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Replacing ICANN: A Radical Proposal

Posted by Nicholas Wells on May 09, 2014  /   Posted in Domain Names, Trademarks

Hong_Kong_Night_SkylineIt’s finally happening.  The generic top level domains (gTLDs) are here.  You can reserve your domain name under .company, or .shopping, or .london, or .food, or .university, or dozens of others, each managed by a private entity that has jumped through the necessary hoops and paid the ($100K+) fees.

If you’ve been following this saga for the last 10 years, you know that some people consider gTLDs to be a great opportunity.  Others consider them to be yet another example of those who manage the Internet running roughshod over the intellectual property rights of others.  Given the number of my legal clients who deal with cybersquatters (and have effectively no legal recourse to protect their brands), you’ll have to put me in the latter camp: gTLDs are a mess—a legal quagmire for legitimate businesses.

Trademarks are an indicator of the source of goods or services.  Domain names are arguably the most prominent use of most trademarks.  They are the primary and first means by which billions of consumers connect with a given source of goods and services.

Other key indicators that are managed outside the purview of government—think Twitter handles, Facebook pages, Pinterest boards, etc.—all have procedures to protect brand owners from illegitimate use of trademarks.  But the most important, the domain name itself, remains subject to all manner of abuse by infringers.

The organization that manages all domain names is called ICANN–the Internet Corporation for Assigned Names and Numbers.  They have been, shall we say, unconvinced by the pleas of trademark owners concerned with cybersquatting, exploding legal costs, lack of clarity and certainty in the domain name system, and plain old unfairness.  Of course, ICANN did provide the trademark clearinghouse for gTLDs.  Admirable if inadequate.

The net result of gTLDs coming online is that every major brand owner that can afford to now must worry about a potentially unlimited number of gTLDs under which enterprising domainers may attempt to register versions of its brand.  Conversely, major brand owners may choose to try to register (and manage) their brand within every new gTLD.  If you want to understand why a trademark owner should be constrained to go through this never-ending expense and risk management, you’ll have to ask ICANN.

Or, you can consider the proposal below.

The domain name system as we have known it for decades (think of www.facebook.com as an example of a domain name) functions based on users’ tacit recognition of its legitimacy: certain domains are “real” or “official”; there is a de facto standard under which everyone gets their information from the same sources–the sources controlled by ICANN’s rules.

But there is no reason that it has to be this way.  There is no reason that a separate system of domain names couldn’t operate in parallel to the current system, eventually replacing (usurping?) its role as the official and preeminent system for commercial traffic or for brand owners’ websites.

The domain name system (DNS) is nothing more than a distributed method by which web browsers convert domain names (e.g. www.apple.com) into numeric internet protocol addresses (192.168.0.1). Before law school, when I was in the software industry, I set up many DNS servers on my desktop.  It’s not rocket science.  (See my old book, The Complete Guide to Linux System Administration.)

There should be a new system of domain names that recognizes the rule of law and that is dependently linked to trademark rights, because those rights are vetted and subject to legal processes in virtually every nation on earth.

The logical choice for an arbiter and manager of such a parallel domain name system is the International Trademark Association–INTA.

When INTA holds its Annual Meeting in Hong Kong next week, more than 9000 representatives from virtually every major brand in the world will be in attendance.  If those brand owners were to agree upon and support a parallel system of domain name management, the world’s economic powers would likely follow along like so many Facebook fans.

Is a parallel system feasible?  It’s been done many times before, but generally in the name of subversion or anarchy, rather than enhancing the rule of law.  (See the entry for Alternative DNS Root on Wikipedia.)

How could this be done?  It requires three things.

First, one needs to set up a computer as a DNS root server. This is the easy part. The software is free. Technical and security work adds to the eventual complexity as network traffic increases, but it’s easy to start small.

Second, one must establish protocols and procedures for registration of domains and resolution of disputes. This is where INTA would change what ICANN has done. (ICANN does have a dispute resolution procedure but it has permitted millions of trademark infringements to continue with essentially no legal remedy.)

Suppose, for example that the rules of an INTA-managed domain system provided terms such as the following:

  • A. After requesting registration, each domain is subject to a 30-day opposition period during which 3rd parties can object based on pre-existing rights.
  • B. Trademarks can be included within domain names only if such marks are registered in the jurisdiction associated with the corresponding top level domain; or, for top level domains not linked to a specific locale, a trademark must be registered in at least 3 jurisdictions taken from a list representing major world economies.
  • C.  Descriptive terms are granted to applicants based on an open lottery system.
  • D. Domains that are not used within a given period and are not associated with the owner’s registered trademark or a version thereof (so as to provide for typos etc.) would be considered abandoned and would be shut down and returned to public availability.
  • E. Dispute resolution rules would expressly provide for consideration of trademark rights and provide other explicit guidance to arbitrators (something lacking in ICANN’s UDRP).
  • F. Trafficking in domain names could be prohibited except under specific circumstances, such as for domains transferred as part of a transfer of related trademark rights. (This is similar to prohibitions in the United States on naked licenses and trademark assignments without accompany goodwill.

