What Is An Acceptable Business Risk For Your Business?

Think you got an idea> Give Reading Word's The dark side of IP a read.

Business people often scoff at lawyers that "you have to take risks in business." True, but the risks should be valid risks: venturing the new product, entering the new market, changing up the marketing and ad campaign, leveraging up for growth tomorrow. Unacceptable risks should be those which introduce fines and penalties, complex litigation and jail time. Many businesses rarely think of the dark side, the flip side of their IP: On whom might you be infringing with what consequences? The reality is that if you do infringe, it will be expensive, time consuming and ruinous to your model. They can shut you down and take your profits. Don't consider this an acceptable business risk. Get the evaluations you need.

I know you don't like thinking about IP rights: they're complicated, uncertain and seem to cost you coming and going, for filing and defense. You tend to protect and defend what you can and leave the rest to fate, calling it risk. Don't. You have talked to the lawyers and have got a lesson in costs. A patent can cost $50,000 and up and may yet not issue or may may be invalidated, and the invention may yet infringe. After all the development costs for your goods and services, patents, and trademarks and copyrights are expensive to defend. Many businesses tread skeptically. Many choose to protect their inventions as trade secrets and close their eyes to much of the real world fate of their IP.

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Think about how quickly you can be shut down and your profits stripped should your product be ruled to infringe, even a seemingly old, obscure patent. Unless you examine your work honestly according to the reality of IP law, you too run the risk of high damages and costs and being shut down. You need to pay those few thousand dollars at the front end before you go out on a limb and have experts examine the real world for patents, trademarks and copyrights which your products and creations might infringe.

Do you have any ideas what legal woes your business may be sitting on? By the time you think you need a lawyer, the mess may be big enough to swallow the business whole. An ounce of prevention....

Logos and Trademarking

David Airey's blog has an interesting post in Logo trademarking tips: A legal perspective

But, before addressing the legal implications, it’s worth noting that a number of our insightful readers and commenters have already helped articulate a variety of pros and cons from a business and marketing perspective (view the comments on Duets Blog). By my count, there appears to be consensus on at least two important points:

1. Having an iconic stand-alone non-verbal logo or wordless trademark symbol is highly desirable, especially for truly international brands; but
2. be prepared to spend a lot of time, effort, and significant resources to achieve one.

Logo trademarking tips: A legal perspective | David Airey, graphic designer

The combination logo is your best bet for trademarking

Generally, this format and style is more flexible, easier to clear for adoption and use, easier to register and protect each element separately, and easier to enforce rights in both verbal and non-verbal elements.

With respect to enhanced flexibility, a trademark owner can elect to always use the verbal and non-verbal elements together, perhaps as a way of reducing the risk of infringing on another’s prior rights in a mark perhaps similar to either the verbal or non-verbal element.

It may also be worth taking a look at "NO FRIGGIN CLUE" Confusingly Similar to "CLUE" for Video Games, Says TTAB from The TTABlog

Trademarks Post for the Week

British but some concept cross over the Atlantic and it is a well written article that provokes some thoughts. So take a look at Pitcher's, Pimms, Passing Off

Archbishop Passing Off is already robing up behind the drinks counter to enter the unholy fray with his ‘holy trinty’ of Reputation, Confusion and Damage but who will survive the refining fire of this test?

Is Sainsbury’s passing off its product as that of Diageo? Is there a trade mark infringement?

Surely, no problem with Reputation. Pimm’s has established itself globally as an iconic brand, synonymous with Wimbledon, Henley, May Balls, picnics (see Twitter #VTPP) and all that is sacred about the British Summer.

And, surely, no issue with Damage. One can almost see the out-stretched hand of the thirsty British consumer waivering and submitting momentarily to curiousity and the lower price tag of the Sainsbury’s ‘equivalent’ with huge consequential loss for Diageo.

So the legal armies must face each other on the uncertain legal battle-field of Confusion. But is there really any Confusion? The name is similar and theSainsbury’s product clearly echoes (deafeningly!) the Pimm’s brand ..but we are not talking puffins and penguins here. The product is pretty obviously not the original although it is clearly trading off its reputation.

Paul McCartney Upset Over Not Getting Beatles Rights?

