Point of View August 9, 2010
1) What’s in a name? Avoiding pitfalls in selecting a new brand.
If you ever doubted the importance of a good brand for your business, just try to launch a new company, call it “BP” and see how may customers you will attract!
Many businesses spend a fair amount of creative brainstorming efforts and market research coming up with a series of potential names for their new company, or for their upcoming product or services. Yet they often disregard the fact that choosing a new brand name is not as simple as registering a domain name and starting to market the new brand to the world. Branding involves both a business and a legal process and ignoring that reality can lead to many unwanted and costly scenarios, such as having to change name mid-course or worse get engulfed in an expensive trademark opposition or litigation when every penny counts.
You see those ® and TM signs all the time along famous -and not so famous- names. But what do they mean exactly? Well, the TM sign means that the company is using the name to function as a trademark, but it has either not applied for its registration or such registration is still pending. The ® means the mark has been registered with the USPTO or in the corresponding country (ies) where it’s being used. SM is the equivalent of TM, but applied to services instead of goods.
So, what is a trademark? For all intent and purposes, a trademark is anything that the public uses to identify your products or services as yours, and distinguish them from those of your competitors. So a trademark is supposed to perform this “source-indicating” function, essentially acting to guide your customers back to you, and prevent them from mistakenly going to your competitors. Understanding the function of trademarks is important because it will allow you to select a brand that functions as it should - by identifying your (and only your) goods and services.
Let’s first distinguish between corporate names, tradenames and trademarks by simply referring to IBM as an example: International Business Machines Corporation is the corporate name. This is the name it uses in official documents. International Business Machines or, more often, IBM is its tradename, i.e. the name it uses in every day communications. Finally, IBM ® is the main trademark (in plain letters and in its logo type: ), whereas BladeCenter™, NavCode™, zEnterprise™, to name a few, are secondary trademarks identifying specific products of IBM.
In the US, Canada and many other common law based jurisdictions, one may acquire trademark rights either by use in commerce or by registration. In other words, others may have rights that precede yours if they started using the name first, even if they never bothered to register it. So making a branding decision has important legal ramifications and it is usually recommended to first consult with an attorney versed in the law of trademarks to help steer you past the potential pitfalls.
The way the law works, some trademarks are inherently stronger than others and will be more easily protected and enforceable. In the grading scale of marks, the arbitrary or fanciful names are the strongest. Kodak® is the text book example. Most family names also fall in this group. Then comes the categoryofsuggestive names (e.g. Apple-A-day for daily vitamins), where we find most brands nowadays. Descending the ladder, one finds the descriptive names (such as “Vision Center” for an optical services shop). Those will only enjoy protection is they have acquired a secondary meaning (i.e. some fame) with the intended audience. Finally, purely descriptive (e.g. “table” for tableware) or generic names usually deserve no protection at all, although some they may have started as trademarks (e.g. escalators, kleenex, etc) before becoming generic over time.
In short, the more distinctive your mark is – that is, the more effectively it performs the source-identifying function of a trademark – the more protectable it is likely to be. For this reason, you should think carefully about how important exclusivity and protectability are to your plans for marketing your new product or service. For instance, if you contemplate franchising activities, a national (and maybe international) protection is probably a pre requisite. On the other hand, if you open a local shop, or are building a software product that is likely to be sold to another company, you may not have to give the same importance to protecting your brand. Again, an experienced IP practitioner can help you sort through these issues and select a mark that fits your needs.
Once you’ve selected your brand candidate, and you have –preferably- tested it with some customers for validation and feedback, you’ll want to have a clearance search done with the national trademark registry (USPTO in the US) to confirm that the brand is indeed available in the country where you intend to use it for similar good or services. (i.e. identical marks can coexist for different categories. E.g. Apple for computers vs. Apple for music recording studios). And if your business plan involves taking over the world, you’ll need to do this on a global basis, which can be expensive.
Why not simply google the name myself, you ask? Well, although an internet search may give a good indication of how unique or common the name is and may be quite helpful (and free!) for the initial triage stage, it is by no means a comprehensive or reliable result. Thousands of trademarks have been filed based on intended use and will not show up in any standard internet search. And remember that trademark law is about avoiding confusion, which means that names only have to sound or look similar (as opposed to be identical) to potentially trigger an infringement claim, so you can’t ignore close phonetic equivalent (“Foto” vs. “Photo”) or look alike logos. An internet search won’t given you that kind of info.