Obviously these are just initial ideas to show the types of rules that could protect intellectual property rights under a parallel DNS system.

The third and final step to making this happen would be to publicize a new DNS system so that consumers and internet service providers would begin “pointing” to the new INTA-managed DNS servers, thus making the new system ”live.”

This step is where skeptics will say “Ah hah! This can’t be done.” It’s true that it isn’t an easy transition, but it’s certainly feasible.

Imagine for a moment that the top 50 brands in the world–or the top 500–placed a few full-page ads in the Wall Street Journal and similar publications announcing this change. Imagine that a few large advertisers like Nike, McDonalds, Coca-Cola, and Wells Fargo included a new domain name as part of their next major ad campaign, along with simple instructions to access the new system. Steps like these would quickly create the legitimacy needed for a new DNS system to thrive.

Would this break the existing system?  Not at all.  The DNS software that we all rely on today is configured to pass on requests that can’t be processed to other servers. An INTA-managed DNS server could receive any DNS requests.  Any that were part of the pre-existing system and were not recognized would simply be passed on to an old DNS server, which would provided a response just as it does today.

Doesn’t this leave the existing system unchanged? It does.  The Internet gurus love competition, open systems, freedom.  Let them compete for DNS traffic.  The goal of a parallel system is to undermine the legitimacy of the ICANN model by providing an alternative that has the stamp of approval of the brands (the websites) that comprise the bulk of Internet traffic.  My hope is that a parallel DNS system would cause consumers to regard other DNS addresses as inherently suspect and “unofficial,” thus preventing many of the legal headaches (infringements) of the current system.  Eventually, it might even lead ICANN to be more responsive to legal issues as it faced a rapid decline in its “market share” in providing DNS services.

Wouldn’t all this be expensive?  I ask:  Compared to what?  Maintaining the technology and a supervising organization requires some expense.  But how many millions of dollars are currently being spent to fight cybersquatters, to monitor spurious registrations, to maintain a portfolio of defensive registrations and so forth. The goal should not be to spend as little money as possible today. The goal should be to achieve the lowest total cost and strongest long-term protection of intellectual property rights.

Isn’t this just a crazy idea?  Yes.  I admit it.  Every critical change starts out being viewed as crazy.  But how else can progress occur?  When existing institutions fail utterly to protect our rights, we have an obligation to create new institutions that will.  I think someone famous once said that.

Are You Following “Best Practices” in Intellectual Property Translations?

Posted by Nicholas Wells on April 29, 2014  /   Posted in Patents

This is a guest post by Lyle Ball, COO of leading translation firm MultiLing.

Filing patents can be costly, especially when filing domestically and internationally in numerous countries. In fact, translation costs can eat up a significant portion of a client’s IP budget, with some of the largest patent filers in the world budgeting upwards of $10 million annually to ensure each language version of every patent is accurately translated and localized for each country in which they plan to file.  As many of our clients have realized, the most costly element of translation is often not from the initial translation of words, but occurs when even a single word is mistranslated, leading to office actions related to translation, delayed time to grant, an increased risk of litigation or the reduction of patent scope and market opportunity for the life of the patent target.

Depending on the number of patents filed and the number of countries in which the client plans to file for protection, some firms might solicit freelance translators with limited experience to cut costs or partner with specialized patent agents in each country. While these foreign agents are likely extremely familiar with the languages, cultures and patent laws of the individual countries, the downside to this model is that there is no communication between foreign agents and translators across each target country. As well, these freelancers and local agents often lack sufficient scientific knowledge relevant to the patent. Errors found by an agent in one country can easily be perpetuated in the rest of the countries. On the other hand, working with a single patent translation and services provider allows for centralized management that creates collaborations between the translation and processes for each country.

With your client’s intellectual property – and future business – at stake, it’s critical that whomever touches the patent application follows specific best practices in patent translations and other related services. Consider these best practices in people, processes and technologies before you prepare to have your clients’ next patent applications translated:

People

  • Patent translations require a fusion of both linguistic and industry-specific expertise
  • As a result, optimal translation teams should consist of in-country native linguists, scientists, engineers and legal specialists

Process

  • If planning to file in multiple countries in multiple languages, the company should ensure their patent translation service provider uses a streamlined process with centralized project management – meaning the applications go through one project manager at the provider. This will help create transparency, efficiencies and accuracy in the patent filing process.

Technology

  • Translation technology should bolster the efforts of human translation teams by leveraging previous translations, maintaining a terminology database and simultaneously tracking the status of each patent across all languages and countries. This increases consistency and on-time delivery at a fair value for the client.

