Trademarks and Domain Names
Contents
1. AND OTHER DEALS It goes without saying that technology companies use trademarks on their prod ucts and in advertising and promotional material for their services But that is not the only use There are many other ways in which you can build and promote your trademark In addition to the business discussion in this section you will find discussion of trademark issues in Chapter 14 on distribution deals Chapter 20 on licensing and clearing digital content Chapter 21 on Web and mobile deals and Chapter 22 on videogame deals Trademark Guidelines There are many ways in which companies permit their trademarks to be used by other companies The most common is in distribution Companies often allow authorized distributors and dealers to use trademarks on Web sites business cards advertising and so forth In some cases trademark use is mandatory S 87 88 CHAPTER 4 Trademarks and Domain Names Whenever your company permits another company to use your trademarks you should do so pursuant to written trademark guidelines also known as branding guidelines that the other company agrees in writing to follow In distribution agreements there will normally be a clause on trademark matters that requires the distributor to comply with the supplier s current branding guidelines For more information on distribution deals see the discussion in Chapters 14 and 15 There are countless examples of trademark guidelin2. As you can see in this chapter federal trademark law is full of distinctions and rules There are possible errors and traps that can prevent federal registration limit the scope of protection or even make the registration invalid later on We therefore suggest that you consult a capable trademark lawyer to submit your trademark application and to advise you on trademark issues Having a lawyer bring the trademark through the federal registration process normally costs about 2 000 to 3 000 assuming that the process does not run into compli cations The registration process and its possible complications are discussed in the following section However for those that do want to do their own registration here are some tips on going forward The place to start is the USPTO s Web site at www uspto gov which has a wealth of information about trademarks On the site TEAS allows you to fill out a form and check it for completeness over the Internet Using TEAS you can then submit the form directly to the USPTO via the Internet There is useful informa tion about the TEAS system at www uspto gov teas index html There are also instructions on the online form Here are a few things to keep in mind a You may only register one trademark in one class per application Application gives you an option of filing based on use or intent to use You can only choose one of these two options a If you check the box for an application based on us
3. Database Graphics OS for operating system Utilities and so forth These marks are the weakest By themselves they have no protec tion at all However it is possible sometimes to protect the combination of words that is generic in part but has a nongeneric component for example Microsoft Works Norton Utilities or CorelDraw Under US trademark law if a generic term is given a novel spelling it is nonetheless generic Rules of Proper Trademark Use Sometimes trademarks that were originally distinctive become generic because they come to be identified not as a trademark for a product but with the product itself Examples of common words that started out as trademarks are aspirin and dry ice Because aspirin and dry ice are now generic any company can call its acetylsalicylic acid aspirin or its frozen CO dry ice So when a trademark becomes generic it loses all protection and anyone can use it Lawyers refer to this as genericide Genericide applies in the digital technology world A federal court in California ruled in 1991 that 386 a variant of Intel s 80386 brand for a family of micropro cessors had become generic and could therefore be used by AMD a competing maker of compatible microprocessors This is one reason that Intel switched to arbitrary marks like Pentium and Centrino S 67 s 68 CHAPTER 4 Trademarks and Domain Names How do companies stop genericide Here are some often quoted guideli
4. However sometimes trademarks that are not currently used can be revived by their original owners Your trademark lawyer can help you determine what is available 73 es 74 CHAPTER 4 Trademarks and Domain Names Once the results of the search are in they have to be evaluated This is where the advice of competent trademark counsel is crucial Trademark counsel can help you to interpret the results of the search and decide if the trademark is worth pursuing Counsel can also craft an application for trademark registration so that it avoids objections and covers the business areas that are most important to your business Prescreening Potential New Trademarks Coming up with new trademarks for technology products and services is not easy That is because there are now so many trademark and service marks already in use and registered It is hard to find names that are original When you are selecting a mark you might want to do some trademark prescreening on your own before you submit a mark to your trademark lawyer This is a way to avoid wasting time and money for reviews of marks that are already taken It is not a substitute for having a thorough search and an analysis by a trademark attorney You may also need to secure corresponding domain names this is a topic discussed below If you do wish to do your own trademark screening here is some guidance on how to proceed A good starting point is the online trademark database provide
5. Allegation of Use is due within six months after the mailing date stamped on the Notice of Allowance which is USPTO s notice that it has approved your trademark registration application The date for filing the Allegation of Use can be extended by filing the appropriate form for up to 36 months ESSENTIAL ACTIONS TO PROTECT YOUR TRADEMARKS Whether you have registered your trademark or not there are certain essential steps that you should take to protect it Trademark Notices Whenever you use your trademark registered or not you should use a trademark notice The notice should appear together with the trademark on every product package user manual label advertisement and brochure for the product The notice serves two functions First it puts all would be trademark infringers on notice that you claim trademark protection Second it helps fend off claims that your trademark has become generic In some cases failure to use a notice will impair your ability to sue for trademark infringement 81 82 CHAPTER 4 Trademarks and Domain Names Notice for a Federally Registered Trademark If your trademark is registered on either the Principal Register or the Supplemental Register it is very important to give notice of federal registration In some cases you may not be able to get monetary damages in a lawsuit for infringement unless there is such a trademark notice on your goods and on advertisements and pro moti
6. At one time a software window was simply a screen or part of a screen in which content might be displayed now of course it is distinctively associated with Microsoft operating system products Strong and Weak Marks Strong marks are good When you go about choosing a trademark or evaluating the inherent strength of an existing trademark you need to know how the law classifies trademarks There is a ranking based on how inherently distinctive types of marks are As mentioned the more distinctive the stronger the trade mark the less distinctive the weaker the trademark Here are the categories Arbitrary Marks An arbitrary trademark is one that bears no logical rela tion to the goods that it labels Examples are coined marks like Xerox eBay or Symantec or marks with meaning wholly unrelated to the function of the product like Apple Adobe or Amazon Arbitrary marks have the strongest inherent distinctiveness Suggestive Marks A suggestive trademark is one that suggests but does not describe a product s function Examples are Autodesk for design and drafting software iTunes for an online music store Intuit for financial software and VeriSign for encryption and security products None of these marks states what the products do but each product trademark sug gests what the product line does Suggestive marks are also strong but not as strong as arbitrary marks That is because similar products can justifi ably h
7. Internet there is more brand friction There is also more rea son than ever to consider an international branding strategy Meta tags Meta tags are HTML text data in Web pages which are invisible when a user views a Web page with a browser but are visible to search engines that index it Meta tags typically describe the site s content and create key words If you had a Web site that sold coffee you might include Coffee Java and Kona in your site s meta tags It is possible for a company to use another company s brand as a meta tag for its site in order to fool search engines In one litigated case Natural Answers an herbal medicine company sold a natural tranquilizer called Herbrozac and included in its Web site the meta tag Prozac As Natural Answers intended search engine users who were looking for information about Prozac saw Natural Answers site show up high in search results When Prozac s maker Eli Lilly sued 91 es 92 CHAPTER 4 Trademarks and Domain Names the court held that Natural Answers had engaged in trademark infringement Even though a consumer who got to the Natural Answers site would surely realize that Herbrozac was not Prozac this use of meta tags to create initial source confusion has consistently been held to be wrongful under trademark law DOMAIN NAMES A domain name functions as a unique Internet resource locater Domain names are used to loc
