Trademark Titan™ Blog

Information for in-house counsel, brand owners and entrepreneurs. Committed to international trademarks, copyrights, branding and other IP issues.

Trademark Titan™ Blog  - Information for in-house counsel, brand owners and entrepreneurs. Committed to international trademarks, copyrights, branding and other IP issues.

Alice Corp. Pty. Decision Kills Software Patents: In the Wake of Alice, Many Software Companies Will Need to Bring Their Brands and Trademarks to Life

ThAlice Softwaree recent Supreme Court case of Alice Corp. Pty. v. CLS Bank International, has shaken, but certainly not stirred, the software industry.  Under the Alice decision, software patents that claim abstract ideas and nothing more, including business methods, are likely not valid.  The patents at issue in Alice cover software applications that disclose a scheme for mitigating “settlement risk” by facilitating the exchange of financial obligations between two parties by using a computer system as a third-party intermediary (a/k/a “an escrow agent”).

The court concluded that “the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent-eligible invention.”  Accordingly, the Court held that since the claims are drawn to a patent-ineligible abstract idea (e.g., software that carries out the function of an escrow agent), they are not patent eligible under 35 U.S.C. §101 of the Patent Act.

Determining software and other patent eligibility requires a two-step analysis. Step one: identify whether the claims are directed to a patent ineligible concept, such as an abstract idea.  Step two: determine whether the claims contain an inventive step sufficient to transform the abstract idea into something significantly more.  If your software patents or applications do not pass this test, they are likely dead.

The decision in Alice should end the practice of taking abstract ideas from the public domain and simply embedding them within computer software applications and connecting them with generic computer implementation, which has created monopolies where they simply do not belong.  This decision should have the effect of eliminating poorly drafted and poor quality software patents that do not contain inventive steps sufficient to transform abstract ideas.

Alice and other recent decisions rendered by the Supreme Court regarding patent eligibility are likely only the tip of the iceberg.  We will likely see more Supreme Court decisions in the coming years that further limit patent eligibility subject matter and aim to promote free market principles rather than stifle marketplace competition.  Those decisions will also likely continue to erode the rights of and create higher financial barriers for patent trolls.

In the wake of Alice, many owners of software patents are wondering if their patents are valid.  Many of those owners, and owners of pending software patent applications, might be contemplating whether copyright or trade secret protection should be considered if their patented ideas have fallen back into the public domain.  Unfortunately, however, copyright does not protect the functionality of software, thus competitors may simply “draft around” the code, and trade secrets would likely prove difficult to maintain as “secrets” for software.  So what is a company facing this dilemma to do?  Well, if it has not already done so, and if there is no room for substantial improvement eligible for patent protection, it should immediately start building its brand and portfolio of trademarks as it may be only a matter of time before competition creeps into the marketplace with better branding, better trademarks and better management all of which would likely spell doom for the once holder of monopoly power.

Building a powerful brand and trademark portfolio requires thoughtful analysis and consideration and involves many factors, including the following:

I.  Brand and product name selection need not be difficult. Proper consideration of brand names does take time and thought-provoking analysis, however.  Not considering the following four brand name factors could potentially prove fatal for a company’s new product launch.

  • Distinctiveness – Is the name legally protectable?

Terms/names that are considered to be generic for products are never protectable as trademarks. For example, the term CloudSoftware.com for providing online software services should never receive trademark protection. Selecting a generic term as a trademark is brand suicide.

Further, names that merely describe certain attributes of a product will not receive trademark protection upon first use and may never receive trademark protection. Although descriptive terms may become eligible for trademark protection once the “mark” has been put to continuous and substantially exclusive use – that can take years and potentially millions of advertising dollars.

Tip: Select brand names that are legally protectable upon first use.

  • Distinguishable – Is the mark distinguishable from the competition?

Why select a mark that is not distinguishable from the competition? Although a selected mark may be “legally” distinguishable from competitors’ marks, it may still become lost in a noisy marketplace of similar trademarks.