Best Practices Put to Work 

A Japanese manufacturing company with more than 10,000 patents in its portfolio was spending more than 40 percent of its IP-related costs on patent translations, with frequent translation errors, clarity-related office actions and delayed time to grant. After considering cutting back on its patent efforts altogether, the company decided to switch from a local translation company using foreign agents to a Japanese patent translation service provider leveraging the industry best practices described in this article. As a result, the Japanese company now sees:

  • Zero office actions related to translation or clarity
  • Reduced time to get the translations back from the provider because it was able to leverage past translations
  • Drop in total cost of patent ownership by 30 percent
  • Decreased time to grant by an average of six months, leading to earlier revenues
  • Increased scientific accuracy leading to scope protection and market potential

What’s Your Next Step?

Best practices in the translation process can have a major effect on the overall patent filing and prosecution process. The right people, process and technology in IP translations and related services will protect your client’s IP and their IP budget with fewer office actions, faster time to grant and reduced risk of invalidation. Are you happy with your current patent translation and filing process? If not, it’s time to find a patent translation services provider that follows these best practices.

Lyle Ball, COO, MultiLingLyle Ball is chief operating officer for MultiLing, an innovative leader in IP translations and  related services for foreign patent filings by Global 500 legal teams. As COO, Ball oversees global operations for more than 200 employees in seven country offices, and more than 1,000 highly skilled contractors across more than 80 languages.

Kane on Trademarks–Book Review

Posted by Nicholas Wells on April 19, 2014  /   Posted in Trademarks

KaneBook

UPDATE:  PLI has provided a 20% discount for Kane on Trademark Law for readers of my blog.  Just use this link: www.pli.edu/WellsTrademark

I work in several areas of law—copyright, social media, technology agreements, advertising and promotions—but at the moment, I spend the largest part of my day working on trademark matters.  If you’re familiar with trademark law, you know that the leading work in the field, cited by hundreds of court decisions, is J. Thomas Mc Carthy’s treatise, McCarthy on Trademarks and Unfair Competition.  Coming in at seven volumes—and growing, and with a front matter and Table of Contents that stretches 154 pages, McCarthy can be… unwieldy.  The $ 4,500 price tag may also be a concern for many smaller firms or lawyers who don’t spend all day handling trademarks.  Still, it is the resource everyone quotes.

So when PLI offered to send me a review copy of Kane on Trademark Law by Siegrun D. Kane, I was curious to see how it compared.

The short answer:  For most lawyers and in-house counsel, Kane’s book is the better choice.

Don’t get me wrong.  If you’re litigating trademark cases in federal court, you’ll probably like having McCarthy around.  But most of us don’t do that.  Kane on Trademark Law, now in its Sixth Edition, seems committed to remaining a one-volume work.  That choice is emblematic of its usefulness.  Everything you’re likely to need to know about trademarks is in your hand.  Kane is subtitled A Practitioner’s Guide.  Not a Judge’s Guide, or a Professor’s Guide, or even a Litigator’s Guide.

The Kane text is well organized, well footnoted, and well written, with headings that make it easy to find the topic you need.  (It also has a 60-page index.)  There are sections on false advertising, litigation, Internet infringements, licensing, and dilution, in addition to the sections you’d expect to find on clearing marks for registration, prosecution procedures, and proceedings before the Trademark Trial and Appeal Board.

Kane also comes with a CD-ROM that contains the entire text of the volume in searchable, linked PDF files, carefully formatted to match the printed book.  I’ve found this to be tremendously useful.

As an example of the different approach of Kane and McCarthy, consider the key trademark issue of likelihood of confusion between trademarks.  Kane has 35 pages on the topic, plus another 20 focused on counterfeiting.  McCarthy devotes Volume 3 to the topic—800 or so pages—plus innumerable related sections that appear in other volumes (See, e.g., Chapter 31, Volume 6, Defenses to Infringement).  Or consider the sections on Inter Partes TTAB proceedings.  Kane has 54 pages of succinct text on topics that include procedures, grounds, defenses, burden of proof, and review routes for TTAB decisions.  McCarthy devotes… well, you get the idea.

I love McCarthy, but I keep using Kane because most of the time, I don’t have the time to use McCarthy.  And my clients don’t have the money.  Kane reminds me of the points I need to know.  It references the statutory sections and leading cases.  It summarizes and recommends practice steps without as much scholarly background.  Most days, it’s just the better tool for what I need.

I think that’s also true for those, like in-house counsel, who are dealing with trademarks, social media, advertising, employment, real estate leases, contract disputes… and that’s just before lunch.  Kane on Trademarks will serve in-house counsel by providing guidance on most trademark issues that they are likely to face.  They’ll hire litigators to take trademark cases to the Federal Circuit and they will use McCarthy.

Kane does miss some areas that I wish it included.  There appears to be nothing about ex parte appeals at the Trademark Trial and Appeal Board.  Perhaps it’s not a critical topic for most readers, but I’d like to see more on it.  There is a little about using the Madrid Protocol, but virtually nothing about international trademark protection.  This is clearly a book about U.S. law, but given its apparent target audience, at least a brief section on how international trademarks operate with some strategy pointers and references would be appropriate.  Finally, there isn’t much about the procedures for handling disputes.  True, those procedures are based on the TTAB manual and the Federal Rules of Civil Procedure.  But guidance in a book like this goes a long way to help those not familiar with the rules.