8. Sports It s in the Game Letters and or numbers like AS 400 an IBM computer hardware brand A design or logo like Apple Inc s various apple shaped logos A sound like the familiar Yahoo yodel sound Trademarks are source identifiers that carry an emotional charge They can be conservative and safe for example IBM s brand WebSphere They are sometimes quirky like Google or hip like Java They can come in families like iTunes iPod iLife iPhoto iPhone and iMac Selecting good brands is an art Many digital technology products have more than one trademark for example Symantec the Symantec logo and pcAnywhere are all trademarks of Symantec Corporation and all are used on pcAnywhere products A trademark can also be used to show one company s component in another product An example is the famous Intel Inside logo and sound Service marks are trademarks that apply to services Companies that provide online services such as software as a service vendors use service marks So do ser vice Web sites such as online travel services auction sites or dating services Other digital technology businesses that use service marks include developers contract programmers data recovery services data and media conversion services and system integrators For convenience we will refer only to trademarks or just use the term marks aside from some details of the procedure for registration the rules for service marks are the
9. a company to charge a premium price the investment in branding pays off From a legal perspective your goal should be to create a trademark space that defines your products services and company now and for the future That means companies should Get a strong and defensible trademark or family of trademarks Have protection for the trademarks in every market in the world where the brand is used Be proactive in trademark protection so that legal protection is secured not only for existing product brands and product types but for product extensions and not only for current geographic markets but for future sales territories as well m Actively exclude others from using confusing similar trademarks in each relevant product market 63 64 CHAPTER 4 Trademarks and Domain Names We recommend that every technology company think long and hard about its brands and review its branding strategy periodically Product development and branding should be coordinated Companies need to allow for the time required to select a protectable brand and if needed secure the corresponding domain names Trademark registration should be secured in all relevant mar kets in time for launch of each new branded product and service If you want to have a family of marks like the iTunes iLife iPhone series apply for them in advance If your company properly establishes and protects its trademarks the law can be a powerful tool to
10. begin ning of the case Where there is counterfeiting the court often will award three times the actual damages and attorneys fees A holder of trademark on the Principal Register may also request the United States Customs Service to prevent the importing of goods labeled with its trademark Conclusion The Customs Service unfortunately does not have the resources to police all US imports and thus the amount of protection you can get from this system is uncertain Infringement Remedies for Unregistered Trademarks Even if you do not have federal registration state and federal law may give you protection if someone uses your trademark or one confusingly similar and harms your business But as noted above federal registration can provide much better protection There is a section of the Lanham Act that grants a remedy in federal court against anyone that damages another by using a name or trademark that is likely to cause confusion or is deceptive This statute has often been used to protect unregistered trademarks In addition state law is likely to protect unregistered trademarks against infringement Remedies under these provisions may include monetary damages and court orders including preliminary relief early in the case to stop the infringer s use of the trademark CONCLUSION Building and implementing legal protection for your brands is essential for the success of a digital technology business You should be
11. cornerstone of trademark law Trademark law protects a distinctive trademark with priority against other companies that are using marks that are confusingly similar that is marks that cause customer confusion about the source of the goods This means that you may be sued if you adopt or are using a trademark confus ingly similar to another distinctive trademark that has priority over your mark Principles of priority are discussed in detail below Similarly you may have a litiga tion remedy if someone else adopts a trademark that is confusingly similar to yours but only if you have priority Use of a trademark that is confusingly similar to a trademark that has priority without permission constitutes trademark infringement What is a Trademark Deciding When Two Marks Are Confusingly Similar How do courts decide if marks are confusing similar in infringement lawsuits There are a variety of relevant factors m Fame of the priority trademark judged based on sales advertising length of use m Whether the priority trademark is strong or weak a Similarity or dissimilarity of the marks in appearance sound connotation and commercial impression a Similarity or dissimilarity and nature of the goods or services Number and nature of other similar marks in use on similar goods a Similarity or dissimilarity of trade channels m Conditions under which and buyers to whom sales are made for example impulse sales where risk
12. for your business and your trademarks Exploiting Trademarks in Distribution Licensing and Other Deals CTM Registration in the EU The EU has set up a unified system that allows one trademark registration to cover all 27 nations of the EU A trademark registered under this system is a Community Trademark or CTM An EU agency in Alicante Spain known as the Office for Harmonization in the Internal Market OHIM administers the CTM system This system functions in addition to the national systems of trademark filings The great advantage of the CTM system is its extraordinary reach on the European continent A CTM registration is the best deal in the world in trade marks A disadvantage is the fact that if OHIM finds your CTM application blocked in any EU country say on the basis of a prior registration in England OHIM will reject your CTM application as a whole At that point your only recourse is to apply in various nations individually A US applicant that wants to use the CTM system can apply in Europe nor mally you would use a trademark agent or attorney in one of the EU countries Or as noted above the US applicant could apply at the USPTO under the Madrid Convention process There are advantages and disadvantages to each approach and they are quite technical Your trademark attorney can advise you about the best strategy on applications for registration under the CTM system EXPLOITING TRADEMARKS IN DISTRIBUTION LICENSING
13. of confusions is high vs careful planned purchasing m Nature and extent of any actual confusion or the length of time during and the conditions under which there has been concurrent use without evi dence of actual confusion a Variety of goods on which the priority trademark is used Applying these factors to decide whether a trademark is confusingly similar to another is normally a matter of common sense based on the facts of the situa tion For example if you choose as your software trademark Orracle or Microsof it is a good bet that you will be sued and will lose Customers or potential customer could be confused You can also run into problems if part of your trademark is the same or similar as prior trademark On the other hand if the field of use of two marks is very different the same or similar marks may not be confusingly similar An example of this principle is the trademark Lexis which is the name of a database service for law firms owned by Mead Data In 1989 Mead Data sued Toyota Motor Co trying to prevent Toyota from using the trademark Lexus for its luxury automobiles Mead lost the case because the judge decided that the field of use of the two marks was just too dissimilar Different rules apply however for famous trademarks This topic is discussed below 69 y 70 CHAPTER 4 Trademarks and Domain Names Distinctiveness in Selecting a Trademark You should apply the concepts discuss
14. same as trademarks What is a Trademark Countries around the world protect trademarks under their national law In the European Union EU one Community Trade Mark or CTM registration can cover all 27 member countries While this chapter is primarily about US federal trademark law some important international aspects of trademarks are discussed later in this chapter In the United States trademark rights may arise under both federal and state law The federal trademark statute is called the Lanham Act Generally speaking the Lanham Act will apply with regard to trademarks used in US interstate or international commerce We will discuss state trademark law only in passing in this chapter Because most digital technology and software companies have inter state and international operations they rarely bother with state trademark filings Domain names are different from trademarks of course but they overlap with trademark law because they also can serve as important identifiers of products and services There are some cases where domain names are also trademarks for example Salesforce com is a trademark of Salesforce com Inc You will find a discussion of the legal rules that apply to domain names later in this chapter Trademark Goals Brands are built through smart selection advertising public relations and pro motion including Web promotion and labeling of products When a brand helps close a sale or allows
