Trademarks – Intellectual Property Perspectives

Advantages of a UDRP Domain Name Proceeding

Trademark and Domain Names

A business can spend a lot of time, capital, energy in building rights in a trademark and the associated goodwill with the public. It can be devastating when a third party registers a domain name and operates a website incorporating a confusingly similar name to that of the valuable trademark. The detriment to the business can be significant. For example, the third party website may sell a competing product, causing loss of income to the business. In a more unsavory scenario, the third party may operate an adult oriented website under the confusingly similar name, damaging the brand equity of the right holder.

Options Against Unlawful Third Party Domain Name Holders

The primary options for consideration against the third party include:

Initiating a lawsuit
Initiating a UDRP domain name proceeding; and/or
Online content approaches to outrank or “bury” the competing website.

The business should note that each of these options is not exclusive and more than one option might be suitable for a given situation.

Generally comparing the two proceeding-based options, a lawsuit might include claims of trademark infringement and cybersquatting. The defendant domain name holder would be located and served, discovery (exchange of evidence), and a trial, all under the rules of civil procedure. This can take significant time, capital, and energy. The notable advantage of a lawsuit is that the possible remedies include injunctions and monetary damages, which a business may need to seek in some circumstances. Contrasting a lawsuit with a domain name proceeding, a domain name proceeding is almost always faster, cheaper, and less complex. A domain name proceeding is typically resolved in less than two months. This speed must be balanced with the possible remedies. The remedies in a domain name proceeding are limiting to cancellation or transfer of the domain name. This “cost” might be palatable or welcome, especially where a defendant is difficult to locate or loss of income due to the suspect domain name is leading to red ink.

UDRP Domain Name Proceeding Elements – Proving the Case

The Uniform Domain Name Dispute Resolution Policy (UDRP) is an online procedure for resolving complaints made by trademark owners about domain names. It is a mandatory administrative proceeding arising out of the registration agreement accepted during the domain name purchase process of .com, .biz, .info, .org, and .net domain names.

The trademark owner must prove three elements in the proceeding in order to prevail over the domain name holder:

the business has a trademark right and the domain name at issue is identical or confusingly similar to that mark;
the third party has no right or legitimate interest in the registered domain name; and
the third party registered and used the domain name in bad faith.

Take the above elements to heart. Commonly, businesses incorrectly think that their trademark rights include the right to terminate any third party’s registration of any domain name for any purpose. This fails to account for the second and third elements. A third party in an unrelated industry may register a seemingly “confusingly similar” domain name without violation of the rules. A second, common mistake involves the apparent simplicity of the proceeding. Because the rules of evidence of a courtroom aren’t followed, business often conflate the informality of evidence with the strength of evidence. Strong evidence establishing each of the above elements should be proffered in order to convince the panelists and prevail. After all, the goal is to preserve the goodwill and, in turn, the income and equity potential arising from the trademark.

3 Key Terms of a Software License

Who owns your software?

If your company has developed software, it should create a software license prior to distribution of that software. A software license is the key instrument that defines the rights in ownership, usage, and distribution of software between the company and user(s). Developers seek to protect rights in the product developed with their time, money, and staff. Users want to know what is being licensed and whether that license will meet their needs. A software license should be employed in enterprise software, consumer software, “cloud” software, customized software, and even in “open source” software contexts (it is a misnomer that if one desires software to be open source, that the company needs only to forego a software license). Failure to draft a carefully considered software license can lead to loss of ownership of key aspects of the software, loss of control of the business model, bad publicity, and other consequences. There are many options to think about for a software license but three key terms include:

Scope of Use – This element of the software license states the permitted and prohibited uses of the software. A license may, for example, limit the use of the software to the licensee’s own internal use or primary business activity. Such a restriction may support the licensor’s business model or effectively be required by law. For example, in credit card processing software, the software provider may also be providing related services and would seek to limit the uses of the software so that the licensee does not deprive it of revenue opportunities from those third parties. Additionally, the credit card processor may not be able to fulfill IRS reporting obligations if the user processes credit card transactions for third parties.

Intellectual Property – Since you’re reading an intellectual property blog, you probably knew this issue should be addressed. However, this issue should not be overlooked or oversimplified. Innovation in software can invoke multiple areas of intellectual property law and contract law, including patent law, trademark law, copyright law, and trade secret principles. Where software patents exist, notice of the patents should be provided. Copyright almost always exists in software, thus it should be addressed. Furthermore, the intellectual property clauses should not be oversimplified. For example, the intellectual property rights may not be as simple as “Developer owns all right, title, and interest in Software… we own it all, you can’t use it, the end…” Unreasonable restrictions on use of the software may lead to a backlash, lot revenue, or just may not fit the company business model. The intellectual property clauses may be more nuanced due to contemporary business models and social media influence, where the users may make substantial contributions. For example, use of the “Android” name and logo (ie trademarks) by third party developers is advantageous to the Android Market ecosystem. Likewise, the prolific placement of Twitter and LinkedIn logos on third parties websites promotes the use of the Twitter and LinkedIn systems, respectively.