Despite a few minor weaknesses, Kane on Trademarks seems to spend a lot of time on the corner of my desk.

Michael Jordan Doesn’t Need Your Help, Thanks

Posted by Nicholas Wells on February 28, 2014  /   Posted in Right of Publicity

If you use the name of a famous person in your advertisement, do you need that person’s permission?  What if it’s a news story instead of an advertisement?  What if it’s a “congratulatory” message that seems to fall between these two?  The U.S. Court of Appeals for the Seventh Circuit has just issued a ruling in favor of Michael Jordan that says a “congratulatory” message was really a type of advertisement and subject to the same restrictions.  So you’d better get permission before using that celebrity’s name.

The case started in 2009 when a commemorative issue of Sports Illustrated was devoted entirely to Michael Jordan’s basketball career.  Jewel Food Stores ran a full-page ad that congratulated Michael Jordan on being inducted into the Hall of Fame.  The ad included a pair of “23” sneakers and showed the logo for Jewel-Osco prominently in the center of the page.

Michael Jordan sued Jewel for misappropriation of his identity for their commercial benefit (this is also called a right of publicity under many state laws).  Jordan asked for $ 5 million in damages, plus punitive damages and treble damages under the Trademark Act.

The U.S. District Court sided with Jewel, saying that Jewel had a right under the First Amendment to congratulate Jordan.  Last week the Seventh Circuit reversed the district court and said that the Jewel ad was commercial speech and thus was not entitled to such strong protections under the First Amendment.

In sum, the Seventh Circuit said that the ad, even if it was a “congratulatory message” was clearly intended to be a “promotional device for the advertiser” that would “exploit public affection for Jordan.”  Ouch.  In other words, Michael Jordan doesn’t need gratuitous promotion by a food store when use of his name or image already has tremendous commercial value.

(Notice that I did not include a photo of Michael Jordan in this post!)

Social Media and the Law: Book Review

Posted by Nicholas Wells on September 27, 2013  /   Posted in Internet Law

UPDATE:  PLI will give a 20% discount to anyone buying Social Media and the Law through this link. Thanks for reading!

Social Media started as a technology niche but has now become a part of everyone’s lives.  Understanding its impact on business development, customer relationships, and product placement—among other issues—is critical for any business that wants to grow and succeed.

As hundreds of millions of customers use social media, the legal issues that arise from that use (or misuse) are also increasing in prominence.  Most lawyers, however, are unsure how to approach legal issues in the context of social media.  For example, an employment lawyer knows how to deal with termination of an employee for defaming the company in a newspaper article.  But what about an employee whose activities on social media threaten the value of the employer?  An intellectual property lawyer knows about copyright infringement, but what will a judge consider “fair use” on a photo sharing website?

At Wells IP Law, we deal with social media legal issues regularly for our clients.  Anyone who doesn’t focus their legal practice on social media would be well-served to pick up a copy of Kathryn L. Ossian’s Social Media and the Law, recently published by Practising Law Institute.

PLI recently sent me a review copy of this book.  I found it to be a great resource, even though I work in this field regularly.

Ossian took on a huge task in preparing this volume with her co-authors.  The legal impacts of social media are far-reaching and a treatise that attempted to cover every possible answer would be doomed to failure.  But the approach Ossian has taken is the right one.

Different sections of the book discuss the impact of social media in different areas of the law.  First, each section provides an overview of legal principles in that area; then the authors examine how those principles are applied in the context of social media.  Specific issues are called out, with caselaw discussed whenever appropriate.

The topics include privacy; copyright and trademark; defamation; employment issues; advertising law; criminal law; compliance issues for regulated industries; and civil discovery.

It appears that Ossian’s goal is two-fold:  (1) guide the expert in a particular legal field in understanding how the latest caselaw applies to social media issues within that field; and (2) give the non-expert an overview of topics and a list of legal issues to watch for.  Those non-experts will then have a good idea of when to bring in more expert advisors when difficult issues arise.  But they won’t be left in the dark about what the issues are.

General counsel in almost any industry would do well to have this book on hand and become familiar with it for the day when the inevitable social media legal issue arises.  Even for the social media novice, Ossian provides a good overview of terminology and a discussion of the legal impact of social media on both businesses and individuals.

In reading this book, I sometimes felt like I wanted more information, or at least more concrete answers.  Alas, there are few decided cases in this field and many issues that we can identify but that haven’t yet been resolved by any court, so that all Ossian (or anyone) can do is offer best practices based on an analysis of analogous situations outside of social media.  Ossian also provides helpful (and lengthy) appendices of relevant state statutes.

I did not find much discussion of working with social media companies to resolve legal matters.  Certainly, the legal terms and privacy policies of leading social media companies change regularly (Facebook is infamous for this), but some best practices and principles remain applicable, and hearing the experience of those who have interacted with these firms to resolve infringements, disputes, and so forth, would be a helpful addition to the book.