A bit stale probably, but guardian.co.uk's Paul McCartney 'not devastated' over Michael Jackson will seemed to good let pass without comment,

"Some time ago, the media came up with the idea that Michael Jackson was going to leave his share in the Beatles' songs to me in his will," McCartney wrote on his website. "[It] was completely made up."

That "idea" was first reported by the Mirror in January. Jackson, their source alleged, had decided to build bridges with McCartney by drawing up a new will that left him his share of the Beatles' back catalogue. But after Jackson's death on 25 June, there was no sign of this will – and the singer's assets were all left to a trust.

"The report is that I am devastated to find that he didn't leave the songs to me," McCartney wrote. "This is completely untrue. I had not thought for one minute that the original report [about the will] was true, and therefore the report that I'm devastated is also totally false."

First, let us all remember that Paul is a businessman. I think that was one of the complaints about him when the Beatles broke up (back in those days before The Flood).

Second, I think it has become increasingly clear that Michael Jackson was not too shabby at handling his business.

Third, regardless of what you might think, trademarks are an asset, a type of property, stuff that belongs to whoever is the copyholder.

Copyrights are not to be just given away. Of all the people who know this, the ones who may know this best are writers. I guess music writers know this less.

Trademarking Tweet

PC Magazine's Twitter Trying to Trademark 'Tweet' is one of those items that make me wonder what the wider world thinks of lawyers and trademarks. Thankfully, this article does note that we lawyers act defensively as well as offensively (no pun intended).

Twitter has attempted to trademark the term "tweet," although the company's founder said it was purely a defensive measure.

If "confusing and potentially damaging projects" emerge, co-founder Biz Stone said in a blog post, then Twitter may take action.

Otherwise, "really awesome" applications that use the term "tweet" are safe, including TweetDeck, TweetMeme, Tweetie, BackTweets, Tweetboard, Stone wrote.

Stone's blog post was a response to a email that began circulating, citing concerns Twitter allegedly had with a third-party app's user interface (UI) and name.

"We have applied to trademark Tweet because it is clearly attached to Twitter from a brand perspective but we have no intention of "going after" the wonderful applications and services that use the word in their name when associated with Twitter," Stone wrote. "In fact, we encourage the use of the word Tweet. However, if we come across a confusing or damaging project, the recourse to act responsibly to protect both users and our brand is important."

Trademarks - Franklin College Suit From Start to Quick Finish

I learned of the Franklin College trademark case from The Indianapolis Business' College sues like-named competitor and, frankly, did not hold out much hope for the interloper.

The confusion has finally gotten to Franklin College.

The liberal arts college south of Indianapolis filed a lawsuit today alleging trademark infringement against Ohio-based Franklin University, which will open a campus in Castleton this fall.

Franklin University has run a heavy advertising campaign to mark its entrance into Indianapolis. But Franklin College said the marketing blitz has been too close to Franklin College's own branding.

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Moseley said that since Franklin University's advertising began in May, Franklin College has received many calls, comments and e-mail messages asking why the school has changed its name or whether it has opened a satellite office for online courses. He also complained that the colors and clock tower in some Franklin University ads are strikingly similar to Franklin College's logo.

"We have great concerns about the impact of the obvious confusion, especially with prospective students and employers of our alumni," Moseley stated.

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In an interview in June, Linda Steele, vice president of marketing for Franklin University, said the school never considered operating under a different name than Franklin in Indianapolis.

"The Franklin College issue came up and we really did have to take a step back and ask the question whether that is a showstopper," Steele said. "Obviously, we think not, because we chose to go forward."

Well, here is the report from The Indiana Lawyer Blog noting that the suit has been settled and has a link to the settlement agreement. Reading the settelment agreement, I think everyone will see a sensible solution that works for the benefit of both parties and also resolves the problem. It may be a bit snarky but perhaps a bit of training on trademarks for the marketing division?

