By the time Apple Inc. debuted iPhone in January 2007, the prefix “i” had already become a thing of Apple. The inauguration of iMac series dates back in 1998. In 2003, iPod was a mega hit.
Lesser known than Apple, however, there was a startup called InfoGear Technology Corporation, which developed an internet phone technology, called “iPhone.”
Yes, iPhone™ by InfoGear.
specimen in InfoGear’s trademark application
Of course, there’s nothing suspicious about Apple’s iMac; the iMac trademark was first registered in 1995 by Digi International Inc. which assigned the trademark to Apple in 1998. Here, Apple did a right thing; it bought the iMac trademark before announcing iMac.
But, how about iPhone? Based on the USPTO’s record, InfoGear used the iPhone trademark from 1997, and it was registered in 1999. Apple filed its iPhone trademark application in January 8th, 2007. (Steve Jobs unveiled iPhone to the world the next day).
Can Apple do that? Absolutely “NO” said Cisco who brought a lawsuit against Apple based on its iPhone trademark purchased along with InfoGear.
In all fairness, if Cisco proved its seriousness about iPhone in the court, we might now have “iPod 4G LTE Advanced” instead of “iPhone 7.”
Who knows what Steve Jobs said to Cisco, but Cisco somehow agreed to a concurrent use of the iPhone trademark. (Apple probably challenged Cisco’s iPhone trademark by saying that “i” prefix had been associated with Apple product even before Cisco’s registration.) Well, assuming Cisco had a valid and enforceable trademark right, what could’ve happened?
Cisco would say the iPhones sold by InfoGear and Apple were both communication devices, and customers would likely be confused. Of course, Apple would say they are totally different devices; but Apple likely loses on this account.
As a counter, Apple could’ve argued that Cisco stopped using the trademark (thereby lost its right). Then, the followings become relevant: How many iPhone Cisco sold? How many people bought, used, knew or seen iPhone by Cisco? Had Cisco advertised iPhone? My guess is that Cisco purchased the iPhone trademark, but it really didn’t think about using it much.
So, be aware that to own a trademark, you have to actually use it, which means placing your goods/services (bearing that mark) in the market.
Trademark registration provides security. For example, companies often file intent-to-use (“ITU”) applications before making and selling new products. Without the ITU, mobile phone companies won’t be able to announce a flagship model months earlier than actual release, nor can they push an advertising campaign for a new product before they make sales. (Announcing or even advertising is not enough to establish a use of trademark under the trademark law.)
Trademark registration provides security. For example, companies often file intent-to-use (“ITU”) applications before making and selling new products. Without the ITU, mobile phone companies won’t be able to announce a flagship model months earlier than actual release, nor can they push an advertising campaign for a new product before they make sales. (Announcing or even advertising is not enough to establish a use of trademark under the trademark law.)
There is a “strong mark” and a “weak mark”. You don’t need to know all legal distinctions as to different types of marks, but you want to have a strong mark, right? Here’s a shortcut to get to the goal.
For a starter, you don’t want to choose a mark that’s fairly similar to what’s already out there.
If you are making a new
internet search engine, don’t name it “Goggle” or
“Yahou!” Your common sense and conscience will tell you
why. Similarly, don’t name your search engine “Stanford Internet
Search.”
A clearance search can be
cheaply done by a Google search. Search the names you have in mind
(or what you’re using already). Not only that, search goods or
services that compete (or would compete) with yours. You definitely want to
know what their names are.
Avoid any confusion at all cost. You
probably shouldn’t call any of your good/service “Coca-Cola.”
Nor can you call your soft drink product “Soda.”
Next, your mark should stand out.
You can’t name your concierge service “Luxury Concierge Service.” Well, technically you can, it’s a free country. However, the law is reluctant to protect your trademark because other companies should be free to say their Concierge Service is Luxury.
You need to be creative on this.
“Kodak,” I think, is a superb trademark. It’s short but distinct,
original but easy to pronounce. Don’t worry if you’re not good at making up
words. A common word like “Apple” can be a good trademark
for a computer electronics company.
Internet-readiness
In today’s world, an internet domain name is as important as a trademark.
A domain name registration does not necessarily mean that the name is taken
as a trademark by others. However, you probably want to avoid someone else
owning YOUR_TRADEMARK.com.
If the name in your mind is still available for a new registration, get it
immediately. The domain registration costs less than $12 a year.
(It’s as easy as setting up an email account.) If it’s owned by others,
consider buying it from the current owner or finding a better name.
Many low-end products tend to say exactly what it is. On the other hand, high-end products are very subtle. Have you ever bought a crappy good carefully wrapped inside a sophisticated package? Well, more likely than not you weren’t careful.
The thing is there is a tiny market for a fancy looking crappy product.
In other words, having a fancy name does rarely fly for a low-end product. You should name your product for what it is. However, that doesn’t prevent you from growing a great brand name.