Companies that use marks similar to their competitors’ marks run the risk of losing sales and potentially developing bad reputations that belong to their competitors. For example, if a competitor’s product with an overall similar name receives bad press or even worse kills someone – that publicity may inevitably rub off on those companies with products with similar names. Why take that risk?

Tip: Only select names that are legally protectable and sufficiently distinguishable from the competition.

  • Da Position – Does the company have a positioning strategy?

A brand name should communicate a product’s positioning strategy. Select a name that begins the positioning process. For example, which products have the slogans “Melts in Your Mouth Not in Your Hand” and “The Uncola?” Those slogans positioned their products at the top in their respective categories. Also consider whether a slogan can re-position the competition. Think about how Procter and Gamble re-positioned Listerine with the simple slogan “Medicine Breath.” Re-positioning a competitor with a slogan is one way of gaining market share.

Tip: Select a mark or slogan that will capture the position or niche and then don’t let it go!

  • Da Attributes – What are prospective purchasers looking for?

Selecting a mark that suggests an advantage of a product or a result that consumers want from a product can be a game changer. Rather than look at how a company perceives its own product, a company should look at how consumers already perceive it, then look for the solution in the mind of consumers. Then select a name that reinforces consumers’ perceptions. What do consumers want from car batteries, for example? Of course, they want a long-lasting dependable battery. That’s why the mark “Die Hard” has been a huge success.

Tip: Select marks that convey attributes desired by consumers.

II.  Building Global Trademark Portfolios.  Many factors come into play when launching global brands and brand names. Just ask those that do it for a living!  As for the brand name itself, I’ve listed below some of the factors brand owners should consider well in advance of product launch.  And, yes, I do meanBlog Alice Magnet image well in advance of product launch. Do I need to say that one more time? I know that I do, but I won’t.

Below are eight aspects brand owners should bear in mind when planning a global brand name launch:

1. Does the name have language barrier issues? There have been many stories – some of which may be nothing more than folklore but are nonetheless fun to talk about – of companies launching new brand names to later learn – much to their chagrin – that they convey negative connotations in other languages and cultures. Take, for example, the well-known story of the Chevy Nova. As the story goes, the term NOVA in Spanish means, “won’t go.” Probably not the best name for a vehicle would you say? As the story continues, maybe it was the name itself that explains why the Nova didn’t do so hot in the Spanish-speaking markets.

Companies must also know whether new brand names would have distasteful connotations in other languages and cultures. Another example is the story of PepsiCo launching the slogan “Come Alive with the Pepsi Generation” in China. The story goes that the meaning of the slogan was terribly lost in Chinese translation. Chinese speaking folks translated the slogan to: “Pepsi Brings Your Ancestors Back from the Grave.” Houston, we have a problem.

2. Consider adopting an international icon or logo. One great way of avoiding the language barrier issue is to adopt an international logo design. That way if the name has negative connotations in certain languages or cultures, the brand owner can either drop the name altogether or change the name but still use the universal design logo, which may become recognized across all languages and cultures. Think of the Good Humor® icon.

3. A term that is legally protectable in one country may not be protectable in another. A term or mark that is protectable in the U.S., for example, may not be protectable in the European Union or China. Although U.S. trademark law may render a mark suggestive, thus legally protectable upon first use in the U.S., EU or Chinese trademark laws may render the same term or mark as being non-distinctive, thus unprotectable. If there are any doubts as to a selected mark’s distinctiveness in a certain jurisdiction, an inquiry as to the mark’s distinctiveness should be made with foreign counsel. If it’s too late, and the mark has already been launched, one way to avoid the non-distinctiveness refusal in certain countries is to simply add a design element to the word mark.

4. Budget. Budget. Budget. Consider the costs of clearing and protecting selected marks in certain jurisdictions and countries. Although the cost to clear marks in all selected countries and jurisdictions may be cost prohibitive, it still makes sense to clear marks in those top priority countries/jurisdictions. Those top” countries/jurisdictions are those that are expected to result in the majority of sales. Also, the costs to secure trademark registration protection on a global basis add up quickly. The best strategy is to know the marketing strategy and only seek protection in those jurisdictions that correspond with that strategy. If money is not an issue, and the brand owner fears that competitors might register the name in certain countries where the mark will not be used, seeking defensive registrations may be part of the strategy.

