Showing posts with label trademarks. Show all posts
Showing posts with label trademarks. Show all posts
Sunday, September 30, 2018
Wednesday, July 5, 2017
The Sky Report. Our newsletter for June 2016. The importance of use in trademarks. Use is everything.
Saturday, June 3, 2017
May 2017 Newsletter - What is a family of trademarks
Our latest newsletter - the May 2017 Sky Report Article is on trademark families.
Monday, January 18, 2016
Our newsletter, The Sky Report, addresses trademarks and how business owners need to think about them. Click here: "Don't use trademark as a verb:What is important in trademark law".
Sunday, September 15, 2013
Employee Theft is Rampant
Employee theft has become a rampant problem. Several our of clients have had employees steal customer lists, designs, website content, and other intellectual property. Other clients have been embezzled. Thieving employees have become more sophisticated in looking for ways to access confidential information.
Once the theft has happened, it is almost impossible to undo the damage. I have seen cases of substantial embezzlement of money not investigated by the police. Intellectual property theft is never prosecuted. IP theft is also difficult to litigate. Trade secret theft is difficult to prove since proving something is a trade secret is difficult. Trademarks and copyrights must be registered before they are infringed to effectively bring suit. Non-disclosure agreements and confidentiality agreements are often not enforceable.
Business owners must be very proactive today. Some suggestions to business owners regarding their intellectual property:
1. Assume your workers (employees, consultants, contractors) are going to rip you off. Sooner or later, one of your workers is going to try to take confidential information or steal from you.
2. Have all persons who work for you sign carefully drafted, detailed non-disclosure agreements, consulting contracts and employment contracts. Do not make them over broad but tailor them to your business and IP that you have.
3. Make an assessment of your IP. What do information, content, formulas, customer lists, etc. do you have? Look at where it is stored and who has access to it. How is it controlled?
4. Make and implement and IP Protection Plan. Your plan should include:
a. Labeling trade secrets as such (e.g. putting a watermark labelled "Trade Secret of XYZ, Inc." on such information).
b. Revising NDA's and other contracts to specify information that is confidential and not to be disclosed. And, ensuring that such contracts are enforceable. If such a contract is too restrictive, a court will find it violates California's anti-noncompete laws.
c. IP security. Make sure that any sensitive information, designs, etc. are kept under lock and key (if tangible). If in digital form, ensure that it can only be accessed by persons given permission - and they must have a password and username.
d. Assign and change usernames and passwords. Assign usernames and passwords to workers for computer networks and email accounts. Do not allow them to choose them or the ability to change usernames or passwords. Change usernames and password frequently.
e. Strong computer use policy. Have a clearly stated computer policy that prohibits the use of computers and email accounts for personal use. There is no reason, in the age of smart phones, that employees will have any need to use work computers and email accounts for personal use. There is no reason for a work email account to contain personal contact information. Strictly prohibit workers from giving their usernames and passwords to anyone else, including a fellow worker.
5. Obtain IP registrations. If a business has a large amount of content, particularly on a website, it should obtain copyright registrations. Trademarks should be protected by trademark registrations. Inventions that can be protected by patents should be unless the cost is prohibitive or not cost effective.
The above steps do not take into account employee theft of tangible property or embezzlement of company money. To prevent theft of tangible property, place controls on the use and possession of such property and follow up. To prevent embezzlement, regularly review the books of the company and hire outside accountants to audit the financial records. Do not allow anyone to have unfettered access to financial records or bank accounts. Be familiar with the vendors of your company and what they charge.
The above steps and others will take time and money to implement. Consultation with IT professionals, accounts and attorneys is also necessary. However, it will be well worth it prevent the theft of valuable assets.
Wednesday, September 28, 2011
True Stories: IP registrations work
In the past week, I wrote demand letters for two clients whose intellectual property rights were being violated. We received instant and complete success in both cases.
In one instance, a former employee was using my client's copyright protected materials. I sent the former employee a demand letter to cease and desist, to destroy all materials in her possession and send us list of all such materials and a list of all persons to whom she distributed the materials. The former employee complied with our demands, completely, within two hours.