Jimi Hendrix and Trademarks

I admit to being a fan of both trademarks and Jimi Hendrix. Which made noting Ron Coleman's post “Excuse me while I kiss this guy” from his blog LIKELIHOOD OF CONFUSION® a no-brainer:

The signature was a trademark? It had secondary meaning? I think maybe John Hancock’s signature has secondary meaning, but I can’t think of too many other ones, though I am sure there are. But Hendrix’s? Here’s the reasoning, per Mike’s excerpt from the opinion:

During oral argument, counsel for defendants indicated that defendants are now confining their use of the signature to posters, fine art prints, and apparel. The Court interprets counsel’s remark as a concession that defendants’ use of Jimi Hendrix’s signature constitutes branding, and it is not exempted from infringement liability by either the nominative or the classic fair use doctrine.

“Branding” — “infringement” — “liabilty” — “fair use” — all very interesting concepts.

But they only apply to trademarks, Your Honor! How you got a trademark here?

Patents, Trademarks and Hamburgers: Steak n Shake Settles With Burger King

Steak n Shake, Burger King settle lawsuit:

"Steak n Shake Co. has changing the name of its miniature Steakburgers to settle a trademark-infringement lawsuit brought by Miami-based Burger King Corp.

The Indianapolis-based chain was slapped with a lawsuit last month after it unveiled slider-style hamburgers called Steakburger Shots, a moniker Burger King said was 'confusingly similar' to its trademarked BK Burger Shots, BK Breakfast Shots and BK Chicken Shots.

The mini-burgers at Steak n Shake now are known as Shooters.

Steak n Shake CEO Sardar Biglari said at the chain's annual meeting Friday that he simply called Burger King CEO John Chidsey and worked out the dispute over the phone.

In the lawsuit, Burger King had said it registered the names with the U.S. Patent and Trademark Office and began promoting them in February 2008, well before its competitor unveiled 'identical' products."

Fun With Restaurant Reviews and Trademarks

I find trademarks as too much fun and here is another example from The New York Times of what I find interest Lawyers Enter Twitter Tempest

Mr. Rucinsky, a 30-year-old part-time art dealer who uses his middle name as his last name when he writes, sends silly blurbs on Twitter and writes inane blog postings that purport to reflect Ms. Freeman’s musings about New York City restaurants, like “Governor of Texas raving about Secession on TV all week. Must be great word of mouth for Bouley!” His fake Restaurant Girl also ventures into more cosmic concerns: “Does anyone know what happens to all the chocolate bunnies no one bought for Easter? Are they put to sleep?”

To try to put a stop to it all, Ms. Freeman had lawyers from a Beverly Hills firm send Mr. Rucinsky a stern letter ordering him to stop using the names Restaurant Girl and Danyelle Freeman by the end of this month.

His joke infringes on her rights to her trademark, Restaurant Girl, the lawyers wrote. He should stop using that name or Ms. Freeman’s name in parody form on the Internet, the letter said.

Mr. Rucinsky, who has been talking to his own lawyers and doesn’t plan to budge, said he started the Twitter parody and a subsequent blog as a creative writing exercise. He thought he had found a rich target in Ms. Freeman’s style, which melds the top-of-the-head immediacy of a blog with the breezy tone of a late-night phone call from a friend on her way home from a night of sangria and tacos.

The Times describes the legal issue quite well:

One question is whether Mr. Rucinsky’s writing exercise, with a few more than 300 followers on Twitter and minimal blog traffic, is legitimate parody. Or does he mimic Ms. Freeman so closely that, despite recent disclaimers on his sites, a reasonable reader might not be able to tell the difference?

The Times provides links to the allegedly offending blogsThe Gourmet Glossary, and THE LIFE VICARIOUS.  Here is the Twitter profile.

On The Life Vicarious' And you probably thought Restaurant Girl's writing was criminal, there is a copy of the cease and desist letter and wherein the parodist makes the greatest argument against what the target of the parody's actions:

Can't she just take a fucking joke? It's a Twitter feed. It makes people laugh. Her own writers among them. And they're laughing with us. But really, if she really wants people to laugh at her instead this is the way to do it. Nothing says you're a competent blogger, future author and professional critic for a national newspaper than retaining a law firm to quash a reader's sense of humor.

What may be legally possible does not always translate into what makes good business sense.  Remember that it was The People vs. Larry Flynt and not the People vs. Jerry Falwell.  Or to not be less subtle:  don't wallow with the hogs unless you want to smell like a hog.