5. Clearing and registering a mark in the U.S. does not mean the mark is clear to use in Canada, Mexico or any other country. Remember that trademark laws are country specific. A U.S. trademark registration does not generally grant the right to use the mark in any other country.

6. Does the brand owner want/need to reserve country code top-level domain (“ccTLD”) names? If a company wants to use ccTLDs (i.e., .CN for China or .JP for Japan), it should ensure that the domain names are available during the clearance stage and, if they are, reserve them immediately.

7. Where should trademark registration be sought? Deciding where to seek registration is an important aspect of the protection process. Due to cost barriers, companies should consider protecting marks in stages, which may mean over a certain number of years. Start with the top priority jurisdictions, including those jurisdictions where the majority of sales are expected to take place, customers are located, licensees are located, advertising is planned and manufacturing and distribution will take place. The lower priority countries are those of which sales are not expected to be of any significance for a few years. Protecting the name in the lower priority countries can simply be staged over coming years in an effort to spread out costs. Companies should be mindful of the brand expansion strategy, which could mean rolling out the product in certain countries over a 2, 3 or even 5 year period. It’s generally highly recommended that the trademark filings stay ahead of the product rollout strategy.

8. Trademark application filing strategy: National registrations, Community Trademark, International Registration? How about a combination of all three? There are a number of factors to consider when planning a filing strategy. Considerations should include national filings and their prosecution costs, vulnerability of home country applications or registrations on which International Applications are filed via the Madrid Protocol, the number of jurisdictions in which protection is sought, which countries or jurisdictions belong to the Madrid Protocol, first-to-file countries, distinctiveness of marks and potential for oppositions to registration in certain jurisdictions. There is not a “one plan fits all” strategy. Strategies should be considered on a case-by-case basis. Whether to use the Madrid Protocol and/or Community Trademark filing mechanisms or other jurisdictional filing mechanisms or a national application filing strategy or a combination of those options should be fully considered well in advance of product launch.

I cannot stress more that sufficient time should be allotted for planning a global filing strategy. In some instances, the time needed to clear marks for a global launch can take weeks and possibly months. And that’s if the first choice is available. So take some time out of your busy day of planning the branding strategy and give ample time to the planning of the brand name protection strategy – you will probably need it. Trust me.

Now that Alice has placed many software patent holders (and applicants) on notice that their software patents are invalid, it is time for those parties to build, if they have not already done so, strong and valuable national and/or global brands.

Avoiding “Another” Trademark Trap: “Don’t Sweat It” When it Comes to Trademark Selection

There are many reasons why trademark owners should carefully select and clear new product names, trademarks and even product slogans and phrases.  Some of which include selecting trademarks and slogans that are immediately eligible for trademark protection and do not infringe third party rights.  

Even when brand owners select trademarks and/or slogans that would likely not infringe third party trademark rights, it may still be prudent, in some cases, to choose another mark.  For example, selecting marks that would likely get lost in the marketplace noise with other similar trademarks is not advisable.  

Furthermore, it is not a good idea to select marks that would likely draw fire from a competitor that aggressively enforces its marks against uses of similar marks – even when consumer confusion is unlikely (we call those parties “Trademark Bullies”).  There may also be instances when the adoption of a mark – although likely not infringing – may still draw an objection from a competitor or another party in the trade – just because.     

Not until a trademark attorney understands the gray of trademark law – will s/he understand the gray of trademark law and recognize that selecting a different mark altogether is sometimes your best business option – even if that is not what you want to hear.  From time to time I need to remind clients that they do not hire me so that I can tell them what they want to hear – but rather what they need to hear.  As Robbie Robinson almost once said “You might hate me now, but you’ll learn to love me later.”  

There are instances when good business decisions (based on sound legal advice) are to simply consider different product names or slogans rather than spend hundreds of thousands of dollars (or more) defending a trademark dispute brought by an over-zealous plaintiff with a weak case.  You might win the legal battle, but at what business and economic costs?  