The use of several co-authors also means that the structure and approach differs somewhat between sections of the book.  This is not a huge issue, since it will often be used as a reference and not read cover-to-cover, but a more consistent treatment of topics would be helpful in future editions.

Still, my overall assessment is that this is a timely and useful volume that I plan to refer to frequently.

Brand Protection in China: Don’t Wait!

Posted by Nicholas Wells on September 05, 2013  /   Posted in Trademarks

Brands in ChinaThe third best-selling sedan in California right now is not Lexus or BMW or Mercedes. It’s an electric car called Tesla.  But Tesla was not in the news last month because of its record sales.  It was in the news because its expansion plans in China were held back by trademark problems.

A man in Guangdong purchased the Tesla domain name and registered the Tesla trademark in China before Tesla Motors of California bothered to do it.  It will likely cost Telsa millions of dollars to buy these intellectual property assets for its Chinese business.

Apple settled for $ 60 million to obtain rights to its iPad brand in China.

Google reportedly paid $1 million for the Google domain name in China several years ago.

All three companies could have reserved their intellectual property in China for less than $500 if they had started sooner.  Ouch.

China: Challenges and Opportunities

The problems in China are similar to the land rush that occurred with domain names in the 1990s, when “squatters” bought famous brands and then resold them to brand owners after the brand owners realized that they needed a website.  Some may say that these Chinese individuals are acting unethically.  In one sense, I agree.  On the other hand, they are seizing a business opportunity and making the most of it.  And they are not breaking any laws.

In fact, trademark laws in most countries permit the same thing that we’re seeing in China.  The difference is that it costs more to register a trademark in most places as compared to China, so squatters are less likely to do it; and brand owners are more likely to be forward thinking in protecting their IP in traditional western markets in Europe, even though—in the back of their minds—they know they need to do something in China.

My point is that you don’t want to be in the next news story.

Several of my clients have already faced trademark problems in China.

Brand protection in China can be challenging.  The language is very unfamiliar to most of us.  Laws are still being revised.  (A revision to the Chinese trademark law was passed last month for the third time since 2000.)  Those who are not working with a Chinese business partner may feel lost.  Businesses may also think that enforcement of their rights in China is impossible, so why bother even trying.

But as Chinese businesses develop their own brands, enforcement of brand protection for foreign companies continues to improve.  Smart businesspeople realize that the challenges can be overcome.  They invest a little to get their brand protection in place now.  Before someone else does.

At Wells IP Law, we can manage protection of your intellectual property in China through several qualified attorneys that we work with.  Or we can connect you directly to them.

But don’t wait.  And don’t blame anyone but yourself if your brands are already taken when you get there.

Tips for Brand Owners Entering China

  1. If you’re big enough to afford a U.S. trademark registration, you should already be thinking about this issue and considering whether you might ever want to be in the Chinese market.
  2. Realize that someone in Asia is probably already ahead of you. They’re just waiting to see if you’re big enough to be worth their time.
  3. Commit to investing $ 500 to protect your brand in China.  If Tesla, Apple, and Google had done just this much early on, their trademark troubles would not be in the news.
  4. If possible, protect both English and Chinese character versions
  5. Consider registering a China domain name in either regular or Chinese characters, if not both.
  6. Remember that a trademark registration in China is not enough if you are also doing business in Hong Kong, Macau, and Taiwan.  You must register brands in all four jurisdictions separately.
  7. Look for a Chinese business partner through trade missions or government programs.  Sharing some of your profits is worth the benefit of having a knowledgeable local presence.

 

Legal Discipline and LegalZoom

Posted by Nicholas Wells on April 06, 2013  /   Posted in Trademarks

A few months ago, the U.S. Patent and Trademark Office dealt with a disciplinary case where a person ran an “inventor’s network” and handled more than 150 patent applications, even though he was not a registered patent attorney. Although the bar to becoming a registered patent attorney is high, the USPTO has very rarely gone after anyone for the unauthorized practice of patent law. And while this was perhaps an especially blatant case, it highlights the need to protect the public by enforcing the ethics rules that attorneys are required to live by.

Thanks to PLI for bringing up this disciplinary case.

To be clear, I am not a registered patent attorney. My undergraduate degree is in Linguistics so I’m not eligible to sit for the patent bar. I work with several trusted colleagues whenever my clients need assistance with patents.

But this issue brings to mind the concerns I have as a trademark attorney when I see people using LegalZoom and similar services to file their trademark applications.

I don’t think LegalZoom is doing anything illegal or unethical. They save people a lot of money compared to what most trademark lawyers charge.



Yet there is a serious but subtle risk that people who use LegalZoom or similar services will assume they are receiving “professional” guidance without realizing the limits of that guidance. The line where procedural guidance ends and legal advice begins is a very fuzzy one for virtually all non-lawyers. As a result, I believe that LegalZoom customers are likely to assume, despite all disclaimers to the contrary, that LegalZoom will exercise more judgment and expertise on their behalf than is actually the case.

