Have you been to a Burger King restaurant in Mattoon, Illinois? I mean the other Burger King restaurant. There is a restaurant called Burger King, which has nothing to do with Burger King franchise.
While there’s innovative product like iPhone, most new products are improved versions of old products.
Patent protects both.
It really doesn’t matter whether your invention makes people’s lives better or not.
For example, there is a famous case of a “fake juice dispenser”. The dispenser by its appearance has a tank that contains liquid juice. But inside, the dispenser has a water tank and a juice powder container as well as a mixing mechanism, all hidden from the plain view. The design enables the juice seller to use powdered juice concentrate that has a longer shelf life while appealing to customers who like the freshness of liquid juice.
Long story short, the dispenser got patent protection.
Patent is often the only way to curb competition.
Patent is a strong legal right. It grants you government-sanctioned monopoly, though for a limited time, over a thing or a way to do something. And moreover it can raise a high bar blocking others from encroaching on your market.
Let’s say you invented a method in which you make a sandwich while wearing a thimble, and this way, you can make your sandwich miraculously delicious.
Now, if there is no known method or record in which you make a sandwich using a thimble, you can probably get that method patented. I know it’s far-fetched; someone probably made a sandwich or two while wearing a thimble in the past. Nonetheless, if nobody did, this invention is quite innovative, right? It’s certainly not an improvement of traditional sandwich recipes.
Now, for 20 years, nobody can make sandwich with a thimble without your permission. How does this work in a real life? Well, as soon as people learn about this (getting a patent means your method is no longer a secret), they will start making sandwiches with a thimble at home, and there is no way you can monitor everyone’s kitchen to enforce your right. Nonetheless, if it’s a sandwich shop, you can probably do something about it. And more importantly, you will have monopoly on thimbles for sandwich-making because anyone who markets a thimble for sandwich-making will indirectly infringe your patent.
Then, competitors will try to design around your method. If the thimbles work because of certain physical attributes, there could be other ways to achieve similar effect. That involves reverse-engineering and some research effort. After all, they might come up with a better way.
To prevent this, you want to keep inventing or improving your method. By keep inventing, I mean you should try to patent new ways to make sandwiches. On the other hand, if there is improvement, you should consider patenting the improvement as well. When you have so many ways to make sandwiches patented, then your competitors will feel like it’s easier to just pay you licensing fees or just leave the market. Improvement on your old invention makes other alternatives less efficient and thus less appealing.
Two lessons from the above hypothetical.
Your invention needs not be new. A thimble? I definitely remember seeing my grandma using it. There’s always a way to patent (and thus protect) your thing.
You need to keep inventing or improving. Stay forward-looking. Unless you keep working on it, others will find a way to circumvent it.
There is often a grey area between innovation and imitation when it comes to a highly competitive industry. Nevertheless, you often hear about patent infringement lawsuits and trademark disputes.
Especially in the U.S., lawsuits and other legal disputes are a serious problem for business owners. If you once get served with a complaint, you cannot simply ignore it because your failure to respond will result in default judgment against you. And attorney’s fees that easily go around a thousand of dollars an hour will make you dizzy. As it happens, most accused companies end up settling rather than challenging the allegation of wrongdoing.
There goes potential unfairness. As to intellectual property lawsuits, many business owners lack relevant experience and knowledge, so there are cases where an accuser wields a bogus patent or trademark to threaten a business in bad faith. There are reports of entities that strategically acquire a failing or bankrupt company, obtain its intellectual property rights, and sue a bunch of other companies in the same field to score settlements with a sheer threat of lawsuits.
Of course, not every claim is without merit. Sometimes, you can unknowingly infringe other people’s right. Occasionally, you have to push forward to make profit despite a possible lawsuit that ensues. Nevertheless, it is important to fully evaluate the seriousness of the outcome.
Well, you can possibly avoid a serious problem with a tad bit of caution. You first ought to know what are protected under the intellectual property law.
Simply put, patent protects “idea”, copyright “expression”, and trademark “goodwill”.
