prices and lost jobs.

U.S. Customs and Border Protection (CBP) officials recently reported a year-over-year increase of nearly 40 percent in seized counterfeit goods in terms of value and a nearly 10 percent increase in the number of seizures. Counterfeit goods seized range from electrical articles bearing false "Underwriter's Laboratory" labels to items such as DVDs, automobile parts, household products, software, computers, technology components, footwear, food, pharmaceuticals, toys and other goods that may endanger the health and safety of the American public.

As the world economy weakens and global competition increases, counterfeiting continues to be a major concern for many industries. Businesses of all sizes should consider whether it makes business sense to implement an intellectual property enforcement program aimed at detecting and deterring counterfeiting that directly affects them. Such an enforcement program should include, at a minimum, periodic monitoring of the Internet, including social media networks; sending cease-and-desist letters to known counterfeiters as a preliminary step in the litigation process; retaining the assistance of counterfeit investigation companies, if necessary; and securing U.S. trademark and/or copyright protection and recording those rights with the CBP. Businesses should also consider securing trademark protection in foreign countries or jurisdictions in which they conduct business and, if available, seeking border assistance from foreign customs agencies.

One simple and cost-effective component of an anti-counterfeit enforcement program is the recordation of a company's trademarks, copyrights and trade names with the CBP. Once those intellectual property rights are recorded, CBP officers monitor imports to prevent the importation of products bearing infringing trademarks, copyrights and business names.

To be eligible for recordation with the CBP, a trademark must first be registered on the Principal Register of the United States Patent and Trademark Office (USPTO) and a copyright must first be registered with the United States Copyright Office. With respect to trade names, a trade name is eligible for recordation only after the name has been in use for six months.

A trademark owner interested in seeking recordation with the CBP must first submit an application for recordation. Each application must be submitted electronically and must include certain information, including the name and address of the trademark owner, the places of manufacture of the goods bearing the recorded trademark and the identity of parent or subsidiary companies under common control or ownership that may also use the recorded trademark. The application must also be accompanied by a fee of $190 for each trademark to be recorded. If the trademark registration covers more than one international class of goods, and the trademark owner seeks border protection for more than one class of goods, the recordation fee is $190 for each class of goods for which the trademark owner seeks protection. For example, to secure recordation of a registered trademark for three international classes of goods, a fee of $570 must accompany the application.

If the application is approved, the recordation is entered into the Intellectual Property Rights database, a centralized recording system that is accessible by CBP field offices. Once the information is entered into the database, CBP officers begin to monitor imports for counterfeit goods and seize those detected goods that improperly bear the trademark owner's mark. If CBP officers seize goods that infringe an owner's trademark, they must provide the trademark owner with specific information, including the date of importation, the port of entry, a description of the goods and the name and address of the importer.

Recordation of a trademark will remain in force with the CBP concurrently with the term of the U.S. trademark registration. When the trademark registration is renewed with the USPTO, the owner should also renew its recordation with the CBP. A trademark owner must submit a renewal application with the CBP no later than three months after the expiration date of the underlying trademark registration. The fee for renewal is $80 per international class of goods. If the trademark owner fails to renew its CBP application, the owner will be required re-file for recordation.

The CBP recordation process for copyrights is essentially the same as for trademarks; however, the duration of the recordation for copyrights is 20 years, unless the copyright expires before that time.

A trade name must first be published in the Federal Register and Customs Bulletin before the recordation becomes final. Notice is published to give any interested parties an opportunity to oppose the recordation of the trade name. Once the opposition period ends, the CBP will then publish a final notice of approval or disapproval in the Federal Register and Customs Bulletin.

Companies that own federal trademark and/or copyright registrations or that have used their trade names for at least six months should consider whether it makes business sense to record their intellectual property rights with the CBP as part of a comprehensive intellectual property enforcement program. Doing so can be more effective and less expensive than taking enforcement action after infringing products have entered the U.S. commerce system.