In the other case, I wrote a demand letter to a company that was offering a service that was identical to my client's service and was doing so under a brand name that was so close to my client's service name that it constituted infringement. The other company's CFO called me immediately after receiving my letter and told me that they would stop using the infringing name.
The key in both cases was registration. In the first instance, I trained my client to register its copyrights and the client did so. The former employee could have been sued for violating the Digital Millennium Copyright Act and faced enormous exposure to a court award of damages and attorneys fees.
In the second instance, my client had a Federal trademark registration for its name. The infringing company faced great exposure to a suit for bad faith infringement.
Over the years, I have urged my clients to register their copyrights and trademarks. Having such a registration gives a tremendous advantage to the owner of such intellectual property. These cases show the leverage that the owner of a copyright or a trademark can have.
Friday, August 27, 2010
Unfair Trademark Dilution Laws Explained
I was asked to comment on the lawsuit filed by Facebook against Teachbook.
Facebook sues Teachbook.com for using 'book' in its name - latimes.com
Facebook is suing under Federal trademark law including, in particular, the trademark dilution statutes found in Federal trademark law.
According to the LA Times article about the case, Facebook initally objected to Teachbook's application for a trademark registration. Such objections are handled by the Trial and Appeals Board of the US Patent and Trademark Office. That should be good enough but the TTAB will only decide if Teachbook is confusing similar with Facebook - which it probably is not.
Facebook's lawsuit, on the other hand, is based on Federal trademark dilutions law. To understand that, you must understand that traditional trademark law protects against infringement.
Infringement is (very generally) when a trademark that is confusingly similar to another, older trademark. The infringing trademark must be used in the same class of goods or services, or close to the same class of goods or services, and must be so similar as to create the likelihood of consumer confusion.
So, infringement is very specific to the use of the trademarks involved, the class, the markets, etc.
In 1995, in an apparent reaction to the rise of the Internet, Congress enacted the Trademark Dilution Act which amended the U.S. trademark laws. The law was backed by large established companies.
Under the dilution laws, the owner of a trademark can stop the use of a similar trademark even though the other trademark does not create even a likelihood of confusion. In other words the defendant's trademark does not need to legally infringe.
Under the dilution laws, the owner of a trademark (the plaintiff in a lawsuit) can stop the use of a similar trademark if 1) the plaintiff's trademark is famous, and 2) the defendant's trademark is will cause tarnishment or is exploiting the famous trademark's goodwill.
The language of the statues is rather vague as to what is a "famous" mark, etc.
The most famous case regarding dilution was the Victoria's Secret case. Victoria's Secret (VS) sued the owners of a small lingerie shop in Kentucky for dilution. The name of the shop was Victor's Little Secret. Eventually, the U.S. Supreme Court heard the case and decided that the Victor's Little Secret trademark did indeed dilute the VS trademark but VS had no case since it hadn't been damaged.
The U.S. Congress immediately amended the dilution laws to provide that the owner of the famous mark did not need to prove damage. Congress has since further strengthened the law to give a greater edge to the owners of famous marks.
Today, the shop is not called Victor's Little Secret. After many years of litigation, VS and Congress bludgeonded the shop's owners into submission even though VS never proved that it had been harmed.
I strongly dislike dilution law. I represent entrepreneurs and small business owners - the people who own companies like Victor's Little Secret and Teachbook. I have had small business owners see me about cease and desist letters from major law firms that represent large corporations. I have told my clients that the other side has a weak case, even for dilution, but other side can sue and take the case to trial. The problem is that my client's can't possibly afford to litigate a trademark case in Federal court.
And that is what the dilution law is designed to do: to allow the owner of a "famous" trademark to force the small business into court and stay there.
I have litigated hundreds of business litigation cases and tried dozens. It is an expensive process. If a case had no legal merit, then it can be thrown out on a Motion to Dismiss (in Federal court). If a case has no factual basis, it can be disposed of with a Motion for Summary Judgment. Both of those motions can be made long before trial.