Companies should obviously steer clear of adopting infringing trademarks, product phrases and slogans and marks that would likely draw fire from a competitor.  In September of this year, Oakley, Inc. drew such fire when it was sued for trademark infringement for using the trademark / phrase “Sweat it Out” for sweatbands.  The plaintiff, Lontex Corp., is a manufacturer of athletic apparel and owner of several United States trademark registrations for the mark SWEAT IT OUT for athletic apparel, including sweatbands. 

The complaint alleges that Oakley’s use of SWEAT IT OUT for sweatbands constitutes counterfeiting and is likely to confuse or deceive consumers into believing that Oakley’s sweatbands originate with or are sponsored by Lontex in violation of the Lanham Act (Trademark Act). 

Lontex also alleges that Oakey’s misuse of the mark SWEAT IT OUT constitutes willful trademark infringement, thus Lontex is requesting that the court award triple damages, costs and reasonable attorneys’ fees.  

Brand owners should spend their time and resources on brand development and growth and not on defending unnecessary trademark infringement allegations over the use of product slogans or phrases, not to mention the possibly of spending thousands or hundreds of thousands on re-branding (and, yes, I said the “R” word). 

To read more about my views on trademark clearance and selection, read my blog posts here, here and here.

Trademark FRUTTA DI VITA Confusingly Similar to Registered Trademark FRÜT A VIE Says U.S. Patent and Trademark Office: Put on Your “Judge Hat” and Opine

Another recent trademark decision rendered by the U.S. Trademark Trial and Appeal Board (the “Board”) has, again, highlighted the importance of trademark selection and the intricacies of trademark clearance and trademark infringement analysis.  

In that case, the trademark applicant sought registration of mark FRUTTA DI VITA for “cosmetics and cosmetic preparations; concealers; cosmetic facial blotting papers; cosmetic sun-protecting preparations; and cosmetic sun-tanning preparations.” 

The U.S. Patent and Trademark Office Examining Attorney refused registration of the mark FRUTTA DI VITA on the basis it is confusingly similar to the registered mark FRÜT A VIE for “cosmetic creams for skin care; cosmetic preparations for skin renewal; skin and body topical lotions, creams and oils for cosmetic use; wrinkle removing skin care preparations.” 

    VS.

When the Applicant appealed the refusal to register its mark, the Board affirmed the Examining Attorney’s rejection based primarily upon the following four trademark principles and findings: 

  1. The goods listed in the parties’ respective filings are identical or essentially identical. 
  2. Since there are no limitations set forth in the parties’ respective filings as to the channels of trade in which their goods travel (i.e., professional buyers vs. retail consumers), the goods are presumed to travel in all normal (thus overlapping) channels of trade.
  3. Buyers of the parties’ respective goods are presumed to be the same/overlapping. 

Applicant argued that the applied for mark is used exclusively for higher-priced anti-aging skin preparations and not for general cosmetics or general skin care preparations and the buyers for its goods are well-informed consumers, thus consumer confusion between the marks is unlikely.  Unfortunately for Applicant, however, the USPTO must compare the parties’ respective goods as identified in their trademark filings, which, in this case, were presumed to be identical or essentially identical cosmetic and skin care preparations and also presumed to travel in the same channels of trade to the same class of buyers. 

  1. The marks FRUTTA DI VITA and FRÜT A VIE are similar in terms of appearance and sound. 

During its analysis of the parties’ respective marks, the Board concluded that Applicant’s mark FRUTTA DI VITA translates into English as FRUIT OF LIFE, while the cited mark FRÜT A VIE has no direct English translation; thus the “doctrine of foreign equivalents” would not apply in the case. 

However, the Board held that the parties’ respective marks are sufficiently similar in terms of appearance and sound so as to cause a likelihood of consumer confusion – or trademark infringement.  The Board stated the following: 

  • “Thus, while in some respects, the marks differ in appearance, their basic structure (including first and last words beginning FRUT— and VI—, respectively) and their general appearance of foreignness are more likely to be recalled by consumers than the more detailed and specific differences between them.” 
  • “Finally, we find that the marks are also similar in their sound or pronunciation.” 