I see this when I help someone who has filed for a trademark through LegalZoom and then needs assistance resolving a problem that develops. The problem will often be one that could have been avoided if a lawyer had guided the client through the application process. That was not the job LegalZoom was hired to do, but the client seems perplexed that the professional service that they paid for didn’t foresee or avoid the problem that arose.

I suspect that the same issues may arise when LegalZoom or similar document service companies form new LLCs, draft wills, or perform other services. The problems are just manifest more quickly for a trademark, which is examined by the USPTO a few months after filing.

There is a price to be paid for professional, personalized legal services. It is a much higher price than what automated or cookie-cutter service bureaus can offer. But these low-cost service bureaus need to be certain that customers understand what they are—and are not—receiving for their discounted fees.

When Superman Sues You

Posted by Nicholas Wells on February 12, 2013  /   Posted in Trademarks

Can Super Heroes Be Trademarked?

A recent piece at the Guardian discusses the efforts of comics creator Ray Felix to resolve a dispute with Marvel Comics and DC Comics about his comic title A World Without Superheroes.  The issue may shock you:  SUPER HEROES is a registered trademark in the US for comics, so Felix’ use is—say Marvel and DC—trademark infringement.

I expected Batman, Spiderman, Iron Man, Green Lantern, and Incredible Hulk to be trademarked.  But Superheroes?  It didn’t seem possible.  I thought of the Super Friends  (which I used to watch religiously at 6:30 every Saturday morning).  What would Aquaman do in a situation like this?

So I checked it out, and it’s true:

  • US Registration 0825835 for SUPER HERO for costumes
  • US Registration 1140452 for SUPER HEROES for toy figures
  • US Registration 1179067 for SUPER HEROES for comic books and magazines

Plus a few others, all apparently owned by a subsidiary of Marvel Comics.

It doesn’t seem right, and maybe it isn’t.  From the perspective of a trademark lawyer (that’s me), the trademark Super Heroes may well have become generic.  That’s not a slight on Spiderman.  It’s a legal term meaning that the words Super Heroes are no longer connected in the minds of customers with a particular seller—a particular source for comics books or toy figures.

Many famous brands have already become generic, or nearly so: When we talk about a thermos, or a band-aid, or a kleenex, we’re using a word that someone invented as a trademark (thermos brand vaccuum flasks; band-aid brand bandages, and kleenex brand facial tissues, to be precise).  But then those words became so closely associated with a type of product that they were no longer associated with the single company that invented the term.

One could say that the same thing has happened with Super Heroes, if for no other reason than that everyone who reads about the troubles of Ray Felix trying to use the word Super Heroes in the title of his comic book is incredulous.

But the problem facing Mr. Felix is one common to small businesses everywhere.  Marvel owns the trademark registrations above, so it is free to assert them—to say that they are still valid.  If you want to disagree, you’ll have to do a boatload of research, get a federal judge to look carefully at the issue, and then rule in your favor.  Even if we all think you’ll win, someone has to pony up $100,000 or more to make it happen.

Until then, at least we can sleep well at night knowing that Marvel Comic’s lawyers are keeping the streets safe for Superman.

Three Reasons Why You Should Be Careful Using Crowdfunding

Posted by Nicholas Wells on February 09, 2013  /   Posted in Trademarks

jobless manCrowdfunding can be great.  Kickstarter, Indiegogo and dozens of others can get donors signed on to your projects and help you create the Next Big Thing.  But before you rush to post your idea and start collecting quarters, consider the risks as well.  Seth Quest forgot about that part.  He just declared bankruptcy because a donor to his Kickstarter project sued him for nonperformance (Seth couldn’t bring his project to market after collecting donations).  Sure, I think the guy who sued him was being unreasonable, but there are lots of unreasonable people out there.

Here are three key legal risks that you face when you post a project on a crowdfunding website.

1. Killing Your Patents

Disclosing your patentable idea starts a one-year clock under the U.S. Patent Act.  If a patent application is not filed during that time, then a patent cannot be filed.  And the news is even worse in other countries where you might want to protect your idea.  AND, beginning in a few weeks, the American Invents Act will have the U.S. move to a “first to file” patent system.  At that point, you could be in a race with your donors to reach the patent office.



2. Losing Your Brand

The basic rule is that whoever applies to register a trademark first will get the registration and can block other similar trademarks.  If you use your cool new brand name and logo to submit a crowdfunded project, someone else could file for trademark protection before you do.  You could file a lawsuit to get the trademark back, but that would eat up a lot of those crowdfunding quarters you’ve been collecting.

3. Giving Away the Farm

Even if you don’t make any mistakes in disclosing your trademarks or patentable ideas before you protect them, you could undermine your success by using an idea or contribution that someone sends you or posts on the crowdfunding website.  (Most allow comments on publicly visible projects.)  Some sites (such as Indiegogo) specify that the project sponsor owns rights in all submitted comments.  But one of the largest crowdfunding sites, Kickstarter, does not even define the ownership of submitted materials.  So if you use someone’s suggestion, it’s not clear whether they might have a legal claim against you for a share of your success.