In retail, packaging does not only protect the goods but also express about the goods.
One important thing you learn from a package is the source of origin. Well, the source of origin goes far beyond just the country where it’s made. Literally anything to a certain extent including the names of a seller, a distributor, or a manufacturer can be marked on the package.
Have you seen “Designed in California” marking on Apple products? That speaks for how consumers perceive the source of origin information.
Consumers of today are not just looking for a pair of pants. They always shop for their favorite pair of pants.
So, the source of origin is important.
I didn’t say anything can be written. In fact, it has to be truthful to begin with.
On the other hand, any trademark can be truthful as long as nobody else is using it. Well, that’s not entirely true because there are certain limitations to what can be a trademark. More to that later.
Nowadays, retailers are increasingly selling products under their store brand names. This trend reflects the fact that manufacturing technology affected goods is mature.
What does this tell you?
People are looking for a name they can trust unless they expect to find an exciting feature or technological advance inside. You should go for a trust-worthy name, and you should stick to it.
When you are using a unique name or phrase depicting your product, mark it with “TM” to give the public notice. You can always go for an Intend-To-Use trademark application although it’s only recommended case-by-case. When registered, you can put ® instead.
When you run a business, there is a chance that one day you receive a letter claiming that you are infringing someone else’s trademark or patent rights. It’s commonly called a “Cease and Desist Letter.”
Sending a Cease and Desist Letter (“C&D letter”) is a legitimate practice of enforcing one’s intellectual property (“IP”) rights. When you have an IP right, you should actively enforce it. It is a common practice to send a C&D letter to give a notice to related parties about possible infringement, and it also serves as a means to establish a communication channel between parties.
What to do when someone claims you’re violating their IP rights?
1. Not all C&D letters are the same.
It usually starts with a strong language about your wrongdoing, penalties, and of course they always say they have a solid case against you. They often set a deadline in their terms and threaten you with a lawsuit.
Sometimes they do complete a comprehensive analysis before sending out a letter, but they could simply rely on nothing more than a hunch. That’s why they are often written in vague and generalized terms. They can draft one and start sending to everyone they know.
On the other hand, the recipients often panic because they get this out of the blue. You’d be surprised by how many entities are only seeking settlements. They can’t risk going to a trial because it might set a bad precedent. In other words, they know they’d lose if they go to trial.
2. You should consult with people around you.
Getting a lawyer for defending against a sham assertion of infringement sounds very expensive. Also, when you go to a lawyer, he or she might simply say “Oh, I can help you settle this case.”
That’s, in many cases, the safest, simplest, and most cost-effective thing to do. But that’s not always true.
There is a good chance that someone you know has received the same letter before, or they at least know someone who has. Ask them how it went. The infringement analysis is almost always more intricate than what the C&D letter says.
3. Find experts next.
Ultimately, you have to find someone who knows what’s going on to really understand what’s going on. IP professionals can tell you how much you are in trouble, what are your chances to be served with a summon, how you can avoid further infringement, and so on.
If it’s patent related issues, you should find a patent attorney. Patent attorneys are licensed attorneys who are registered with the United States Patent and Trademark Office. They passed a state bar (so they are presumably competent to represent you in legal matters) and a separate examination administered by the USPTO about the patent law (so they know the patent law). There are patent agents, non-lawyers who are registered with the USPTO, but they are more focused on helping you get a patent.
For trademark issues, there is no certification or license. In theory, any lawyer can represent you in trademark law matters. However, not all lawyers are equally competent. So, here’s a litmus test I suggest. If they simply say, “I can draft a reply or get a settlement offer for you”, then you might want to find another lawyer. You want someone who can tell you what’s really going on before even considering those options.
When it comes to trademark (or servicemark), brand names, symbols, and logo designs are the first things to come to your mind. However, there are other types of trademarks that are protected. For example, a sound or packaging is also protected by the trademark law.
Among those, trade dress refers to packaging and other product designs that can identify a source of goods.
Below is a trade dress registered for juice drinks.
Registered Trade DressActual Product Design
Sometimes, a part of a good itself can serve as a trade dress like the shape of guitar headstocks.
These trade dress are registered with the USPTO and afford the same protection as any registered trademark (or servicemark). As you can see, trade dresses includes only non-essential or non-typical parts of a product or packaging.
Simple and luxurious designs often require an obscure marking, and in these cases, trade dress can be a powerful protection against knockoffs.
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 marriage”, 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 there’s 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
“Antique Metal Zig-zag Hair Band”. It is about to become a huge success, and
then he finds out a wholesale is selling “Antiquity” 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 “Metal Zig-zag Hair Band”. 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 owner’s 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 ® 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
“Antique” and “metal” is generic terms for the
material and design.
Weak
trademark rights
“Bear Tooth” 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.