Rights in User Data – Some user data is mission critical. For example, customer relationship management (CRM) can be the lifeblood of a business. Judging by some of the posts on Twitter, other user created data may not be so critical. In light of the software, the business model, and customer profiles, the software license should address the licensor’s and licensee’s rights in user data. This may include user created data, data about the user, or information generated about the user from the user environment. For CRM software on an in-house workstation and servers, where the business model is that the enterprise pays for the software, the license may state that the licensee has complete ownership of the user data and the licensor has no rights in the user data. For a mapping application, the license may state that the mapping company has complete ownership, including the right to redistribute user supplied corrections.

Older language and terms may not apply to the current environment, so a company should periodically review the software licenses. Newer paradigms such as software as a service, virtualization, and multi-core processors have changed the software landscape and thus may lead to ambiguity or undesired results from an existing license.

The above terms are just three terms among many for consideration for inclusion in a software license, so do your research for your specific software and situation.

Trademark Protection and Control in Technology Matters

Two Advantages of Monitoring Use of Your Trademarks

You’ve probably read about the recent dispute between Best Buy, owner of the “Geek Squad” trademarks, and Father Luke Strand of Holy Family Catholic Church, (former?) owner of a VW Beetle adorned with a “God Squad” logo. One of the ways that Best Buy uses the Geek Squad trademark is in a logo form on VW Beetles. Best Buy became aware of Father Strand’s use and contacted him and requested that he stop using his logo, alleging trademark violations.

After usage or registration of a trademark, startups and small businesses tend to focus solely on building the goodwill associated with the trademark. After all, that is the main point of the trademark, right? Unfortunately, with the rights come some responsibilities. One of those responsibilities should include monitoring the use of the trademark. Monitoring is primarily to detect infringement and detect improper usage of the mark. For emerging businesses, two key advantages of monitoring a trademark’s use include:

1. Decreased potential for infringement, lawsuit, and damages

Early notice of another party’s use of a mark in a confusingly similar manner gives both parties more viable solutions to the problem. The potential for adversity is less, as the potential infringing party has less of a time, money, and emotional investment in use of the mark. For example, tech maven Gina Trapani was in the early stages of working on an application formerly named “Think Tank” when another company alerted her to their prior use. The other company cordially approached her and the “Think Tank” application became the “Think Up” application. According to Gina Trapani (This Week In Google Podcast at 70:15), the situation was amicably resolved. The situation was resolved before two “Think Tank” apps were released to the market, end users were confused, and marketing budgets were spent. Because the second “Think Tank app” had not been released, infringement may not have occurred. And if there was infringement, the damages were minimized.

2. The scope and validity of the trademark is maintained

A trademark can be invalidated by becoming “generic.” A popular example is when the “Aspirin” trademark became generic. Consumers used “Aspirin” to refer to any analgesic and the mark lost its function as a source indicator, thus it was eventually invalidated. In the Geek Squad situation, Best Buy currently has a certain scope of protection in the “Geek Squad” mark. Because Best Buy has spent time and money using the mark, a typical consumer can easily recognize the logo. Father Strand apparently is/was using a similar mark, thus slightly chipping away at Best Buy’s scope of protection. Suppose over the course of several years several other parties start using a similar logo with “Greek Squad,” “Great Squad,” “Geek Pod,” and “Geek God,” text. All of those uses further erode Best Buy’s scope of protection. Then if Best Buy decides to assert infringement claims against later parties, United States trademark law limits the scope of protection of the “Geek Squad” mark. For that reason, it is in Best Buy’s interest to act early. Similarly, monitoring the usage of a mark can alert a trademark holder of improper usage so it can act to prevent the undesired results.

The ways in a trademark may be monitored vary from the free and simple to more costly and thorough. Simple low cost approaches to monitor a might be services such Google Alerts, which monitor the publicly available internet. A more costly, thorough approach can include additional sources such as trademark filings, domain name registrations, industry periodicals, and other sources. This may be done manually or via the services of a trademark attorney or trademark monitoring company.