The Board correctly noted that the test for whether marks are likely to cause consumer confusion as to the source of goods and services is not based upon a side-by-side comparison of the marks, but rather based upon the recollection of marks by the average consumer.    

Two important trademark principles applied in this case are that (1) when the goods or services of the parties are identical or essentially identical, the marks of the parties need not be that close or identical to support a finding of likelihood of consumer confusion – or trademark infringement and (2) trademark infringement analysis with respect to the marks is not based upon whether there is another party using the same mark, but rather whether there is another party using a confusingly similar mark – one that would likely cause consumer confusion as to the source of the parties’ respective goods or services. 

One can certainly check the USPTO database to see if someone has already filed an application for a specific mark with a specific spelling.  However, one must also check the USPTO database for third-party marks that are confusingly similar to a proposed mark.  Also, since U.S. trademark rights are created based upon actual use in the marketplace and not registration, one must not only consider registered trademarks (state and federal) but also common law (unregistered) trademarks and even business names. 

When brand owners are selecting new brand names / trademarks (including logo designs), they should consider my rule of “The Four D’s of Trademark Selection.”    

Brand name selection does not have to be that difficult.  Proper consideration of brand names does take time and thought-provoking analysis, however.  Not considering the rule of the Four D’s could potentially prove fatal for a company’s new product launch and, as I have said before, could be the difference between brand success and failure.

Blogging Hiatus Concludes for the Trademark Titan Blog

Okay…so who said that finding time to blog is easy?  For the past year and a half finding that time for me has been nearly impossible due to the demands of my practice and not to mention the time taken to foster my 9-year old prodigyson with respect to his academics and his god-given talent for baseball and, of course, hockey; he was born in Maine… enough said. (What’s up with the Boston Bruins anyway?  Can we find some offense, please!?)

With the addition of a new paralegal and new associates to support my practice and with the travel hockey season (and the construction of a hockey training room with synthetic ice in my basement) behind us! I am hopeful that my blogging hiatus has finally come to an end…at least for the foreseeable future…and at least until that special time of year…travel hockey season!

-Cheers

United States Trademark Trial and Appeal Board Crushes Trademark Application for MONSTER Mark

Although this is not my typical style of blog post, I promised my 7-year-old son that I would use the recent U.S. Trademark Trial and Appeal Board (the “Board”) decision in In re Monster Cable Products as a “teachable moment.” You may be asking yourself why would my son know about that decision? Well, I must confess, and I’m a bit embarrassed to say so, when my son was a bit younger I began reading aloud Board decisions during our programmed “reading time” unbeknownst, of course, to my wife. Amazingly he enjoys them! Or at least I think he does, since he asks some pretty good questions and is able to stay reasonably “tuned-in.” Or maybe he just likes being with dad. Either way, it’s all-good.

Might I be creating a next generation trademark/IP lawyer? I really hope not as my secret dream for my son is for him to be a professional hockey player for the Boston Bruins (and I think it is his too) or for any professional hockey team for that matter (other than the for Habs, of course). But then again, I’d be pretty happy and a proud dad if my son were to score! a full college hockey scholarship at a nearby college and so I could use the “college fund” to buy my Porsche 911. Ok, on with the post. My son is now rolling his eyes.

This is yet another case of the trademark selection process running off the track. As I have blogged about many times, brand owners cannot ignore the importance of trademark selection and how the improper selection of marks has the potential to kill (or at least potentially harm) a brand. Brand owners must not only consider marketing aspects of trademarks (how a “mark” itself can “advertise” a product) but also legal ones. In my practice I work closely with many of my clients during the trademark selection process to ensure that valuable names are considered and ultimately selected.  Getting trademark counsel involved early during internal trademark selection discussion should result in the selection of valuable brand names and may even reduce the costs associated with the clearance phase due to the pre-screening of proposed marks early in the selection process.

In the case of Monster Cable Products, Inc., Monster Cable sought registration for the mark MONSTER, in standard character form, for various automobile products, including suspension struts, bumpers, automotive fender flares, automotive grab handles, automotive grille, grille guards, automotive light bars, rear view mirrors, roll bars, running boards, automotive seats, shock absorbers, air intake manifolds and truck bed liners.