If you’re using crowdfunding, you may not be thinking about the business and legal issues that will crop up once you’re successful.  But you should at least consider these issues before publishing your best ideas for the whole world to see.

Eight Reasons Not to Use the Madrid Protocol for Trademark Protection in the United States

Posted by Nicholas Wells on February 06, 2013  /   Posted in Trademarks

Note:  I first published this article as the cover story in the Dec/Jan issue of ITMA Review, a print-only publication from the UK’s Institute of Trade Mark Attorneys.  It was co-authored with Allister McManus of ipconsult.

The Madrid Protocol is a tremendous tool for helping your clients secure trademark protection in other countries.  In some cases, costs can be cut in half by using the Madrid Protocol.  The ease of handling renewals and assignments is a further benefit— a modest fee and a single form (in English) can update trademark records in dozens of countries.

As a quick review, to use the Madrid Protocol, one begins with a local trademark application (the Basic Application as filed at the Office of Origin—the IPO).  The owner requests the IPO to submit the application to the World Intellectual Property Organization (WIPO) where it becomes a so-called International Registration, a supranational document that does not protect the mark in any country, but which permits WIPO to submit it to all of the designated countries.  The designation of countries in which protection is desired is called a Request for Extension of Protection (REP).  Each countries’ trademark office then reviews the application and (hopefully) approves it under local laws.

Despite the potential advantages of using the Madrid Protocol, it isn’t right for every mark.  The typical concerns are well known to most trademark practitioners.  Two of the most serious limitations are these:

First, if the Basic Application is abandoned or cancelled anytime during the first five years after the International Registration is issued, then all foreign applications and registrations that are based on the International Registration will automatically be cancelled as well.  This is called a Central Attack.  Such cancelled local marks can be converted to standard national marks, but only at significant expense and effort.

Second, the owner of the International Registration cannot transfer ownership of any dependent marks to an owner that is not resident in a member country.  This means, for example, that marks obtained under the Madrid Protocol cannot be transferred to a Canadian owner without first withdrawing the marks from the Madrid System at great expense.

While experienced UK trademark practitioners are well-aware of the advantages and disadvantages of Madrid-based applications, they may be much less aware of additional obstacles raised under the trademark laws of the United States for applications submitted through WIPO.  The remainder of this article discusses eight concerns arising under U.S. law that are specific to trademark applications filed in the U.S. through a REP under the Madrid Protocol.



1. Inability to Use Supplemental Register

Marks cannot be registered in the U.S. if they are “merely descriptive” of the relevant goods and services unless the mark has acquired secondary meaning as a trade mark.  Where this not possible, U.S. law provides a secondary trademark register, called the Supplemental Register, where descriptive marks can be registered without showing secondary meaning.  A mark on the Supplemental Register gains some benefits of registration, including the ability to preclude other confusingly similar marks from registering.  After five years on the Supplemental Register, a mark is eligible for registration on the Principal Register, where it will be accorded full legal protection.

But Madrid-based applications are not eligible for the Supplemental Register.  If a mark within a Madrid-based application is deemed merely descriptive, there is no possibility of moving it to the Supplemental Register as would be done with a direct-filed application.  Instead, the must be abandoned and a new national application filed, incurring additional fees and losing the priority date of the Madrid-based filing.

2. Inability to change class numbers

The next three points involve class designations for the goods and services within an application.  The U.S.P.T.O. is known (infamous) for the specificity that it requires in a description of goods and services.  For direct-filed applications, however, the Office is flexible in permitting adjustments to ensure that anything within the scope of the original language of the application can proceed to registration (barring other obstacles).  Because Madrid-based applications are tied to an International Registration, however, the U.S.P.T.O. imposes several restrictions in how a description of goods and services can be amended.

The first restriction is that the class numbers used within a Madrid-based application cannot be changed.  For example, if a Madrid-based application lists “laminating film for inkjet paper” in class 16, the U.S.P.T.O. will reject the description because these goods belong in Class 17.  Yet the Office will not permit the goods to be moved to Class 17; the application can only contain the specific class numbers that were originally submitted by WIPO.  In this example, the application cannot be saved because the wording is narrowly drawn.

3. Inability to move goods between classes

Within direct-filed U.S. applications, it is permissible to move goods between classes to achieve correct classification.  That is, any goods that are within the scope of the language of the original application may be placed within any class that is part of the application.  For example, if an application included “Mattresses and mattress pads” in Class 20 and “bed sheets and duvet covers” in Class 24, the Office would permit “mattress pads” to be moved to its correct place in Class 24.

But in a Madrid-based application, such moves are not permitted.  In the above example, “mattress pads” would need to be deleted as not being in Class 20, even though the proper class (24) is already part of the application.