Startup Myth – First Come First Served for Domain Names

Frequently I encounter businesses seeking to protect a brand name. In discussing the actions taken to date taken, owners frequently state that they have registered the domain name corresponding to the desired brand name. Frequently, they believe that their name is “reserved” or protected because they have already successfully reserved the domain name. It is also often stated that because they were the first registrant of the domain name that they may do as they please with the domain name. Two common incorrect beliefs include that one is entitled to operate a website with the domain name or freely sell the domain name. This is often not the case. Just because one registers a domain first does not mean that the domain name can be lawfully used or sold. Not only does merely registering a domain name frequently confer only limited rights in the domain name or the underlying name, it is also possible that use of the registered domain name may lead to negative consequences.

The most known scenario is where one registers a domain name which is substantially a name in which another party has rights. If I (somehow) was the first registrant and operator of ibm.com, it would not be of much value. Ignoring the .com domain suffix, the relevant part of the domain name just contains the “IBM” trademark. Most people understand and agree that there could be trouble in this scenario, as IBM is a household name. However, most domain name registrants don’t realize that this scenario can occur with lesser known brand names as well. So being the first to register a lesser known domain name may place one in the same questionable situation.

A lesser known scenario is where one registers and uses a name which is similar to the name in which another party has rights. If I sought to register ibmsoftwaresolutions.com, my status as the first registrant of the domain name is again not very helpful in establishing rights in a “IBM software solutions” brand name nor in operating a similarly named website. Again this may not seem surprising using the IBM name as the context. However, as above, this scenario can occur with lesser known brand names as well.

There are times when registering a domain name may be helpful in establishing some level of rights, but being the first to register a domain name does not automatically lead to superior rights in the domain name or in the words contained in the domain name. Use of that domain name or attempted sale of the domain name can lead to loss of goodwill in the name, cease and desist letters, domain name arbitration, trademark actions, or anticybersquatting protection act claims, among possible consequences.

Top Startup Trademark Mistake – Failure to Research and Protect the Business Name

For emerging businesses, the business name is often synonymous to its branding. The business name may be used in the first product name, domain name, and advertising. A lot of time, money, and thought can be expended while creating that business name and building goodwill in it. An often overlooked aspect of this process is researching and protecting the business name when it is desirable to do so. Inexperienced business owners frequently believe that because they have formed a corporation, limited liability company, or filed an assumed name certificate with that new name that they are lawfully permitted to use the new name in their branding and that the new name is protected from use by others. This is an incorrect belief and may lead to problems in the future.

One reason why the belief is incorrect is that the standards and requirements for a state permitting a business name to be used are different than the standards for granting a trademark registration. A business may be formed for tax, legal, securities, or other many other non-branding purposes. A business name used for those purposes is not used for branding and not generally publicized and warrants a lower standard in registering that business name. Contrast that scenario with a business name which is explicitly used in advertising and in connection with sales of goods and services to consumers. To illustrate, most of the flying public thinks of American Airlines as a source for travel. However, AMR Corporation, a holding company for American Airlines is not generally recognized by the flying public.

A second reason why the belief is incorrect is that business names, product names, and other sources of brand names are not centrally stored. Brand names can be located in many different registries, or even be unregistered. Today, businesses can more easily reach out to consumers across the country (or world) thanks to the internet. A common example affecting startups is where an internet based business incorporates in one state and focuses its branding efforts in a different state. Thus, a business may incorporate in Delaware and focus its initial branding activity in Kansas. A second startup may later organize in Kansas with a similar name and product. Each business would likely have no problem registering in the respective states. In this case, there may eventually be a clash between the two companies. One of the businesses may be forced to changes its branding and/or compensate the other business for the damage to that business’ brand. For a business with limited funding, this could be a business ending mistake.

In closing, it may be prudent to perform a detailed search, submit a trademark application, and use the new business name. Such action can minimize the chances of unlawfully using another entity’s brand name and increase protection for one’s own brand name.

Advantages of Trademark Registration for Startups

Recently I had a discussion with a business who had been using a trademark since about 2004. Unfortunately, it had not registered the trademark. In the meantime, another business had started using a similar version of the mark and also had substantially completed the registration process. Thus the business was in a difficult situation. Sure, the business probably had superior rights. But asserting those rights could be costly and time-consuming. If negotiations with the other company aren’t successful, some sort of proceedings may be necessary to assert rights in the trademark. GULP!

This situation leads to some lessons on the advantage of registering a trademark for a new business.

The trademark registration is used by the trademark office against other applicants for registration – This advantage is often overlooked because the trademark owner usually doesn’t know when this happens. In some cases, a different startup performs a search before it use the trademark and sees the existing similar trademark registration. It then uses a different mark. In the case where no search is performed, the existence of a registered trademark will serve as a barrier to a second comer’s trademark application when the trademark office performs its search. In both cases, the advantage was achieved at no more cost than the registration itself. Going back to our first business, had the business registered its mark in 2004, the possibility of a proceeding to assert its ownership may not be lingering.