15. CHAPTER Trademarks and Domain Names No one was ever fired for buying IBM Anonymous This chapter is about brands the words and symbols that identify the source of products and services A strong brand can help bring customers to your products and services Brands provide credibility Building and implementing legal protec tion for your brand are essential ingredients in the success of a digital technology business The legal name for a brand is a trademark IN THIS CHAPTER This chapter covers the following topics all from a software Internet and digital technology perspective m Introduction to trademark law Strong and weak trademarks a Trademark priority m Trademark searches a US trademark registration a Trademarks around the world a Trademark licensing Trademarks on the Internet 61 62 CHAPTER 4 Trademarks and Domain Names Domain names a Trademark disputes WHAT IS A TRADEMARK You have an everyday sense of trademarks that identify companies as the source of goods and services such as Microsoft Apple IBM and Intel You know that trademarks also apply to particular products for example an Excel spreadsheet an iMac computer an Electronic Arts video game or a Core2 Duo processor Trademarks for products and services appear on screen displays on packaging in advertising on Web sites and in computer manuals A trademark can consist of A name like Microsoft A slogan like EA
16. S and the EU have accepted it Here is how it works m The Madrid Protocol system is administered by the World Intellectual Property Organization WIPO a UN agency headquartered in Geneva Switzerland m The process starts with an existing trademark application or registration known as the basic application or basic registration For a US company citizen or resident this would be the USPTO application or registration 85 86 CHAPTER 4 Trademarks and Domain Names Under the Madrid Protocol system a US based company citizen or resident can extend the base application or registration internationally by means of the USPTO The Madrid Protocol system requires that the trademark owner designate on the Madrid Protocol application each nation that it wants the application to cover Thus the system allows use of a single application which can be in English to reach many other nations The application is first accepted or rejected by WIPO If it is accepted by WIPO then any designated jurisdiction may still reject the application for any reason that it would reject a normal national registration such as undue descriptiveness or because of conflict with a prior registered mark Wherever the application is rejected in a particular nation the trademark owner can appeal to the nation s trademark registration authorities This will normally require getting local counsel or a local trademark agent If the Madrid re
17. Scope of the Trademark Search If you are going to sell your software or services nationwide you need to conduct a trademark search that is nationwide in scope You want to be sure that no one in the United States might stop you from using your chosen trademark International searches are appropriate as well if international expansion is part of your plan Getting Searches Done We recommend having the searching done through legal counsel because it will likely give you a more reliable conclusion Comprehensive searches using trademark search services can be expensive so trademark lawyers normally start with what is known as a knock out search A knock out search is meant to quickly identify marks that are obviously unavail able Typically a knock out search consists of preliminary searching with the online trademark databases Necessity of a Trademark Search before Adopting New Marks If a proposed mark survives the knock out test we do more thorough search ing based on a thorough written report from a search service The cost of the search report as of this writing is about 200 to 500 per trademark depending on the scope of the search To search a proposed symbol or design as opposed to words may be more expensive What will a search service do It normally will search a Computerized database of federal trademark registrations and applications a Computerized database of state trademark registrations and applications m V
18. Use during the sixth year after registration to certify that the trademark is still in use In addition your trademark gets incontestable status only if you also submit an Affidavit of Continuous Use during the same sixth year to cer tify that use since registration has been continuous Normally both these require ments are met by filing a single form known as a Sections 8 and 15 of Affidavit In addition you must renew the registration during the tenth year and every tenth year after that These are all documents that your trademark lawyer can prepare for your company Failure to file can constitute an abandonment of the mark Timely compliance with these requirements is essential Trademark lawyers have database systems in which they track required filing and renewal dates but it is a good idea to keep track yourself of key renewal dates All of these forms are available online and can be filed through the Trademark Electronic Application 79 c 80 CHAPTER 4 Trademarks and Domain Names System TEAS If your company complies with these requirements trademarks may be kept registered indefinitely some US registrations have been in effect for more than 100 years DO IT YOURSELF REGISTRATION OF US TRADEMARKS Some people simply cannot afford the cost of trademark counsel s advice It is also true that the USPTO lets businesses register their own trademarks Our advice however is that you use an attorney for trademark matters
19. ademark more or less distinctive what separates trademarks into strong marks and weak marks We are talking here about legal strength recognized in a court of law Generally speaking the stronger that is the more distinctive your trade mark is the easier it is to get strong legal protection for the trademark in court and the easier it is to get federal registration Two Kinds of Distinctiveness The law in fact recognizes two types of distinctiveness The first is based on inher ent distinctiveness This means using brands consisting of words and symbols that look and sound distinct when applied to a particular kind of goods Apple for 65 66 CHAPTER 4 Trademarks and Domain Names example sounds distinctive when applied to a computer music player or soft ware although it would be generic when applied to pies or jam The second type of distinctiveness is based on secondary meaning that is the power that a trademark gets when many customers have come to recognize it Secondary meaning is also called acquired distinctiveness A rule of thumb often used in the law is that a trademark in continuous use for five years is presumed to have secondary meaning but there are exceptions In this mass media age recognition can possibly come in a few weeks through intensive advertising and public relations Windows is a good example of a word that has acquired dis tinctiveness in the software world through use
20. advertising and publicity of the trademark m Geographical extent of the trading area in which the trademark is used 83 84 CHAPTER 4 Trademarks and Domain Names Degree of recognition of the trademark in the channels of trade used by the marks owner and the person against whom the enforcement is sought Whether the trademark was registered and if so for how long TAKING TRADEMARKS GLOBAL Your approach to obtaining international trademark registration should have the same goals as for US trademarks you want to keep other companies from using your marks in your markets and you want to avoid being sued for infringing others marks In the Internet age brands go global faster than ever before See discussion of trademarks and the Internet below Law firms that do trademark work as we do have correspondent counsel in other countries around the world that assist in trademark matters First a few fundamental facts about trademarks around the world If you have trademark registration in the United States only those registra tions provide no trademark protection in any other country In most countries trademark rights are based on a first to file principle This is different from the United States where you can get some albeit sometimes limited trademark rights just from use In most nations if your trademark is not registered you right to use your brand is at risk Your com pany must register its trademarks ab
21. al Register if the trademark meets the following conditions a The trademark is distinctive that is it is arbitrary or suggestive or if descriptive has demonstrable secondary meaning a The Trademark is not primarily geographic a The Trademark has not become generic m There is no significant likelihood of confusion with a trademark already registered If your trademark is enrolled on the Principal Register you have the following very significant benefits 75 76 CHAPTER 4 Trademarks and Domain Names a You can bring a federal infringement action in any federal court m Nationwide use of the trademark is presumed to have occurred from the application date You can prove earlier use as well If this date precedes all other users this date will usually establish a right of priority to the trademark Every user of the same or a similar trademark is presumed to have notice of the trademark and therefore cannot claim to be an innocent infringer from the registration date that is the date the trademark registration certificate is issued In any lawsuit during the five years after registration there is a presump tion that your use of the trademark is valid that the trademark is your prop erty and that your right to use it is exclusive During the five years after the registration a prior user can still challenge your right to priority but regis tration forces the other party to present affirmative proof that y