4. Inability to add classes

A final related issue is that classes cannot be added to an application.  Within a direct-filed application, it is a simple matter to pay an additional per-class filing fee to add a class to an existing application so that goods included in the originally filed application can be properly classified.  This is useful in at least two circumstances.  The first is where many items are listed in one class and the trademark examiner requires that an item must be moved to its proper class, but that class was not part of the original application.  The applicant may pay the additional per-class fee, have that item moved to the newly added class, and the application proceeds.  The second is where a client wishes to delay payment of some fees.  Goods in many classes can be listed in a new application without designating any class numbers.  The trademark examiner will issue an office action listing the applicable classes for the goods in the application.  The client can then pay the additional per-class filing fees (or delete any unneeded goods and services) so that the application can proceed.  This may allow a delay in paying the majority of filing fees for more than 9 months from the original filing date.

But this option is not possible with a Madrid-based application.  Considering the above example, if a Madrid-based application included “Mattresses and mattress pads” in Class 20, it is not possible to add Class 24 to the application.  The only option is to delete “mattress pads” from the application.

To be fair, the above three issues related to the description of goods and services are less traumatic than they might be because Madrid-based applications coming to the U.S. from the U.K. typically have more broadly worded descriptions that permit greater flexibility when submitting amendments than might otherwise be the case.  For example, if a class heading has been used, then this can often be amended to include anything that would be within that class.  Yet we have seen numerous instances where clients wishes to maintain certain items within a pending Madrid-based application but were forced to delete it (or abandon an application altogether) because of the challenges noted above.



5. Inability to add further filing bases

A Madrid-based application is submitted to the USPTO by WIPO under Section 66(a) of the U.S. Trademark Act.  Direct-filed applications may be filed under one of several different filing bases, such as 1(a) for “use in commerce” applications, 1(b) for “Intent to Use” applications, and 44(d) to claim date priority to an earlier non-U.S. application.  None of these filing bases can be included with a Madrid-based application, which can only list Section 66(a) as its filing basis.  The practical limitation that this imposes is that a Madrid-based application has no flexibility to specify an earlier priority date under the Paris Convention, and no ability to immediately allege use of the mark in commerce, which may result in a weaker registration.

6. Weakness of registrations in disputes

In the U.S., rights in a mark arise through use of the mark in commerce.  U.S. law does permit Madrid-based applications to register without first establishing use of the mark in commerce within the United States—this is one great advantage they have over direct-filed applications.  Yet if a dispute arises in a U.S. court regarding a Madrid-based registration, the opposing party will seek cancellation of the mark because there is no record that the Madrid-based registration has been used in commerce in the U.S.  Thus, the burden of proving use of the mark will fall on the mark owner.

Conversely, a direct-filed U.S. application must provide the U.S.P.T.O, with evidence of using the mark in commerce before it can register.  Because of this requirement, a direct-filed registration is prima facie evidence of using the mark, and in a dispute the burden falls on the opposing party to show that use has ceased or was fraudulently alleged to secure the registration.  Thus, in general, direct-filed applications are in a better position during litigation that Madrid-based applications.  (After a Madrid-based registration passes its six-year anniversary so that evidence of use has been submitted to the U.S.P.T.O., the Madrid-based registration would be on an equal footing with a direct-filed registration.)

7. Inability to modify marks

After a mark has been submitted to WIPO to become an International Registration under the Madrid Protocol, the mark itself cannot be changed.

The U.S.P.T.O., however, allows “non-material” changes to a mark, both during prosecution and after issuance of a registration (via Section 7(e) of the Trademark Act).  Examples of non-material changes include redesigned logos that adjust non-material design elements or word marks in which a hyphen or space is deleted or added.  Thus, if the owner of a mark makes minor changes to the mark after the initial application is filed, the mark as used in commerce will differ from the mark as it appears in the trademark application or registration.  This may be raised as an issue in any dispute proceedings.  It will also impede the owner’s ability to submit an acceptable Statement of Use to the U.S.P.T.O., which may result in the registration being cancelled.  We have seen cases where a word mark was registered with a space but was being used without a space; the Statement of Use was rejected because it did not match the mark as registered, so that the mark had to be amended under Section 7 before the Statement of Use could be accepted.

8. Danger of missed deadlines

An International Registration is subject to renewal every 10 years by filing a renewal form and appropriate fee with WIPO.  This serves to renew the mark in all countries in which it is registered through the International Registration.



However, the U.S.P.T.O. imposes separate and distinct maintenance rules for U.S. marks, including those obtained via the Madrid Protocol.  Specifically, an affidavit to allege use of the mark must be filed between the 5th and 6th anniversary of the date of U.S. registration (not the date of filing); and between the 9th and 10th anniversary of the date of U.S. registration and every ten years thereafter.  If the International Registration is renewed, but the proper affidavits are not filed directly with the U.S.P.T.O., the U.S. registration will be cancelled.

Our experience has shown that these U.S. filing deadlines are often missed by non-U.S. mark owners, resulting in unintended cancellation of U.S. marks.

In summary, the Madrid Protocol is a powerful tool for lowering costs and managing the maintenance of international trademark portfolios.  When such portfolios include the United States, the above factors should be taken into consideration to decide whether the Madrid Protocol or direct filing in the United States will better serve the client’s needs.