The problem with a dilution case is that a large corporation can easily claim it has a famous trademark and that a similar trademark is diluting it. Since it is an issue of fact whether or not the large corporation's trademark is famous and whether or not the other trademark is diluting it, the case not be thrown out on a motion to dismiss or summary judgment. The parties must engage in expensive discovery and hire expensive experts to testify about how famous is the plaintiff's trademark and about dilution, and go to trial - and the small guys can't afford it.
I explained this to an entrepreneur one time after he received a nastygram from a major law firm claiming that his trademark diluted a so-called famous trademark. I told him he could win against the other side but he would have to hire a trademark litigation firm and pay them huge sums of money. He said, "Forget it. I'll just change my company's name." And the other side was a company we had never heard of until my client received the cease and desist letter.
The ultimate problem is that the law is not only completely unfair but it creates uncertainty. As an attorney, if someone comes into see me about starting a company called Teachbook and whether they would get in trouble with Facebook, I have say, "Well, it's not infringement, but they might sue for dilution."
The client, of course, will want to know whether or not that is likely to happen, and I have to reply that I simply don't know - but I do know that they can't afford it.
The result is that the Victor's Little Secrets and Teachbooks of America are at the mercy of large corporations and a Congress that facilitates them.
The only thing that they can do is stay as far away from famous trademarks as possible and consult with an attorney before launching new brand.
So, there is my populist rant about dilution law.
Facebook sues Teachbook.com for using 'book' in its name - latimes.com
Facebook is suing under Federal trademark law including, in particular, the trademark dilution statutes found in Federal trademark law.
According to the LA Times article about the case, Facebook initally objected to Teachbook's application for a trademark registration. Such objections are handled by the Trial and Appeals Board of the US Patent and Trademark Office. That should be good enough but the TTAB will only decide if Teachbook is confusing similar with Facebook - which it probably is not.
Facebook's lawsuit, on the other hand, is based on Federal trademark dilutions law. To understand that, you must understand that traditional trademark law protects against infringement.
Infringement is (very generally) when a trademark that is confusingly similar to another, older trademark. The infringing trademark must be used in the same class of goods or services, or close to the same class of goods or services, and must be so similar as to create the likelihood of consumer confusion.
So, infringement is very specific to the use of the trademarks involved, the class, the markets, etc.
In 1995, in an apparent reaction to the rise of the Internet, Congress enacted the Trademark Dilution Act which amended the U.S. trademark laws. The law was backed by large established companies.
Under the dilution laws, the owner of a trademark can stop the use of a similar trademark even though the other trademark does not create even a likelihood of confusion. In other words the defendant's trademark does not need to legally infringe.
Under the dilution laws, the owner of a trademark (the plaintiff in a lawsuit) can stop the use of a similar trademark if 1) the plaintiff's trademark is famous, and 2) the defendant's trademark is will cause tarnishment or is exploiting the famous trademark's goodwill.
The language of the statues is rather vague as to what is a "famous" mark, etc.
The most famous case regarding dilution was the Victoria's Secret case. Victoria's Secret (VS) sued the owners of a small lingerie shop in Kentucky for dilution. The name of the shop was Victor's Little Secret. Eventually, the U.S. Supreme Court heard the case and decided that the Victor's Little Secret trademark did indeed dilute the VS trademark but VS had no case since it hadn't been damaged.
The U.S. Congress immediately amended the dilution laws to provide that the owner of the famous mark did not need to prove damage. Congress has since further strengthened the law to give a greater edge to the owners of famous marks.
Today, the shop is not called Victor's Little Secret. After many years of litigation, VS and Congress bludgeonded the shop's owners into submission even though VS never proved that it had been harmed.
I strongly dislike dilution law. I represent entrepreneurs and small business owners - the people who own companies like Victor's Little Secret and Teachbook. I have had small business owners see me about cease and desist letters from major law firms that represent large corporations. I have told my clients that the other side has a weak case, even for dilution, but other side can sue and take the case to trial. The problem is that my client's can't possibly afford to litigate a trademark case in Federal court.
And that is what the dilution law is designed to do: to allow the owner of a "famous" trademark to force the small business into court and stay there.