22. an states Necessity of a Trademark Search before Adopting New Marks There are two drawbacks to searching through Saegis One is the cost it is not cheap especially for inexperienced users that may spend time learning the system A thorough search done right may well cost several hundred dollars per mark The second drawback is that lack of experience may lead you to do an incomplete or inaccurate search You can find more information at www thomson thomson com The Advantage of Federal Registration Whenever a trademark is important to your business you should register it with the federal Patent and Trademark Office USPTO on what is called the Principal Register Why register Because as noted federal registration extends the geographic scope of your trademark and registration makes your trademark easier to enforce in a variety of ways Registration makes your trademark a more potent weapon Federal Trademark Registration System Under the federal trademark system the USPTO maintains two lists of trade marks and service trademarks the Principal Register and the Supplemental Register Greater rights are granted by registration on the Principal Register which is designed to protect distinctive trademarks The Supplemental Register which allows registration of trademarks that are not distinctive grants signifi cant but more limited benefits Principal Register Generally speaking the USPTO will put a trademark on the Princip
23. arious legal databases to see whether trademarks have shown up in litigation Domain names and Web searching Trade directories The search service will use computerized tests for similarities in look sound impression and use A trademark lawyer will examine the search report and make a judgment as to whether or not the mark is likely to be available Limitations of a Trademark Search Even the best trademark search does not produce perfect information It is possible that the search may miss current users of the name of a similar trademark Some businesses use unregistered trademarks that may not appear on any of the sources normally searched It is also possible that someone will register a name or intro duce a product with the same or a similar name after the date of your search These imperfections mean that you could do all these searches come to the conclusion that you have no trademark problems introduce your product and still get sued by a prior user Nonetheless the search is your best means of finding out what trademarks are in use Most of the time those who use the process and trademark counsel get the information they need to make the right choices for their companies One more note about searches If your search shows that a similar trademark has been registered it does not necessarily mean the trademark is in use It is possi ble that the user went bankrupt or gave up on the product line that used the trade mark
24. arting a company in technology you should try to secure both the com and net version of your company name if at all possible Getting those domain names even if you have to buy them from third parties will likely be a key asset It may also be prudent to secure confusingly similar or sound alike domains Domain Names Domain Names vs Trademarks In some ways domain names have characteristics that are quite different from trademarks For example Domain names are unique More than one company can have the same brand Anexample is Delta used by Delta Airlines Delta Dental and Delta Faucets There can be only one delta com currently owned by Delta Airlines Domain names may be generic Generally speaking trademark law will not grant trademark status to generic words Therefore you could not use as a trademark the word computer and stop other persons from using that word to describe their computer products But there is a computer com domain currently linked to the home page of CNET consumer electronic reviews Many generic terms are in domain names During the Internet boom of the late 90s it was believed that generic domain names such as computers com and pets com were the key to great riches Such domain names do have value but the market for them has certainly cooled People have realized that it takes a lot more than a domain name to build a successful business Sometimes companie
25. ate network resources for Internet applications such as email FTP fire transfer protocol or most significantly the Web Domain names are organized into top level domains such as com org edu and net There are also national domains such as uk for United Kingdom jp for Japan and in for India A nonprofit corporation called the Internet Corporation of Assigned Names and Numbers ICANN administers the domain name system and appoints pri vate companies as registrars that register domain names and keep them in effect in exchange for modest fees You can find a list of registrars at www icann org Each registrar provides a means of searching domain names and will allow you to determine if a domain name is available In many but not all cases the online record will indicate the registered owner of the domain name The registrars also provide procedures for transferring of domain names which is something you might do for example when selling a business or a product line Domains and Brand Identity Because the Web is so important as a communications medium domain names are critical to brand identity When selecting trademarks you should as a matter of course try to obtain the corresponding domain name For example the house trademark of International Business Machines Corporation is IBM so it obtained the Web address ibm com When IBM acquired Lotus in 1995 it also obtained lotus com If you are st
26. ave similar names For example another online music store could justifiably include the word tunes in its brand Descriptive Marks A descriptive trademark primarily describes as opposed to suggests the characteristics of a product such as its performance function What is a Trademark features quality or capacity An example is Virusafe anti virus software Some marks are more descriptive than others For example marks suchas Calendar Maker or Business Plan Maker are deemed very descriptive and therefore legally very weak marks In general descriptive marks are weak If marks are wholly descriptive trademark law protects them only if they have acquired significant secondary meaning Surnames as Marks Common family names as trademarks are weak and like descriptive marks will often be protected only if they have acquired secondary meaning Norton anti virus software would be an example of a surname that has this kind of acquired distinctiveness Surnames can be more distinctive if unusual or used in association with other words or in a distinctive design Place Name Marks Place names also make weak marks and normally will have protection only if they have secondary meaning The trademark will be a bit stronger if the place name is less well known Generic Marks Generic marks identify a category of goods recognized by an industry For digital technology products this would include the terms Works Draw
27. d by the United States Patent and Trademark Office USPTO The system is called the Trademark Electronic Search System or TESS You can find it at www uspto gov TESS includes registered trademarks and applications TESS is free which certainly is a plus However TESS has a number of limitations First it includes only federal registered trademarks and applications and provides no access to other sources Second it provides only alphabetical searching there is no provision for sound alike searching Another tool that you can use is the Web Putting your desired trademark into a search engine such as those offered by Google or Yahoo may lead to other users of trademarks However search engines also lack sound alike searching A more sophisticated tool for searching is Saegis a trademark database search environment provided by Thomson amp Thomson which is a resource used by many law firms for searching To use Saegis you must sign up online to become a sub scriber and pay for online use The advantage of the Thomson amp Thomson databases is that they include both state and federal registered trademarks including pending applications and expired registrations There are also additional resources to search for common law unregistered trademarks The system includes a sound alike searching function In addition Saegis also provides trademark databases for a number of foreign states including Japan Canada and many Europe
28. e the application requires you to give a date for first use of the trademark in commerce that the US Congress may regulate also referred to as the use in commerce date Generally speaking Congress regulates transactions between states of the United States between the United States and foreign countries or involving Essential Actions to Protect Your Trademarks a territory of the United States Therefore the form is asking for the date of first use that fits one of these categories The form also asks for the date of first use anywhere This date will differ from the in commerce date only if there were earlier transactions that were entirely within a single state or solely in a foreign state For product trademarks transactions count to estab lish the date of first use only if the trademark was in fact on the goods involved or for services if the use was in connection with your services Transactions must be for genuine commercial dealings In specifying dates of use be as accurate as possible Check whatever records you have If you are not absolutely sure of the exact dates of first use and first use in commerce use phrases such as no later than Misrepresentations about the dates of use even if inadvertent may render the registration invalid later on If you file an intent to use application you will have to file a later Allegation of Use to show that you are actually using the trademark within stated time frames The