It is always a good idea to have a trademark search conducted before adopting any mark, to determine whether it is available for your use and registration. A professional can obtain the necessary searches for you, evaluate the search results, and provide you with an analysis of the marks’ availability and registrability. Waiting to do this after you’ve already invested a fair amount of money and efforts to make your brand known is really not a good idea.
Once you’re satisfied that the brand you want is available in the markets you are targeting, then you will want to apply for a registration, even if you haven’t yet started to use the name. Filing is tantamount to a reservation and you can always cancel your application later if your plans change, subject to loosing the initial filing fees. Also, in many countries in Europe and Asia, this is the only way to acquire rights, i.e. using the mark in commerce does not suffice. If you have a logo version of your mark, you should strongly consider filing applications to register both the “word” version and the “logo” version. Registering only the logo version will only cover the brand when used in that specific (basically, that identical) logo version. Once your mark is registered, you have a federal monopoly that applies country-wide, whether or not your mark is used in regions where other confusing names may pop up later. And it’s a lot easier to enforce, should you have too. Which cuts both ways if you’re the one coming too close to a third party’s registered trademark. So remember, selecting a brand is a little like buying vacant lot; you want to make sure the title is clean and there are no encroachments before you start building your house on it!
2) The Supreme Court Decision in Bilski: Is It Back to the Future?

A month or so ago, I was one of the first ones to report the Supreme Court decision In Re: Bilski, without a doubt the most anxiously awaited case in the IP and business communities, and I’m probably one of the last one to comment on it today. Why is that so? First, the weather in the last month was just way too nice to spend it deciphering the hair splitting ambiguity that the highest tribunal left us with; I instead focused on improving on my cycling and those hills are looking flatter by the day! Second and more importantly, it would seem like every single IP lawyer or law professor out there has felt the urge to start their illustrious blogging career around this case. Frankly, I just couldn’t muster the energy to read them all and come up with the mother of all summaries that would look like I actually came up with all that collective wisdom. One thing I can do though is give you a few pointers and I’ve attached below for those who want to explore further a list of the most widely published articles following the Bilski decision.
So what now? Well, in short, not much. Business method patents are still alive and well and software patents as a whole have not been put in question. So the Armageddon that many predicted or feared did not occur. That is the good news… if you’re in the pro patent camp of course.
However, some commentators believe that the US Supreme Court has, with one stroke of the pen, obliterated over 25 years of precedents from the Federal Court by setting the clock back to its own 1982 precedent. Therefore, we will have now have to wait for a few cases from the Federal Circuit to really see how it will take the cue from the Supremes and either try to somehow instill a second life to the compendium of cases it had gotten comfortable with, or start over from scratch with some fresh thinking. I can see the litigators rubbing their hands in delight!
In the meantime, that hasn’t stopped the USPTO (the body deciding whether your patent application will survive or not) to issue some internal guidelines to their patent examiners, lo and behold, the same day the the Bilksi decision was issued (with a 4-5 year current pendency, you wished they’d be as swift when it comes to reviewing your case!). Such guidelines would suggest a certain reversal of the burden for patent eligibility against the applicant, therefore making it harder to receive a patent for an invention when it verges on being too abstract. This remains to be seen in practice, but some pundits are already calling for the USPTO to amend its own guidelines on tghe bassis that they are not faithfully following the Supreme Court reasoning.
3) US Introduces New Copyright Exemptions
You all read about the jubilation of Apple critics about the news that they would now be entitled to- legally- unlock their phone. You don't get such excitement very often coming from the Library of Congress, do you? Well, the venerable US Library of Congress has announced six new exemptions under the Digital Millennium Copyright Act (DMCA) – including circumventing protected DVDs and phones in some instances. The DMCA regulates how copyright material is dealt with in digital and online spheres, and includes provisions that prohibit circumvention of certain technological protection measures (TPMs) used to protect copyright works.
However, the DMCA allows particular classes of works to be exempted if TPMs are found to have an adverse effect on a user’s ability to make non-infringing uses of those works. The US Library of Congress reviews and determines which classes are to be exempted every three years, following public consultations and hearings.
The current determinations were released on July 26th 2010, and the exempted classes are:
DVDs: Users will be allowed to circumvent protected DVDs if using a short portion of a motion picture for criticism or comment and if the use fits within one of three contexts: (i) educational use in universities by professors and film and media students, (ii) documentary filmmaking, or (iii) in non-commercial videos.
Jailbreaking: TPMs on phones (such as Apple’s iPhone) that lock the device to a single platform can be circumvented in order to run non-infringing third-party software.
Carriers: Users will be able to circumvent protection on their phones where it locks a phone to a particular carrier.