1. Patent
We are talking about utility patent here, which is commonly known as patent. It protects an invention, which is to say protecting “a new idea that did not exist before”. Not all new idea is protected because doing so would seriously deter a free competition in the market. Therefore, a grant of patent happened only after a set of strict requirements is met, the toughest among which is that the idea should be “not obvious”.
In other words, an idea that is within an ordinary practice of a person who is skilled in the field is not considered a patentable idea. Consequently, a simple combination of parts that already exist or a straightforward application of known principle will not produce a patent. For example, making of a hybrid automobile, which involves simply adding an electrical motor to an automobile, would not deserve the protection of patent law.
Now the question to ask yourself as to patent law is if your new product is based on ” an ordinary practice” or “a step ahead it”.
2. Copyright
As mentioned
above, copyright protects “expression”. Here, expression
implies that it can be recorded in writings, pictures, sounds, or
videos. Only such things that can be recorded, i.e. expressions, can
be protected under the copyright law.
To illustrate, let’s say a company achieved a great success by using a picture of a cat on their product label. Another company can simply copy the idea of a cat label without infringing any copyrights if the company uses a different picture of a cat. The idea of using a cat picture in packaging should be protected by applying for a patent. (Of course, there is nothing new about the idea of using a cat picture in marketing, so a patent grant is unlikely. Instead, you should rely on the trademark law.)
Copyright disputes can occur with regard to phrases used in marketing. Normally, short and common combination of ordinary words are not protected by copyright, but if you copy an entire phrase of another’s headlines in the promotional materials, there can be a problem. To avoid copyright disputes, you can paraphrase. For example, a catchphrase, “what you must bring to your second marriageโ, may be protected by the copyright law, but you can simply use a different phrase with a similar meaning such as “you should bring this if you ever marry again”.
Now the question you must ask yourself is “if thereโs a virtually identical expression”.
3. Trademark
The last one is trademark. In fact, the above hypothetical case of a cat printed product has a trademark issue. If a company starts to use a cat on its product label and consumers starts to associate a cat label with the company, then it can be said there is a goodwill attached to the use of cat on label. That is, consumers start to prefer a product with a photo of a cat on the product because of past experience. As such, you cannot avoid the trademark infringement even if you use a different photo of a different cat photographed by a different person.
To consumers,
it’s all the same cat label. And in this case, the cat photo is a
trademark. So, you need to remember that not just brand names or
logos are trademarks. There is a caveat in trademark protection. The
existence of goodwill is very subjective and hard to prove.
Therefore, it is a common business practice to register a trademark
with the United States Patent and Trademark Office (USPTO).
Now, the question to ask yourself is if “your brand name/logo is registered with the USPTO”.
Most clients come to me after their products reached the market. In fact, that’s when you know for sure that your product has the potential to be something. If not, why invest in registering trademark?
On the other hand, most big companies register their intent-to-use (“ITU”) marks months before they actually develop or start selling an item. Why? It’s simply much safer to invest their money into marketing and so on once you know that nobody else has or can have a trademark registration on your potential mark.
Does this mean you also need to act fast? Probably not. Simply put, many new products or services eventually fail. This is not because of some poor planning or lack of insight but because of the nature of the market.
Then, when is the right time to register a trademark? The answer depends on the type of your mark.
Is it your company name?
Maybe you intend to use a certain mark for every single product you would produce in the future. This is sometimes called a Parent Brand. For example, under parent brand Apple there are sub-brands such as iPhone, Mac, and iPad. But everything is still Apple. Well, in this case, what are you waiting for? Go ahead and register unless you’re counting days for the demise of your company.
Is it a logo?
Now you be cautious. Once you register a mark, you can’t change the registered mark. This includes minor changes and renewals that most companies eventually do on their logos. It might be a slight change of color, or it could be a modernization of some characters or graphic. The law is clear: no change is allowed.
Hence, if your logos are still in development, I’d suggest you to wait till you have the final version. Nonetheless, there is some benefit from acting fast. If you have a logo registered, other people are stopped from registering similar logos. In other words, you would claim the priority, and priority is always good.