29. ed above to select a new trademark A trademark will have the best legal protection if it is arbitrary or suggestive Most of the marks that are powerful in the computer field have those characteristics Strong marks such as Sun Cisco Intel Oracle and Apple are examples Often new companies are inclined to choose marks that tell the consumer what the product does which means that they will select a weak trademark like Virusafe Short term marketing reasons support this type of choice However the price for picking a weak trademark is that competitors may be able to enter the market with products bearing quite similar names In general lawyers consider that it is best to choose a strong trademark particularly for your company s principle brands Choosing good new marks for technology companies is not easy That is because there are many tech companies with many brands already In addition many companies want the brand and a domain name to be the same and that may be difficult or costly to accomplish Nonetheless the power of brands is strong and it is worth the effort and time to find a good brand name Even the most distinctive trademark will not be protected however if the same or a confusingly similar trademark of another company already has prior ity Therefore before adopting a new product trademark you should understand how trademark priority works and learn how to investigate the other marks that are already out there Obtai
30. ell as domain name registrations and notify you when a similar name appears in an application In addition some companies do a periodic sweep of the Web for infringing trademarks Your attorney can obtain these watch service subscriptions for you It is also a good idea to insist that when another company uses your trademark in an advertisement that refers to your products that the company acknowledges your ownership of the trademark This is the reason that advertisements often in fine print include a listing of the owners of each trademark referred to or some times statements such as Company product and service names are trademarks or service marks of other companies Essential Actions to Protect Your Trademarks If someone mentions your trademark in an advertisement without such an acknowledgment and if it appears that there is a likelihood of confusion about the source of the goods or about whether your company has endorsed the adver tised product it would be a good idea to write to the advertiser and ask that it cease and desist from improper trading on your company s reputation Legal Protection of Famous Trademarks There is another form of protection for trademarks beyond the protection against infringement This form of protection is called anti dilution and it generally applies only to famous trademarks The basic idea is that famous marks may be harmed or diluted by goods that are not confusingly
31. er both English and local language versions of word trademarks For example in China the Microsoft house mark is both Microsoft and these two Chinese words 4X pronounced Wei Ruan The first character means small and delicate suggesting micro and the second means soft Paris Convention and Trademarks As a general rule the priority date for a trademark in most nations is the date of fil ing for of the trademark registration However you can often obtain the benefit of your earlier first filing date in another nation under the Paris Convention This is the short name for The Paris Convention for the Protection of Industrial Property of 1883 The rule is that you can use your first Paris Convention nation trademark priority date in other Paris Convention nations as long as you file in the other nations within six months of your original filing date This means for example you can use your US filing date as your priority date in Japan as long as you file your Japanese application within six months of your US trademark application filing date Most counties in the world are members of the Paris Convention An impor tant exception is Taiwan The European CTM system discussed below also recognizes Paris Convention priority Madrid Protocol The Madrid Protocol is the name of a unified international process for registering trademarks As of this writing about 80 countries around the world including the U
32. es that you can find on the Web Guidelines need to be tailored to fit the particular use of your brand For example branding guidelines for packaging may be quite different than bran ding guide lines for Web sites Included in branding guidelines are typically such items as a Detailed instructions about trademark placement size and color m Rules on correct trademark use similar to those to prevent genericide mentioned above Prohibitions against uses that might taint or dilute the trademark The more important your brands are the tighter branding guidelines need to be Co branding Co branding is the use of more than one trademark on a product or to promote a service Because computer products and Internet services readily combine co branding is a common strategy used in the digital technology business If you buy a Samsung mobile phone from Verizon you will usually find that it has both Verizon and Samsung branding and that it has been programmed to display the Verizon logo on start up The place that co branding is most common is on the Web where suppliers of content or functionality will often obtain secondary branding For example at least as of the time this is written the Automotive page of nytimes com recites that it is provided in partnership with Edmunds com which is an automobile information portal The Edmunds com brand is prominently displayed This tells us that there is a deal between Edmunds and
33. f this kind with a domain name that is similar to your company s brand you should seek legal counsel without delay TRADEMARK INFRINGEMENT LITIGATION For our final topic in this chapter let us take a look at trademark infringement liti gation in the United States If you believe someone has infringed your trademark Trademark Infringement Litigation or if you are accused of using someone else s trademark you should see an attor ney immediately Delay may hurt your case The Litigation Process What do you do if an infringer is using or harming your brand The process normally begins with a cease and desist letter from legal counsel When the infringement is clear the dispute will often be settled before litigation is filed Quite commonly the alleged infringer simply agrees to stop using a trademark immediately or more commonly after a few months transition period However if the alleged infringer of the trademark has some hope of defending its trademark and if it has had considerable success and has earned real money with the trademark litigation may be necessary Sending a cease and desist letter is not completely risk free There is a risk that the alleged infringer will sue first to get the advantage of having the lawsuit in the alleged infringer s home jurisdiction We call this kind of first strike by the accused a declaratory judgment action because the alleged infringer asks the court to declare that it
34. g Consumer Protection Act in November 1999 This Act allowed courts to transfer a domain name that is confusingly similar to a trademark to the owner of the trademark To obtain the domain name the trademark owner is required to establish that the domain name holder acted in bad faith Because litigation is expensive and can be prolonged a more efficient way of dealing with domain name disputes was needed For this reason ICANN cre ated the Uniform Domain Name Dispute Resolution Policy UDNDRP This is a relatively simple arbitration process based on submitted papers and without any testimony Under the UDNDRP a trademark owner can challenge the holder of a domain name If the trademark owner wins the domain name is transferred to the trademark holder In order to win the trademark owner has to persuade the arbitrator that 1 it has a trademark that is the same or substantially similar to the domain name 2 the domain holder does not have a legitimate interest in the domain name and 3 the current domain holder registered in bad faith What counts as proof that a domain is held in bad faith Signs of bad faith owner are m Registering numerous domains that correspond to others brands a Demanding a high price for the domain m Threatening to sell the domain to a competitor The domain owner can defend its position by showing that it had a legitimate reason to register the domain and has used it legitimately If you have a problem o
35. gistration is not rejected by a nation s trademark registration authorities in the time allowed usually within a year it will become effective in that nation The Madrid Protocol system also allows trademark holders to take advantage of Paris Convention priority date rules The Madrid Protocol system can be used to apply for CTM registration in the EU discussed below An international registration under the Madrid system lasts for 10 years from the date of registration and may be renewed for additional 10 year periods by paying a renewal fee at WIPO Sometimes registration under the Madrid System is called an international trademark but it would be more accurate to call it a multinational trademark fil ing system The holder of an effective Madrid Protocol registration gets the same rights as would apply for registration in the member jurisdiction Say for example if you wanted trademark protection in Australia you could apply at the USPTO under the Madrid Protocol and then designate Australia If your application was accepted by WIPO and not rejected by Australia you would have a registration that was equivalent in rights to any trademark that was registered in Australia The Madrid Protocol system is not for every trademark and every company The Madrid Protocol system is quite technical so it is important that the filings be done correctly You should discuss with your trademark attorney whether the Madrid Protocol is right