Octomom's Trademark Filing

I posted a draft of this earlier. My apologies.

I find this filing interesting for two reasons. First, as, noted below, Ms. Sulemen, chose a method which might leave her without any protection - that would seem not to be good for business.

Second, I have never before seen a situation where the mere filing of a trademark was itself the apparent goal of a marketing campaign rather being meant to protect a business interest when marketing a product or service.

JD Supra: Legal Documents - 77711827 | Other

I do not think Ms. Sulemen has yet used the term OCTOMOM as a trademark to identify the products/services listed in her application. It is interesting that the application contains a consent stating "The name(s), portrait(s), and/or signature(s) shown in the mark identifies Nadya Suleman, whose consent(s) to register is made of record." By including that consent, has Ms. Suleman just made her trademark battle more difficult? Why? Because she may have just filed information in which the trademark examiner could argue her use is somehow a surname, generic or descriptive????

Because the applications filed by Ms. Suleman and the company in Austin are intent to use, the priorty of filing goes to the first to file, which is not Ms. Suleman. This will be interesting to follow.

For anyone else thinking like Sushaf, I suggest reading up on the Lexis-Lexus case. The Wikiepdia has this to say about the case:

When Toyota launched the Lexus line of luxury vehicles in 1987, Mead Data Central sued for trademark infringement on the theory that consumers of upscale products such as lawyers would confuse Lexus with Lexis. A market research survey was undertaken at the time, asking consumers to identify "Lexis" (it was only spoken); the survey showed that a minuscule quantity of people thought of the computerized legal search system, a similarly minuscule number thought of Toyota's luxury car division, and an overwhelming plurality thought of a soap opera character. Mead lost on appeal in 1989 when the Court of Appeals for the 2nd Circuit held that there was little chance of consumer confusion. Today, the two companies have an amiable business relationship, and in 2002 implemented a joint promotion called "Win A Lexus On Lexis!"

(See here for more background).

No, this is catnip for trademark litigators.

Update on Bratz case

An update on a case I wrote about here. From Corporate Counsel Center - News:

"RIVERSIDE, Calif. (AP) - The judge who barred MGA Entertainment Inc. from selling or making its popular Bratz dolls agreed Tuesday to extend a deadline he set for the company to take the products off store shelves.

MGA, which was initially told to stop selling Bratz by Feb. 11, had argued in court that retailers would not order the toys unless the court could guarantee they would remain in stores through most of 2009. U.S. District Judge Stephen Larson obliged, and allowed MGA to file a motion for a later deadline by next week.

'Given the clear importance of the Bratz line to MGA's financial health, it's not a big leap to see that (the February deadline) would have significant economic impact on the viability of MGA,' Larson said."

Trademarks and Cigars

Both are interests of mine but I wish I could find more time to read Cigar Law.

What I am finding as interesting as the subject matter is the style. The writer is managing to get actual PDF documents into Blogger using Scribed. Now that is a feature I will have to check out and see what I can do for this blog!

Trademarks: Phase 10 Goes to Court for Copyright Infringement

Inventor’s lawsuit sets up high-stakes fight

In the world of card games, Phase 10 is a whale. About 3 million copies of the rummy variation are sold each year, second only to Uno. The game has been the top seller for Plainfield-based Fundex Games Ltd. for years.

But now the 50-employee company has been dealt a wild card: The man who created Phase 10 in 1982, Michigan resident Kenneth Johnson, is suing to yank the firm’s rights to make and market the game.

Johnson accuses Fundex of copyright infringement, trademark dilution, fraud, conversion and theft in the suit, which was filed in December in U.S. District Court in Indianapolis. Johnson claims the privately held company has withheld royalties, granted sub-licenses without his consent, failed to include Johnson’s copyright notice on card games, and registered the Phase 10 mark for itself in the United Kingdom and France.

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The principals of Fundex struck a deal for the game in 1986, paying Johnson a flat $60,000 and assigning him royalties on all future sales. The parties amended the agreement in 1996 and 2003, but the gist remained the same: Fundex had the right to market and sell Phase 10 and the first right to market new products related to the game, in exchange for royalty payments.