I have litigated hundreds of business litigation cases and tried dozens. It is an expensive process. If a case had no legal merit, then it can be thrown out on a Motion to Dismiss (in Federal court). If a case has no factual basis, it can be disposed of with a Motion for Summary Judgment. Both of those motions can be made long before trial.
The problem with a dilution case is that a large corporation can easily claim it has a famous trademark and that a similar trademark is diluting it. Since it is an issue of fact whether or not the large corporation's trademark is famous and whether or not the other trademark is diluting it, the case not be thrown out on a motion to dismiss or summary judgment. The parties must engage in expensive discovery and hire expensive experts to testify about how famous is the plaintiff's trademark and about dilution, and go to trial - and the small guys can't afford it.
I explained this to an entrepreneur one time after he received a nastygram from a major law firm claiming that his trademark diluted a so-called famous trademark. I told him he could win against the other side but he would have to hire a trademark litigation firm and pay them huge sums of money. He said, "Forget it. I'll just change my company's name." And the other side was a company we had never heard of until my client received the cease and desist letter.
The ultimate problem is that the law is not only completely unfair but it creates uncertainty. As an attorney, if someone comes into see me about starting a company called Teachbook and whether they would get in trouble with Facebook, I have say, "Well, it's not infringement, but they might sue for dilution."
The client, of course, will want to know whether or not that is likely to happen, and I have to reply that I simply don't know - but I do know that they can't afford it.
The result is that the Victor's Little Secrets and Teachbooks of America are at the mercy of large corporations and a Congress that facilitates them.
The only thing that they can do is stay as far away from famous trademarks as possible and consult with an attorney before launching new brand.
So, there is my populist rant about dilution law.
Monday, June 7, 2010
Branding vs. designs in the clothing business
I have represented several clients in the apparel industry. I recently had a consultation with a client that was planning to start a business that sold clothing. Several issues came up during that consultation that are common issues among businesses selling clothing. One of those issues was branding vs. designs.
Often entrepreneurs will often say that they have a great idea for a name or design for their brand which they will put on the clothing they sell. They have a great tag line or design and want put it on t-shirts or some other article of clothing and they will want to protect that tag line or design from being taken by a competitor.
However, they are confusing branding with clothing designs. Branding is the establishing of a trademark or trade name under which a product is sold. The trademark or name identifies the source of the product. Victoria's Secret is the trade name (the brand) for a company that sells women's lingerie. It is the name on the tags on the clothing sold.
On the other hand, the designs, including words, that are placed on clothing are not legally considered trademarks or trade names. Designs are ornamental and not trademarks in that they do not designate the source of the clothing.
Trademarks and trade names are legally protected and can be registered. Designs can not be legally protected in the same way. Unique designs on clothing can be protected under copyright law as long as the design is not part of the clothing design. Clothing designs can not be protected under copyright law.
The bottom line for entrepreneurs in the apparel industry is that they must make a distinction between their brand (that is the trade name of their clothing line) and the designs that they put on their clothing. Of course, sometimes brands will be placed directly on clothing. "Guess" puts its brand directly on its jeans but that brand is also on the clothing tag. Designs without a brand attached to them do not build goodwill.
The distinction is important because designs come and go but brands can be established and remain. For that reason, I advise apparel industry entrepreneurs to focus on their brand and think more in terms of how their designs will promote the brand. This makes for a stronger, legally protectable brand and is good marketing as well.
Often entrepreneurs will often say that they have a great idea for a name or design for their brand which they will put on the clothing they sell. They have a great tag line or design and want put it on t-shirts or some other article of clothing and they will want to protect that tag line or design from being taken by a competitor.
However, they are confusing branding with clothing designs. Branding is the establishing of a trademark or trade name under which a product is sold. The trademark or name identifies the source of the product. Victoria's Secret is the trade name (the brand) for a company that sells women's lingerie. It is the name on the tags on the clothing sold.
On the other hand, the designs, including words, that are placed on clothing are not legally considered trademarks or trade names. Designs are ornamental and not trademarks in that they do not designate the source of the clothing.
Trademarks and trade names are legally protected and can be registered. Designs can not be legally protected in the same way. Unique designs on clothing can be protected under copyright law as long as the design is not part of the clothing design. Clothing designs can not be protected under copyright law.