36. is not infringing For this reason in some cases the trademark holder will sue as the first move While most trademark law suits end quite quickly it is possible for seriously contested cases to cost substantial amounts Proof of secondary meaning or to estab lish the likelihood of confusion may be expensive because it can require customer survey evidence which is costly to produce Proof of distinctiveness customer con fusion and damages all may require expert testimony A contested case between two substantial trademark users can cost hundreds of thousands of dollars Proof of Infringement Generally the owner of the trademark has to prove these elements to establish infringement m That the owner has a valid trademark m That the trademark is distinctive a That the trademark has priority a That there is a likelihood of confusion about the source of the goods bearing the trademarks 95 96 CHAPTER 4 Trademarks and Domain Names Fair Use under Trademark Law In our discussion of copyright law we reviewed the doctrine of fair use a de fense to a claim of copyright infringement There is also a similar fair use defense in trademark law The rationale of fair use in trademark is similar to that in copyright law it is based on the principle that some uses of trademark are consistent with free speech and are not harmful to others trademarks As in copyright law fair use is a defense to a claim of infringeme
37. istrations on both Intel Inside as a word trademark and the familiar Intel Inside logo Logos cover just the particular logo itself If you have used the same text in a new logo the old 77 78 CHAPTER 4 Trademarks and Domain Names registration would not cover it and you would have to file a new application The word trademark registration covers the words themselves and therefore is broader However the word trademark registration would not cover a competi tor s logo that looked very much like yours but used different words If you have a descriptive trademark it may not be possible to get the word trade mark on the Principal Register however it may be easier to register the logo version on the Principal Register because the logo design will supply distinctiveness Trademark Record Keeping in Support of Registration Because the time and manner of your usage of a trademark may be a crucial fac tor in determining priority and may sometimes become an issue in litigation or important in registering a trademark you should as a matter of routine prac tice keep complete sales and shipment documentation for any new product Especially important is your documentation of the first use of the trademark for bona fide commercial transactions and in addition the first use of the trademark in interstate or US foreign commerce It is also important to keep records of the promotional use of each trademark such as samp
38. k is on the Supplemental Register you have the following rights You can bring a federal infringement action in any federal court a You can file a later application for registration on the Principal Register if for example you can prove secondary meaning at that later time a You can use the symbol with your trademark Trademark Classes To make trademarks searchable the patent office has developed a trademark classification system There is also a similar international trademark classifica tion system Trademarks are divided into classes based on business type Each application to register a mark has to specify the applicable class Marks can be and often are registered in more than one class but there is only one class per application US trademark classes that are likely to be relevant to digital technology businesses are a Class 9 Electrical and Scientific Apparatus includes computer and com puter software a Class 35 Advertising and Business includes Web shopping services and Web based advertising services m Class 38 Telecommunications includes traditional telecom and Internet based communications a Class 42 Computer Scientific amp Legal includes technical services such as software and Web development and programming Word Trademarks and Logo Trademarks It is good practice to register both the word and logo forms of trademarks by means of separate applications Intel for example has reg
39. les advertisements and direct mail materials and copies of paid invoices for your promotion and advertising These materials can help establish secondary meaning TRADEMARK REGISTRATION PROCESS The registration process begins with an application filed by an attorney that concentrated in trademark matters You normally would have a trademark search done before you decide whether to file an application although this is not a legal requirement An examiner at the USPTO reviews the application examin ing the trademark s distinctiveness searching for other similar trademarks and scrutinizing evidence of secondary meaning if that is submitted You may recall that in our discussion of software copyrights we said that virtu ally every program and digital work is copyrightable and that you can easily copyright your own software or other digital product yourself The trademark system is different the USPTO rejects or requires changes in a considerable proportion of the trademark applications that it receives Many trademarks do not qualify for registration because they are not distinctive enough and many are dis allowed on the basis of other confusingly similar previously registered trademarks or for other reasons The registration process can slow down if the examiner at the Trademark Registration Process USPTO raises questions about the application as they frequently do Sometimes your attorney can overcome the USPTO s objection
40. nes m Use the trademark together with the product description and make the trademark look different such as AppleWorks Word Processing Program or AppLEWorks Word Processing Program a Do not use the trademark in the possessive Avoid AppleWorks s features a Don t use the trademark as a noun or a verb always use it as an adjective For example refer to Microsoft Excel Spreadsheet Program rather than Microsoft Excel a Always use a trademark notice see discussion later in this chapter on these notices There is a problem with these rules as commonly prescribed They are just too cumbersome to follow religiously For example think how the Microsoft Excel user guide would read if Microsoft had to add the words Spreadsheet Program every time it used the word Excel What many companies do with these rules in real life is compromise The first page of the Excel User Guide may have the words Spreadsheet with Business Graphics and Database but the text just refers to the product as Excel using the trademark as a noun Most software companies reach the same type of compromises and have avoided genericide Carelessly casual use of trademarks is still a risk The bottom line is that every advertisement piece of packaging and manual should make it clear to the reader that your trademark is a trademark Confusingly Similar Marks Preventing customer confusion regarding the source of goods and services is the
41. ning Priority Rights As we have discussed distinctive marks are protected against infringement if they have priority Following are the three ways that distinctive marks get priority Priority from First and Continuous Use To some extent under US state and federal law the user of a trademark may obtain some priority rights to use a trademark just by using it first and continu ously However we do not recommend relying on use to establish priority Here is why a Use alone will provide priority in the United States only in the geographic markets and product markets in which the trademark is actually marketed and known Use does not provide priority in any region where someone else is already using the same or a confusingly similar mark What is a Trademark m Use does not provide priority if the same or a confusingly similar mark has already been registered by someone else in the federal Principal Register before your use began Registration is discussed below a A party relying on use will normally lose to a prior state trademark regis trant of the same or a confusingly similar mark Due to these many limitations relying on use alone to establish priority is not recommended In most foreign nations trademark registration is required and there is no such thing as priority based on use There is more about foreign law priority rules below Priority from Obtaining Federal Intent to Use Registration Federal trademark law ha
42. nt Generally speaking fair use under trademark law permits good faith use of terms that are descriptive of goods or services For example you should be able to advertise that you provide the best buy in consumer software without infringing the trademark of Best Buy stores In addition it is generally held to be a fair use to refer to a competitor s product as in our word processor costs much less than Microsoft Word This is called nominative use because you are using the trademark only to refer to the other product by name Infringement Remedies for Federally Registered Trademark If you have a federally registered trademark and someone uses a confusingly similar trademark what happens when you win a trademark infringement trial in federal court Remedies for infringement can include m Your lost profits due to the infringement or the profits wrongfully made by the infringer whichever is greater a Incase of willful infringement up to three times the actual damages as the court deems just m In egregious cases an award of attorneys fees In addition the court may order the destruction of the improperly labeled goods and of all copies of the improper labels and packaging If the violation is counterfeiting that is if the defendant was using an exact copy of your trademark with the intent to deceive customers the court may also order seizure of the counterfeit goods by the United States Marshall at the