The lawsuit says Johnson discovered in the summer of 2008 that Fundex wasn’t living up to its end of the deal. He spelled out his concerns in two letters to the company. And he notified Fundex of plans to review its records on Phase 10, as allowed in the contract, but when his auditors arrived a month later the company refused to provide the requested information.

So Johnson, who received a trademark for the game in 1994, told the company on Nov. 1 that he was canceling the deal. When Fundex continued to market and sell the game, he filed suit. The featured game on Fundex’s Web site at press time was a board game called “Phase 10 Twist.”

Notice that Johnson trademarked the game after he first entered into the contract. I found that the outstanding fact, an odd fact but which gives him the big stick in this case.

Trademarks: Barbie Beats Bratz

I do like a good trademark fight. The London Times Online reports Barbie triumphs over Bratz in court battle:

"An uneasy peace returned to the dolls' house this week after a prim and proper Barbie finally repelled a four-year siege by an unruly gang of gatecrashers called Yasmine, Chloe, Sasha and Jade.

In what could be the decisive blow in a multi-billion dollar legal battle, a California judge ordered MGA Entertainment to halt production of its Bratz dolls after a jury decided that they infringed copyrights owned by Mattel, owner of arch-rival Barbie."

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“Mattel has established its exclusive rights to the Bratz drawings and the court has found that hundreds of the MGA products — including all the currently available core female fashion dolls Mattel was able to locate in the marketplace — infringe those rights,” Judge Larson said in the ruling.

He also ordered MGA to recall all Bratz dolls from toyshops and distributors but gave the manufacturer a seven-week grace period, allowing them to stay on the shelves over the crucial Christmas period.

The judge also ruled out the possibility of an arrangement whereby MGA might continue to produce Bratz dolls but pay a royalty to Mattel for using its copyright, a common solution in similar US intellectual property disputes.

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In August, a court ruled that Carter Bryant, the creator of Bratz, came up with the concept while working for Mattel, where he was a Barbie designer.

A jury subsequently ruled that Mr Bryant had secretly sold the Bratz concept to MGA and the court awarded the majority of the rights to Mattel, with £100 million in damages.

What you done to protect your intellectual property? Think about the losses to MGA and ask if your company could survive this kind of loss. If not, get yourself to a lawyer ASAP.

Patent and Trademark Glossary

The federal Patent and Trademark Office has an online glossary of legal terms. I find this interesting on several levels. Mark it down as a useful too.

Glossary

An alphabetized, hyperlinked glossary of terms used on the USPTO web site and a continual "work in progress"- suggest terms for the glossary to the webmaster@uspto.gov (Note - plain links go to related definitions on this page, italicized links go to supplemental materials on the website.)

From what I have seen, our tax dollars were put to good use. Take this definition of "abandonment" as an example. Notice the use of hyperlinks making this not a dead-end for research but part of a vital system. Also, it is rather well written.

A trademark application that has been declared abandoned is "dead" and no longer pending. Abandonment occurs under several circumstances. The most common reason is when the USPTO does not receive a response to an Office Action letter from an applicant within 6 months from the date the Office action letter was mailed. Another instance is when the USPTO does not receive a Statement of Use (or request for an extension of time to file a statement of use) from an applicant within 6 months from the issuance of a Notice of Allowance). Applications abandoned for failure to respond to an Office Action or a Notice of Allowance can be revived or reinstated in certain circumstances. For more information, see Petition to Revive and Request for Reinstatement.

Trademarks and Web Pages

Thanks to Wisconsin Business Law and Litigation Blog for leading me to Secret Trademark Violations. I thought this subject had been decided a while back as being a bed idea. I guess no idea, no matter how bad, ever goes away if it promises some profit.

There has long been debate about whether a competitor’s trademark, when used as a meta tag or is elsewhere hidden on a web page like a subliminal Internet message, constitutes a willful infringement of that competitor’s trademark. A recent First Circuit Court of Appeals decision now says it does (Venture Tape Corp. v. Mcgills Glass Warehouse).

It’s something you might want to let your webmaster and web designer know because “willful” infringement raises the ante considerably. The penalty for violation ranges up to $1 million per violation.

Smart business owners and managers know that trademarks are powerful tools for protecting their brand platform. The smartest ones will use them wisely and fairly. Don’t let a hidden meta tag turn into a huge hidden liability for your company.