I suggest you act fast if you’re concerned that someone else might be taking your idea or concept of a logo. If the current version of your logo includes all elements that you consider important, registering it would give you priority for those elements.
On the other hand, if your logo is pretty unique and unlikely anyone else would be interested, then don’t hurry into registering a draft in order to avoid incurring unnecessary cost.
Is it a phrase or a combination of words?
Now, this is a business decision. Think about how valuable your trademark would become in months or even years. There is possibility that you might not be using the phrase or words ever. Do you still want to take the risk of spending your money for a trademark certificate, which can become a piece of paper if things go the wrong way?
Is it a made-up word?
This is a real advice you would get it from this article. You go ahead and register a domain name YOUR_TRADEMARK.com. Sure, domain names are the same as trademark registration. On the other hand, it costs only $12 a year. Trademark application on the other hand costs you $250 (after discount for doing everything including filing and amending your application on TEAS) just for application fees alone.
I’m not saying domain names can somehow replace trademark protection. However, it just makes economic sense to get a domain registered first and then think about getting trademark registered later.
This article contains
fictional scenarios that include facts and legal issues that are created for an
explanatory purpose. Any of those facts and legal issues including legal
conclusions may not be true when applied to your case. Please seek a legal advice
or counsel if you need any help.
In past articles, we discussed how to name your products and register the names with respect to a trademark protection.
To briefly summarize, we discussed the followings.
1. Most of all, you need a good name for a trademark.
Avoid any name that is similar to competitor’s.
Do not use a generic name that is commonly used in the industry.
If possible, you try minting a term that describes your product.
2. If you anticipate a possible trademark infringement,
registration is a must.
Search the internet using internet search engines like Google for any taken names out there.
You can also use USPTO’s Trademark Electronic Application System to register your trademark by yourself.
Don’t forget to pay maintenance fees once every 10 years.
Let’s see how it works out in the business environment.
1. Antique Metal Zig-zag Hair Band
Mike has been in the beauty supply industry for 15
years. He experienced sales and retail management to a good extent, so he is
good at forecasting consumer trends and popularity of new items.
He realized at some point that zig-zag hair band is a
next it-item for 2018. He did some research and found out zig-zag hair bands
available in the market are mostly made of plastic. Based on this, he came up
with a premium zig-zag hair band with oil-rubbed bronze finish.
He had a Chinese supplier mass-produce the product and
has been receiving increasing number of orders for the product, which he named
โAntique Metal Zig-zag Hair Bandโ. It is about to become a huge success, and
then he finds out a wholesale is selling โAntiquityโ Metal Zig-zag Hair Band,
replacing Antique with Antiquity, with basically an identical product as they
are produced in the same manufacturing line.
Q: How expensive would a lawsuit be?
A: It will be decided by hours. In certain areas of the law,
attorneys offer a legal service for a contingency fee, but trademark
infringement is not one of those special circumstances. The legal bill will be
largely dependent upon the hours your attorney spends for a lawsuit including
following up court proceedings, negotiate with your opponents, and so on.
Q: How long does it take to get an injunction?
A: This is a non-registered trademark, so you will first
prove that you own the trademark. This involves whether the opponent have used
the trademark prior to your use, among other things. Later on, it will
ultimately come to a finding of likelihood of confusion among consumers
regarding two trademarks. Another difficulty in this situation is that you
cannot claim an exclusive use of the โMetal Zig-zag Hair Bandโ. Even an
exclusive use of “antique” can be contested at court. As there are
many legal issues, legal actions may cost you more than thousands of dollars.
Q: How likely we prevail?
A: The knockoff at issue has not only a similar name but
also an identical packaging, color, style, and so on. As long as we can prove
that we have priority (e.g. we used it first), we will likely prevail.
2. Bear Tooth Hair Band
Mr. Lee has entered the field of beauty supply at his
late career, but his previous job at a retail service company made him aware of
the importance of trademark.
Just like Mr. Kim, he also foresaw a zig-zag hair band
trend this fall and had “Bear Tooth” trademark registered with the
USPTO via an Intend-To-Use Application. He thought the crooked shape of bear
tooth would suggest a zig-zag shape of a hair band. He had no idea what
material to be used, but later he noticed that Antique’s oil-rubbed bronze
finish products are received very fairly in the retailers. He placed an order from
a Chinese supplier.