The bottom line for entrepreneurs in the apparel industry is that they must make a distinction between their brand (that is the trade name of their clothing line) and the designs that they put on their clothing. Of course, sometimes brands will be placed directly on clothing. "Guess" puts its brand directly on its jeans but that brand is also on the clothing tag. Designs without a brand attached to them do not build goodwill.
The distinction is important because designs come and go but brands can be established and remain. For that reason, I advise apparel industry entrepreneurs to focus on their brand and think more in terms of how their designs will promote the brand. This makes for a stronger, legally protectable brand and is good marketing as well.
Wednesday, October 7, 2009
Protect Against Hardball Trademark Tactics
I have noticed in recent years that business are increasingly unscrupulous about stealing the ideas of other businesses. This is particularly true in the area of trademarks and trade names. I have seen increasing cases in which rival business owners will file domain name registrations and trademark applications in an attempt to steal or preempt the legitimate use of a name by other business owners in the same industry.
I had case in which my client started a small recording company. My client incorporated the business and launched a website. After a few years and a producing a few CDs, she found out that someone had filed a trademark application for the same name. The person filing the trademark application was not using the name and apparently only filed the application to hold the name hostage. When I contacted the attorney for the person filing the application, his attorney informed me that his client would give up his application for money.
Another form of hardball tactics is filing domain name registrations that are similar to one already in use. This is done by registering the same name as .org, .net, or .biz, or using a hyphen in the name.
Of course, one can file lawsuits to remedy these situations but that is very expensive.
I encourage my clients to protect their business names and logos as quickly as possible. File fictitious business names for business names in use. State and Federal trademark applications are the best deterrents. We can even file what are called "Intent to Use" applications if the name is not yet in use but the owner intends to use it within the next one to two years. That application protects the name until the owner is ready to actually use - and it prevents someone from tying up that name by filing the same type of application in bad faith. The time and money needed to take these protective measures is well spent.
I had case in which my client started a small recording company. My client incorporated the business and launched a website. After a few years and a producing a few CDs, she found out that someone had filed a trademark application for the same name. The person filing the trademark application was not using the name and apparently only filed the application to hold the name hostage. When I contacted the attorney for the person filing the application, his attorney informed me that his client would give up his application for money.
Another form of hardball tactics is filing domain name registrations that are similar to one already in use. This is done by registering the same name as .org, .net, or .biz, or using a hyphen in the name.
Of course, one can file lawsuits to remedy these situations but that is very expensive.
I encourage my clients to protect their business names and logos as quickly as possible. File fictitious business names for business names in use. State and Federal trademark applications are the best deterrents. We can even file what are called "Intent to Use" applications if the name is not yet in use but the owner intends to use it within the next one to two years. That application protects the name until the owner is ready to actually use - and it prevents someone from tying up that name by filing the same type of application in bad faith. The time and money needed to take these protective measures is well spent.
Sunday, May 10, 2009
Protect Your Brand
Branding is the development of a company's name, trademarks, domains, and other intellectual property such that the company has a unique and recognizable identity. A company's brand can be closely tied to a company's goodwill. Goodwill is the reputation of a company for the goods or services that it provides. A company that has strong goodwill and a recognizable brand will be very valuable.
Protecting that brand can be critical to safeguarding the value of a company. A company can work hard at its services or in providing excellent products, only to have that goodwill undermined if it could suddenly no longer use the name with which it has done business. Imagine building a business for two or three years and building your company's goodwill and then getting a cease and desist letter to stop using your company's name and website domain, because you infringe on a Federally registered trademark. That happens frequently and it is devastating.
The best way to protect your brand is to do so from the beginning. Consulting with an attorney as to how to protect your domains and trademarks is a crucial and basic step in creating a brand. Large corporations will spend a considerable amount of time developing brands in secret. When they are nearly ready to use they brand, they will file multiple trademark registration applications to ensure that they have the rights to that brand. Small business owners won't be able to spend that much money but they can take similar steps in ensuring that their domains and trademarks are protected.
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