Presumption of validity – Upon successful completion of the registration process, the registrant has the presumption of validity of the trademark in proceedings. Effectively, that means that the burden is placed on a challenger to show that the trademark is invalid. Thus, if the first business can’t find records and/or other evidence to show that its used the mark in 2004 (before the other party), it loses.

Public access – A registered trademark (and its owner) is published by the trademark office for the world to see. Because of this, the “he said, she said” scenarios are minimized. Thus instead of a proceeding, a trademark owner may choose to send a takedown notice directly to the host requesting removal of the infringing material. The host is in a difficult situation when two strangers each claim ownership of the mark. The published trademark registration showing the owner makes it easier for a host to decide remove infringing material.

Each of the above advantages enhances the ability of a startup to protect its brand.

Trademarks and Infringement Concerns for Startups

Recently a suit was filed against Microsoft based on the name of its Bing search engine for trademark infringement and other bases. The complaint was recently filed, so a lot of information is not yet available. However, useful information for trademark and brand planning for startups can be gleaned from the news articles, court filings, and USPTO records, and company websites.

http://www.cio.com/article/511289/Design_Company_Bing_Sues_Microsoft_Over_Trademark?source=rss_news

The complainant, Bing Information Design, calls itself a design firm on its website. It’s trademark application states that “Bing!” has been used in connection with services including, in part, advertising and design services, advertising via the internet, and promoting the goods and services of others. Microsoft’s trademark application seeks to use “Bing” in connection with advertising services, dissemination of advertising for others via the Internet, promoting the goods and services of others, and other products/services. The “Bing” and “Bing!” marks are similar and the services seem to overlap. There are multitude of other factors in determining trademark infringement, but at first glance the lawsuit does not seem baseless, even if the court holds that Microsoft did not infringe Bing Information Design’s mark.

It is hard to say what will be the outcome of the lawsuit based on the current (and future) information. However, from a startup’s perspective (or others launching a brand name), this article should highlight a couple of issues:

Before launching a brand name, perform as thorough a search as possible. Proactively searching can minimize later problems. It is usually preferable to know about a similar mark before spending time and money creating the goodwill associated with a mark. Also, Bing Information Design had not applied to register the “Bing!” mark and had not registered bing.com, thus a brief level search may not have located its presence.
Be open to multiple possible brand names. Microsoft has stated that its believes the lawsuit is without merit and that it does not believe there is any confusion in the marketplace. However, assume for a moment that a startup (with a smaller budget than Microsoft) is seeking to use “Bing” as a mark in connection with a search engine that generates revenue from advertising. And assume further that the startup knows of another company using the name “Bing” in connection with providing advertising services. Even though it is an ambiguous situation, it may be prudent to uses a different mark. Microsoft would surely survive such a situation, but that startup may not be able to survive the lost employee time and money involved in a potential lawsuit.

Trademarks – An Overview of the Registration Process

Frequently, the owner of those rights may choose to seek the advantages of registering the trademark. Typical steps involved in the registration process include:

performing a search
2.

preparing and submitting the trademark application
3.

and responding to issues raised by the trademark office

Frequently, the owner of those rights may choose to seek the advantages of registering the trademark. Typical steps involved in the registration process include:

performing a search
preparing and submitting the trademark application
and responding to issues raised by the trademark office

During the process of creating trademarks, such as brand names or logos, an optional search may be initiated. A search based on your potential trademark is performed to minimize the chances of using a mark that is the same or similar to one already in use. If a similar mark is located, it may be prudent to create a different brand name or logo rather than proceed with that brand name in business or in a trademark application. The search can locate other possibly confusingly similar trademarks, as well as reducing other issues in the trademark registration process. The sources searched can vary, but may include trademark registries, company filings, company directories, product databases, trade journals or other sources.

After the search report is reviewed, an application may be submitted to the appropriate trademark office(s). In order to draft the trademark application, information on the mark will be gathered and analyzed. Some information under consideration will be a sample of the mark itself, how and where the mark is being used, who will own the rights in the mark, and evidence of use of the mark. This information will be used to draft and submit a trademark application.

In time, the trademark office will review the submitted trademark application. The trademark office will perform its own trademark search, as well as review the application for other compliance issues. Common issues raised by the trademark offices include:

likelihood of confusion with other trademarks
descriptive marks
generic marks
merely ornamental marks

The applicant needs to address the issues raised in the trademark application. If successful in addressing those issues, the applicant’s mark will be published for opposition, where parties with standing may oppose the application. If there is no opposition, the mark will be registered.