43. ntence are the two concepts at the heart of American trademark law the law generally protects the owner of a distinctive trademark that has priority a A distinctive trademark is one that is capable of distinguishing one company s goods from other similar goods made by someone else Priority generally speaking goes to the first user of the trademark in the relevant market or the owner of a trademark registered with the US federal government The law gives such an owner a remedy in court when someone else without permission uses the same or a similar trademark if customers are likely to be confused about the source of the goods or services Let s now take a closer look at these two concepts Distinctiveness of Trademarks Trademark law protects only distinctive marks Broadly speaking the more distinc tive the trademark the better the legal protection Why does the law emphasize dis tinctiveness The answer is that the law seeks to balance trademark rights on one hand with the freedom to use ordinary language on the other For example only one software business needs to label its goods Symantec but many businesses legitimately need to label a program a Utility Symantec therefore is a strong trademark and Utility is a generic term that has no trademark protection at all In order to understand how to choose a trademark or how much protection an existing trademark can get you have to understand what makes a tr
44. onal materials To give notice of federal registration the symbol is used like this Adobe or IBM If you want instead of the symbol you can use your trademark with the words Registered in U S Patent and Trademark Office or Reg U S Pat amp Tm Off You must use exactly these words Most companies just use the symbol Notice for a Trademark That Is Not Federally Registered If you have an unregistered trademark including one for which there is a pend ing application for registration it is still vitally important to give notice of your trademark For an unregistered trademark you should use the TM symbol For an unregistered service mark use either the SM or the TM symbol These symbols are used like this Works It is illegal to use the symbol in the United States if you do not have federal registration Vigilant Defense of Your Trademark to Prevent Dilution To protect your trademarks a certain degree of vigilance is required The protec tion given to a trademark will be narrowed if you allow other companies to use the same or confusingly similar trademarks It is good practice to send cease and desist letters to infringers and to bring suit where necessary to stop blatant infringement Most companies learn of infringement by chance but you can and should make arrangements for a fee to have a trademark search company monitor all federal and state trademark filings as w
45. ou do not have priority After five years of continuous use after registration and the filing of an affi davit at the USPTO affirming this use the right to use the trademark becomes with certain limited exceptions incontestable This means that even if a prior user then appears in most cases it can do nothing to deprive your company of the right to use the trademark a You may use the symbol with your trademark Supplemental Register The USPTO also maintains a list of trademarks and service marks known as the Supplemental Register The Supplemental Register was originally begun to allow nondistinctive trademarks to gain federal registration which in turn helped owners get protection in foreign countries Even if the USPTO rejects your trademark for the Principal Register the trademark may qualify for the Supplemental Register The benefits from such registration while significant are much more limited Generally the trademarks registered on the Supplemental Register are weak trademarks descriptive surname or geographic trademarks without proven secondary meaning The USPTO will approve an application for registration on the Supplemental Register if the USPTO decides that the trademark meets these criteria Necessity of a Trademark Search before Adopting New Marks a The Trademark is not a generic term a The Trademark is not already registered in the federal system for your field of use by someone else If your trademar
46. proactive in registering and managing your trademarks to secure and expand the trademark space that defines your company and its products and services a 97
47. ral trademark registration generally override any state created rights 71 72 CHAPTER 4 Trademarks and Domain Names NECESSITY OF A TRADEMARK SEARCH BEFORE ADOPTING NEW MARKS Before your company adopts a new trademark or before you can conclude whether it has the right to use its existing trademark s you must find out whether anyone else is already using or has already registered a trademark that is the same or confusingly similar to the one s you want to use Your company also needs to steer clear of famous marks It is your obligation to find out whether a trade mark that you wish to use is available It is not a defense when you get sued for trademark infringement that you did not know that you were infringing another owner s trademark There are thousands of computer products and hundreds of thousands of trademarks used in other products How do you find out if the trademark you want to use is available The answer is that you must do a trademark search A trademark search is also the normal first step toward filing for federal registration If as a result of the search you find that a trademark you want to use is con fusingly similar to an existing trademark in your business or trade channels you may be blocked Sometimes you can get permission to use the mark from the holder of the pre existing trademark but often you will be forced to choose another mark Your attorney can help you decide the best strategy
48. road as part of an international expan sion strategy It is absolutely essential Many foreign jurisdictions permit broader trademark descriptions in trade mark filings for software products and services than would be permitted by the USPTO A company might register its trademark in the EU for soft ware and thereby get a trademark that covers all kinds of software from games to operating systems That would never fly in the United States The USPTO allows trademarks to be registered only for a particular type of soft wate The broad trademark filings allowed in many foreign jurisdictions increase the risk that your trademark may be blocked abroad It makes it even more important to get your trademark applications on file in foreign jurisdictions as early as possible There is an international registration system that covers many countries under the Madrid Protocol discussed below And there is a EU wide trade mark system known as the Community Trademark also discussed below Taking Trademarks Global Some words and symbols that are acceptable in American English may sound odd funny improper or offensive in other languages A famous example is the Chevy Nova automobile which became a joke in Spanish speaking countries because No va means It doesn t go You need to check out trademarks with native speakers in each jurisdiction In countries that use symbols other than roman letters you may want to regist
49. s a provision under which a trademark application can be filed even before first use with the result that the registrant normally gets nationwide priority from the application date if the trademark meets the legal requirements for federal registration Before making any heavy invest ment in a trademark prudent companies take the precaution of filing an intent to use application for trademark registration on the federal Principal Register The registration process is explained below We strongly recommend intent to use filings before you introduce any significant trademark or family of trademarks This is the smartest way to get priority You will need to check first to be sure that the mark is available See the discussion of trademark searches below Most foreign nations also permit pre use registration and as noted in most nations registration is the only way to obtain priority Priority from Federal Registration after Use If you are the first user and your trademark meets the legal qualifications regarding distinctiveness you can normally extend priority for your trademark throughout the United States by registration on the federal Principal Register If you have trademarks that are important to your business you should get them registered Most states have their own copyright registration laws but these are of very limited utility Rights granted by state statutes are limited to the state s bor ders and rights created by fede
50. s to registration and some times not In some cases the description of the trademark use is narrowed in the process If the examiner determines that the trademark passes muster it is then pub lished in the Official Gazette a government publication With luck after publica tion no one will file an opposition to the registration Then the USPTO will issue you a Certificate of Registration As of this writing the time from the filing of the application to the issuance of a certificate absent any opposition is approxi mately 15 months If you are not so lucky someone will file an objection to the registration The USPTO will then conduct proceedings over a period of months to resolve the objection Your trademark counsel will represent you in this process If there is a conflict over the right to use the trademark between two companies that want to register it the company that used the trademark first usually prevails Appeals to the federal court system seeking review of USPTO decisions are also possible and will drive the legal costs higher still If all objections are rejected the USPTO will register the trademark Keeping Your Federal Registration In Effect Once you have registered a trademark if you want to keep your registration in effect you must continue to use the trademark Nonuse for two years often is presumed to be abandonment of a trademark In addition to keep your trademark registered you must submit an Affidavit of