The product was only launched in July, but in a few months,
customers started looking for “bear tooth hair band” since the name
was very catchy. Not long after, people started to call any zig-zag hair band
made of metal “bear tooth”. In turn, many retail stores are
displaying and selling Antique and Antiquity products as if they are all Bear
Tooth Hair Bands.
Q: What can be done legally?
A: Bear Tooth is a registered trademark of Mr. Lee, so any
use of the name to sell a similar product is unlawful. You can send letters
asking for cooperation, and if a retail store continues to use the trademark
illegally, then you can bring a lawsuit.
Q: What would be a legal cost for lawsuit?
A: In this case, the trademark is registered with the USPTO,
and the infringement is clear and obvious. More than likely, the retailers will
cooperate upon receiving letters. Therefore, the cost would be attorney’s fee
for drafting a cease and desist letter plus administrative cost including
postage and handling, which could run a few hundreds of dollars.
Q: What about similar names like Black Bear Tooth? What can
be done?
A: Thanks to the ITU Application, the trademark is
registered with the USPTO by now. There is no need to prove priority as it is
given by the fact that the trademark is registered. You can just let retailers
know of the registration and proceed with other legal measures such as
injunction prohibiting import. After the acknowledge of registration, any
profit made through illegal use of your trademark becomes recoverable upon
trademark infringement lawsuit. There is very little incentive to continue
illegal use of a trademark for retailers and distributions alike.
What about the retail store ownerโs liability?
Q: Can a retail store advertise and sell another product as
Bear Tooth Hair Band?
A: Of course not. It is a trademark infringement. Bear Tooth
is a registered trademark of Mr. Lee. He
has an exclusive right to commercially use the name. Technically, no one can
use Bear Tooth mark on a hair band packaging, retail display, brochures,
advertisements without Mr. Lee’s consent. Of course, you can use the mark in
association with the original Bear Tooth Hair Band. However, you may not place
another product in a section you marked with Bear Tooth mark. This would lead
your customers to believe any product in the section is Bear Tooth products,
which results in a trademark infringement. Not only civil liability but also
criminal penalties can be imposed based on the intent of using the mark.
Q: If I had no idea about the trademark infringement, am I
okay?
A: There is no intent requirement for trademark
infringement. On the other hand, you may be subject to a lesser punishment if
you did not know about it. Often, trademark owners will send letters to retail
stores regarding a trademark infringement. If the retail owners keep infringing
trademark after receiving the letters, they cannot later argue that they did
not know. Knowingly violating other’s trademark rights will make you liable for
all loss of profit for the trademark owner plus other damages.
Q: How do you know what is a trademark of others?
A: Registered trademark owners can use ยฎ mark to notify the public of
their rights. Even if not registered, TM is available for marking any
trademark. Beware that because TM mark does not require registration, it can be
abused for marking non-trademarks as trademarks.
Let’s compare the two scenarios.
Antique Metal Zig-zag
Bear Tooth
Trademark
โAntiqueโ and โmetalโ is generic terms for the
material and design.
Weak
trademark rights
โBear Toothโ is a unique, suggestive term for the
product.
TM
rights immediately available
USPTO Registration
None
Need to prove your rights
Intent-to-use Application
ITU provides priority
Similarity of Marks
Antiquity Metal Zig-zag is very similar to Antique
Metal Zig-zag
Other
factors like color, font, and design are considered.
Black Bear Tooth is just a black Bear Tooth.
Obvious
infringement
Legal Action
Unlikely to succeed without a substantial time and money
Affordable options available: letters, reporting to law enforcement,
etc.
When a product becomes a success, it is rather expected that
similar products start to crowd the market. Nonetheless, it is forbidden by the
law that second comers to deceive consumers with a confusingly similar mark or
product package.
As we saw in the above Bear Tooth scenario, a good planning
of trademark protection often helps more efficiently dealing with any
infringement activities.
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