The Trademark Examining Attorney refused registration of the mark MONSTER on the ground it describes certain characteristics, features and/or qualities of truck accessories. The Examining Attorney argued that because the term “monster truck” means a very large pickup truck, the use of the term MONSTER in connection with truck accessories identifies products used for monster trucks. So the Examiner refused registration. The Examining Attorney based his decision on the long standing trademark principle that a term is deemed to be merely descriptive of goods or services, within the meaning of Section 2(e)(1) of the Trademark Act, if it immediately conveys an immediate idea of an ingredient, quality, characteristic, feature, function, purpose or use of the goods or services.

Monster Cable argued that the term MONSTER, when used in connection with automotive accessories, is suggestive, if not arbitrary, for the following reasons:

1. Just because the record shows that there is a vehicle referred to as a “monster truck” does not mean that the word “monster” is descriptive of automotive accessories;

2. The word “monster” per se has no direct relationship with automotive accessories; and

3. Because the average consumer does not drive a monster truck, the word “Monster” does not directly describe automotive accessories.

The Board disagreed, however, by stating the following:

One of the primary characteristics of a “monster truck” is its modified suspension. One of the products listed in the description of goods is “suspension struts.” Consumers encountering MONSTER brand suspension struts will immediately perceive the products as being for monster trucks. Furthermore, the record shows that roll cage kits, roof racks, nitrogen shock absorbers, floor mats, battery cable kits and parts, windscreens, windshields, and canopies are sold for monster trucks. These products correspond with roll bars, automotive cargo management systems, floor mats, shock absorbers, automotive battery accessories, and window covers and deflectors listed in the description of goods. As indicated above, consumers encountering the MONSTER mark in connection with these products would likely perceive the products as being for monster trucks. Finally, a consumer encountering MONSTER for truck steps and truck bed liners would also understand, without any need for analysis, that the products were for monster trucks.

In view of the foregoing, the Board affirmed the Examiner’s merely descriptiveness refusal.

Trademark Principles for Non-Distinctive, Merely Descriptive “Marks”

When selecting new brand names, brand owners must understand that descriptive terms are not protectable as “trademarks” upon first use. Descriptive terms must acquire secondary meaning before any trademark rights are acquired – if ever any. To read more about avoiding the pitfalls of descriptive “trademarks,” read my blog posts on that topic, including here, here, here and here.

As pointed out by the Board in In re Monster Cable, below are certain key trademark principles you need to know to avoid adopting non-distinctive, descriptive terms as “trademarks”:

1. A term need not immediately convey an idea of each and every specific feature of the applicant’s goods or services in order to be considered to be merely descriptive; rather, it is sufficient that the term describes one significant attribute, function or property of the goods or services.

2. Whether a term is merely descriptive is determined not in the abstract, but in relation to the goods or services for which registration is sought, the context in which it is being used on or in connection with the goods or services, and the possible significance that the term would have to the average purchaser of the goods or services because of the manner of its use; that a term may have other meanings in different contexts is not controlling.

3. The question is not whether someone presented with only the mark could guess what the goods are. Rather, the question is whether someone who knows what the goods are will immediately understand the mark as directly conveying information about them (i.e., whether someone familiar with applicant’s truck accessories will understand MONSTER to convey information about the goods).

4. It is a well-settled legal principle that where a mark may be merely descriptive of one or more items of goods in an application, but may be suggestive or even arbitrary as applied to other items, registration is properly refused if the subject matter for registration is descriptive of any of the goods for which registration is sought.

5. A term or terms are not merely descriptive of goods or services if one must exercise mature thought or follow a multi-stage reasoning process in order to determine the product or service characteristics. 

Rather than taking the “easy” way out by adopting “marks” that are capable of “advertising” the associated goods or services, select suggestive, arbitrary or coined terms to use in combination with the desired descriptive term(s). If Monster Cable had adopted a mark using that strategy, such as “Monster Planet” – “Monster Craze” – or “Pinnacle Monster Accessories” (assuming there are no prior users of those marks or similar mark, of course) it likely would not have been run over by the Board.