Video Games: Video game TPMs can be circumvented if done for the good faith purpose of testing or investigating security flaws. Information gathered during testing cannot be used to infringe copyright and must be used within a security-promotion context.
Dongles: Dongles (hardware keys that are used to protect software being run on unauthorised machines) can be circumvented if they are no longer commercially available or obsolete.
E-Books: If no audio version is available, the TPMs in e-books can be circumvented for the purpose of having the text converted to speech/read-aloud formats.
These exemptions will be valid only until the next review - in three years’ time. Stakeholders must re-apply if they wish the exceptions to continue in the next determination.For more information, see the US Library of Congress website at: http://www.copyright.gov/1201/
Congress Gives USPTO Fee Boost Although major patent reform remains elusive, Congress gave a much needed boost to the U.S. Patent and Trademark Office yesterday when it approved an additional $129 million in fee revenue for patent and trademark activities.
USPTO Proposes to Establish Three Patent Processing Tracks The Department of Commerce’s United States Patent and Trademark Office (USPTO) recently released a proposal and is seeking public comment on a new patent examination initiative that would provide applicants greater control over the speed with which their applications are examined and promote greater efficiency in the patent examination process. The new “Three-Track” program aims both to provide applicants with the timing of examination they need and to reduce pendency of patent applications.
California Supreme Court approves Google age-bias suit Google will have to defend an age-bias suit thrown out by a trial court, after the California Supreme Court ruled that remarks made by supervisors of a fired employee were fair game for legal action. The employee alleges that he was called an "old man" and a "fuddy-duddy" before being fired. Google officials said they had "legitimate, nondiscriminatory reasons" for terminating the worker's contract.
DMX Wins 1st-Of-A-Kind Blanket License From BMI DMX Inc., a provider of background music services for restaurants, bars, hotels, retailers and other businesses, has won an adjustable fee blanket license from performing rights organization Broadcast Music Inc. that purportedly awards it direct negotiations with music publishers.
The Demise Of Junk Science And The 25% Rule Recent decisions in patent infringement cases show that the courts are moving toward requiring the use of fundamental and rational economic methods for determining reasonable royalties. The 25 Percent Rule is neither rational nor based on fundamental principles, and it is contradicted by empirical evidence.
Adobe To Nab Swiss Web Software Co. For $240M Adobe Systems Inc. plans to launch a public tender offer to buy the shares of Switzerland-based Day Software Holding AG in a deal valued at about $240 million, the companies announced recently.
Major Revamp of Canada’s Copyright Law The Canadian Government recently introduced a new bill called the Copyright Modernization Act which is poised to modify and bring up to date many areas of Canadian Copyright Law. The government has set up a site called Balanced Copyright. On the site are fact sheets, FAQs, a news release and a backgrounder.
The art of startup names
Killer Tips for Marketing a Startup
Is Google Over?
Microsoft just unleashed thousands of entrepreneurs into the wild
How good companies do great design
How to Write a Winning Press Release: The Step-by-Step Guide
11 Free Services for Scheduling Social Media Updates
How 12 CEOs & Founders are Leveraging Web Video
Why Didn't I Think Of That? 14 Obvious Inventions You Could Have Easily Thought Of (PICTURES)
Put the "social" back in "social media"
4 Lessons Small Businesses Can Learn from Apple's Antennagate
Intangible Capital: Putting Knowledge to Work in the 21st Century Organization Today, 70% of the value of the average company is intangible. But knowledge intangibles—like the individual knowledge of your people, shared knowledge with your external stakeholders and the knowledge captured in databases, processes and IP—are invisible in today's management toolkit. This book is for every manager struggling to succeed and innovate in today’s knowledge-based economy.
|

Louis Carbonneau
Founder & Principal
The Point Law Group
THE POINT LAW is a boutique law firm specializing in business and technology law catering primarily to technology and e-commerce companies. We offer a full range of legal and business solutions to start-ups, small and medium-sized businesses and large multinational corporations.
You can contact Louis directly at:
louicar@thepointlaw.com
(425) 868-9280 (o)
(425) 213-7252 (m)
UPCOMING TALK
On August 11, Louis will be keynoting at the DBM Executive Forum in Bellevue, WA. His talk is entitled: Winning Legal &IP Strategies For Entrepreneurs
ANNOUNCEMENT
To better serve his clients and the IP community in general, Louis has recently joined Tynax, the largest patent and technology trading exchange and will be offering a full brokerage service representing buyers or sellers of IP assets.
PREVIOUS ISSUES
To read previous issues of
Pointers, clieck here:
April 26 Issue
May 6 Issue
June 24 Issue
June 28 Issue
|