51. s want to register a domain name as a trademark The USPTO will permit this but only if the applicant provides exemplars that show the domain name actually being used as a service mark Salesforce com for example is clearly being used as the brand for an online sales force manage ment service So saleforce com would qualify Contrast General Motors use of em com which is not a service mark but rather only as an address for the company s Web site This means that trademark registration is likely to be available to companies that engage in e commerce or offer services through the Internet Note however that the USPTO will likely reject trademark registration for domains name that are generic or highly descriptive such as homefinder com or computers com Cybersquatters and Remedies It is less a common problem now but in the 90s there were a number of individu als and companies that registered domain names and held them for ransom hoping that legitimate trademark owners would pay large sums for them There 93 94 CHAPTER 4 Trademarks and Domain Names were public disputes when individuals registered mcdonalds com mtv com and other domains that include famous trademarks This kind of bad faith registration of domains is known as cybersquatting Cybersquatting cases were at first dealt with under trademark law Congress under pressure from brand owners then enacted the Anticybersquattin
52. see pays the licensee for use of the brand This is for a situation where the licensor s brand is valu able and the licensee expects to be able to increase sales and prices by use of a well known trademark Exploiting Trademarks in Distribution Licensing and Other Deals Trademark Transfers When companies are sold trademarks are usually important assets The buyer will normally conduct due diligence into the seller s trademarks to confirm that they have been property protected Properly protected marks make companies worth more Generally speaking under US law you can only transfer trademarks together with the product rights and the customer goodwill to which the trademarks relate This is because the transfer of the trademark by itself would like naked licensing discussed above be treated as an abandonment of the trademark If you are starting a business and want to buy someone s trademark be sure to remember this rule The Web makes national and global publishing cheap This means that the cost of introducing and promoting new branded products has gone down m The Web also makes it easy to offer products and services in remote loca tions This makes national or international brands that in an earlier time would have been purely local a The Web is indexed by the major search engines such as Google and Yahoo and since search engines are free new brands are readily discoverable In the age of the
53. similar but that tar nish or blur the famous trademark Federal law generally allows the holder of a famous trademark to enjoin use of the diluting trademark There are also state laws that protect against dilution of famous marks Here is an example of tarnishing a famous trademark Hasbro Inc is a toy company that publishes the child s game Candyland In 1996 a company known as Internet Entertainment Group Ltd IEG began to use the trademark Candyland and the domain name candyland com for a sexually explicit Web site When Hasbro sued IEG Hasbro was not claiming that the consumers were confused about the source of the soft porn Web site Rather Hasbro s claim was that the use of the brand Candyland for selling sex was tarnishing Hasbro s own Candyland trademark IEG lost the case and the court ordered IEG to cease use of the Candyland trademark and to turn over the candyland com domain to Hasbro Blurring is a similar dilution theory Blurring typically refers to the whit tling away of distinctiveness of a famous trademark It would be blurring for example for you to use the brand Google as a brand name for a line of books even if Google is not in the book publishing market How do the courts decide if a trademark is famous To some extent it is common sense and common knowledge Relevant factors include Duration and extent of use of the trademark a Duration and extent of
54. stop competitors from using or blurring the name and repu tation that it has established When you sell your company its value will be much greater if it has a well known and legally protected brand Trademark Risks Bad things can happen if you neglect trademark law For example if you do not take proper steps under trademark law m You could introduce a new product and be forced to withdraw it until you change its branding m A competitor could start eroding your business and confusing customers by using your trademark or one that looks confusingly similar to your trademark You might not be able to stop it from doing so This chapter will help you avoid these disruptive results Company Names vs Trademarks Company names also known as trade names may often be very similar to trademarks but they are not the same For example Sun Microsystems Inc is a company name The United States Trademark and Patent Office site has a trade mark search function that shows that Sun has more than 150 trademarks regis tered in the United States These trademarks include Solaris Sparc Java Sun and Sun Microsystems However Sun Microsystems Inc is not claimed as a trademark When a company has a main trademark that is used across a line of products or services such as Sun Nokia or Motorola it is commonly called a house mark What is a Trademark Scope of Legal Protection Here in one se
55. such as Powered by XYZ Packaging You could require that your branding be included on the pack aging of the licensee s product Public Display You could require that the licensee feature your branding at its trade show exhibit and mention your product in its trade show public presentations of its product Advertisements You could require that your brand be included in adver tisements for the licensee s product and on its Web site Where an agreement has these kinds of mandatory branding provisions the licensor imposes binding guidelines for trademark use of the type discussed above The brand owner may also require an opportunity to review and approve materials and advertisements that use its brands 89 c 90 CHAPTER 4 Trademarks and Domain Names Trademark Licensing Sometimes companies simply license their trademark to another company for its use on the licensee s products This type of licensing is quite common for use of famous marks on consumer products think Duke Blue Devil t shirts This kind of licensing occurs with some digital technology consumer products For example you can purchase Polaroid brand electronic cameras but they are not made by Polaroid Rather the owner of the Polaroid brand a company called Petters Group Worldwide has licensed the brand to a distributor of cameras Video game companies do a lot of trademark branding along with licensing of content When licensing a trademark
56. the New York Times under which Edmunds provides access to its portal content and functionality and the parties share resulting revenue Exploiting Trademarks in Distribution Licensing and Other Deals Combined Trademarks Co branding can take the form of trademark combinations An example is the ATT Yahoo DSL Internet service The branding combines the ATT brand with that of Yahoo the Internet portal ATT is the company that actually provides the DSL service Yahoo markets online services under the ATT Yahoo brand to its customers The combined brand is used by both parties From a legal per spective combined trademarks are tricky because they involve creation of new trademarks in which each party may own only in part Creation of these com bined marks requires carefully drafted agreed rules on ownership registration and use Branded Components Let s say that you make component software and that you license your software for a license fee for inclusion in another software vendor s product If you have sufficient leverage in the deal there are a number of different ways in which you could require under the license agreement to promote your trademark For example Brand Display You could require that your branding be prominently displayed on the licensee s product interface for example on the main interface screen or splash screen Often this is done with a phrase suggesting a technology supply relationship
57. the licensor must have trademark guidelines and the contractual right to monitor the quality of the licensed goods and to pre vent licensing from continuing if quality is not maintained Where licensing is done without control of the licensed goods called naked licensing itis treated under US law as an abandonment of the trademark Abandonment can lead to loss of all trademark rights and the cancellation of trademark registration This means that a bad license agreement may kill the trademark Generally brand licensors keep control in two ways they inspect the goods for quality and they have strict trademark guidelines Your lawyer can help put the right clauses in place To help you with trademark licensing we have included two sample trade mark license agreement forms in the Appendix to this book m Form 4 1 is for a royalty free trademark licensing agreement This form is designed for the situation in which a licensor has component software that is included in the licensee s software product and the licensor wants to per mit the licensee to use the licensor s branding on the resulting product This form is for the kind of trademark licensing strategy under which Intel allowed PC makers to use its Intel Inside branding This form agreement is written to be permissive the Licensee may use the branding but could be made mandatory the Licensee must use the branding Form 4 2 is for a royalty bearing arrangement The licen
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