My point being that the profit seen probably vanishes somewhere between quick and even quicker when served with a federal summons for a trademark violation.

For those interested (and that should be online businesses and web developers in particular), keep an eye on Wisconsin Business Law and Litigation Blog's WEbsite coding and willful TM infringement wherein is asked the question: What is the simplest way to scan code for these marks?

Follow up on Larry Bird Suit

I wrote about this lawsuit here and it is settled:

Bird settles French Lick lawsuit

Larry Bird has settled a lawsuit against a bed-and-breakfast that operates from his boyhood home in the southern Indiana town of French Lick.

Attorneys for the basketball icon and Legend of French Lick LLC would not discuss the settlement, saying the parties had signed a confidentiality agreement.

The Web site of Legend of French Lick Resort carries a disclaimer saying the resort is "not affiliated with, or endorsed or sponsored by Larry Bird or the Larry Joe Bird Revocable Living Trust." It was not immediately clear whether the disclaimer was used prior to the settlement, which was closed yesterday.

The Importance of Protecting Domain Names

Traverse Legal Blog makes a very good point in its Lawyers Protect Brands & Trademarks In Cyberspace. Call this another example of preventive law or how lawyers can protect a business on a front unknown to the business owner.

If a Business’ Brand is its Greatest Asset... - Domain Name News, The Domain Industry News, ICANN News, Registry News, Domainer News, Domain:

"Matt Asay for Cnet published an article called “Ten things the world can learn from open source “. It is simply a great read for any business owner and additionally, there’s a domain related angle which should be added here.

'A business’ brand is its greatest asset in driving sales. Not its IP. Not its sales team. Brand. Brand is what gives a customer trust that the product (and service behind it) is worth buying, even when another product is cheaper, easier, etc. Vendors need to invest heavily in their brands (through public relations, for example), and it’s the primary area that lawyers become supremely helpful, i.e., through trademark law. A brand should be earned and protected at all costs.'

I also suggest reading Protecting Your Trademark is Protecting Your Goodwill

A Follow up of Sorts to "What is in a name? A lawsuit!"

I mentioned Morton's Pub & Grub in What is in a name? A lawsuit!. Today's Muncie Star Press reports the business is closing.

Another downtown eatery that went public with its struggles to find and keep customers has closed.

Morton’s Pub & Grub will close after July 19, owners Ty and Stacy Morton announced today.

Sometimes the marketplace and not the courtroom is the best defense against another business. In the earlier post, Morton's Steakhouse sent out a letter to protect its trademark. Legal, perhaps even necessary, but one which had (has?) the potential to make Morton's look a bit silly to the general public.

Trademarks and Larry Bird

News from The Indiana Daily Lawyer about a new trademark case out of Indiana. Larry Bird sues over use of name and I am hard put to think of another name in this state and especially in French Lick which lead to this kind of lawsuit.

"Bird filed the suit, Larry Bird v. Legend of French Lick LLC, No. 4:08-CV-0070-DFH-WGH, in the U.S. District Court, Southern District of Indiana, New Albany Division Monday against Georgianna Lincoln and Christopher Cooke, who purchased Bird's childhood home in French Lick from the Larry Joe Bird Revocable Living Trust.

The two marketed the property as a bed and breakfast, promoting the house as, 'Legend of French Lick, the Former Home of Larry Bird Resort.' The two also attempted to purchase memorabilia from Bird and wanted to use his name to identify the house; those requests were denied.

The lawsuit seeks to stop Lincoln and Cooke's unauthorized use of Bird's name in violation of federal trademark laws and state publicity laws. Bird has registered his name as a trademark with the U.S. Patent and Trademark Office, according to the suit. The suit also seeks damages for the improper use of his name and for the impoundment and turnover of certain properties the defendants used improperly."

I wish I had a bit more time to dig into this one. I am a bit surprised that the seller did not impose some limitations on the buyers that might have prevented this suit. Does it seem like such a stretch of the imagination to think the buyer of Larry Bird's childhood home would not try to use the home to make money based on that association? Or that the seller would react in this way? I think not.

10/19/2008: Update - the lawsuit settled.