Posts tagged with "trademark registration"

USPTO TO INCREASE TRADEMARK FILING AND OTHER FEES

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Trademark application

On May 27, 2016, the United States Patent and Trademark Office (“USPTO”) published in the Federal Register a Notice of Proposed Rulemaking to adjust trademark fees [Notice].  If all goes as planned, the fee adjustments will be effective in January 2017.  Because many of the adjustments are fee increases, those planning to file an application for trademark registration may want to act sooner rather than later.

As you may know, the USPTO largely relies on self-funding to pay for trademark related operations.  This means that ideally those who use the various services provided by the Trademark Office pay for those services.  Because the overall goal is to achieve aggregate cost recovery, periodically, fees must be adjusted to match projected expenses.  The USPTO summarizes the objectives for the rulemaking as: Continue reading

DISPARAGEMENT ISSUE IS FRONT & CENTER FOR USPTO TRADEMARK REGISTRATIONS

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Push pin on trademark textSection 2 (a) of the Lanham Act, 1946, 15 U.S.C. Sec. 2 (a), which restricts the registration of trademarks found by the USPTO to be scandalous or disparaging, was determined to be unconstitutional on the basis of the First Amendment by  the Court of Appeals for the Federal Circuit in a case (In re Simon Shiao Tam-2014-1203), brought by “The Slants,” an Asian-American rock band.  [Background]

Mr. Simon Shiao Tam, as the owner of the mark, filed in 2011 a registration application for  “The Slants” (Serial No. 85-472044).  The USPTO examiner rejected the application on the basis that the applied for mark was disparaging under Section 2 (a)  because the word had a long history of being used in a derogatory way for people of Asian decent.  The examining attorney believed that people of Asian decent would take offense from the use of the applied for mark.  The rejection was upheld by the Trademark Trial and Appeal Board (TTAB.) Continue reading

WHY ARE THE SAN DIEGO CHARGERS TAKING PRE-EMPTIVE ACTION TO PROTECT THEIR RIGHTS IN FUTURE TRADEMARKS?

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Football Play Strategy Drawn Out On A Chalk BoardThe football world is abuzz with the possible relocation of the San Diego Chargers to Los Angeles. Background for Team Move.  While the outcome of where the Chargers end up is of short term interest, the more interesting question business owners should ask is: Why did the team file “intent to use” applications  Section 1(b), Lanham Act for federal registration of two possible marks with the United States Patent and Trademark Office (“USPTO”)? 1/  The answer is that the Chargers want to block others from hindering their future adoption of the new marks if the relocation happens.

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WHAT IT TAKES TO PROTECT A CERTIFICATION MARK? (Part 2)
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Orange Tick Circled Shows Quality And Excellence

This blog follows on my earlier examination of why a certification mark could improve the bottom line for both for-profit and not-for-profit organizations.

If you think that setting up a certification program is in your future, or you already have one in place, here are some points to consider as you develop or perfect the program:

1.         A certification mark is not the same as the mark your organization uses to identify its goods and services (“identification mark”).  While the design of the certification mark may incorporate some elements from your identification mark, it should nonetheless have distinctive elements to eliminate confusion between the two. 

2.         Because there are basically three types of marks, it is critical to understand which kind applies to your organization, because the standards for the United States Patent and Trademark Office (“USPTO”) registration process differ: 

            a.         Marks that certify that goods or services originate from a specific geographic region (“Champagne” for wine, “Roquefort” for cheese, “Indian River Fruit” for Florida citrus);

            b.         Marks that certify that goods or services meet certain standards for quality, materials or mode of manufacture (“UL” mark certifies electrical equipment meets certain safety standards; “Pure Wool” logo means the product is made of a 100% wool); and

            c.         Marks that certify that the work or labor for a product or service was performed by a member of a union or other person meeting certain standards.( Union workmanship).

3.         Identify the standards that an applicant to your program must meet.  These may be created by your organization or based on standards established by a governmental agency or other standard developer.

4.         The certification mark will be used by third parties, not by your organization.  Once the third party has met the standards your organization has set, they will be permitted to use the certification mark in connection with their own goods or services to tell the world they are “qualified” to do so by the certifier.

5.         Consider federally registering your certification mark with the USPTO, which, once accomplished, basically gives your organization protection in all 50 states.

6.         If you are going to request federal registration of the mark, the USPTO will require you to submit a copy of the standards you have established to determine whether others may use the certification mark. (37 C.F.R. §2.45)

7.         To protect your rights in the mark and not risk being deemed to have abandoned it, maintain an appropriate policing program to insure that it will be used correctly by the third parties.  Here are two actions you should take:

a.         Issue a letter that makes it clear that they are using the certification mark under license from your organization and if they fail to maintain the standards you have required, you can revoke the privilege; and

b.         Monitor third-party use of your certification mark.  For example, depending on what is appropriate, you could require periodic refresher training or status reporting.  At such intervals, your organization could charge fees to support this monitoring process.

In these difficult economic times, developing a certification program can not only help to set you apart from your competition but also force others to play by your rules.  That is definitely an enviable position.

CERTIFICATION MARKS USEFUL TO TRADE ASSOCIATIONS, CHARITIES AND FOR-PROFITS (Part 1)
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Blue Tick Circled Shows Checked and Verified

One good method for a trade association, charitable organization or for-profit entity to expand its mission while simultaneously generating additional revenues is to establish a certification program. 

The entity wishing to set up a certification program (the “certifier”) would require an “applicant” wishing to acquire new skills to demonstrate competence in a particular field by meeting the standards set by the certifier.  Once a course or test was successfully completed, the certifier would then allow the applicant to use the certifier’s certification mark, in other words its “seal of approval.” (Think of the quintessential “Good Housekeeping Seal of Approval.”)   

By adopting a certification program, the certifier has taken steps not only to improve the standards of performance within its area of interest but also to create a new source of revenue generated from any training or monitoring it requires to maintain quality controls.

The breadth of activity that lends itself to the adoption of a certification program is huge.   Based on a recent review of the records of the United States Patent and Trademark Office (“USPTO”), there were more than 10,000 live records for applications and registrations of certification marks.  (Examples of certification marks) This suggests that many organizations recognize the value of running such programs.

If your company is considering incorporating a certification program into your general mission, a critical element is the selection of the designation (i.e., the certification mark itself), which a successful applicant may use to show its level of competence. 

So. . . what exactly is a certification mark?  It can be any word, name, symbol, device or combination of same which is used by a person other than the owner of the mark to certify (a) to regional or other origin; (b) to the material, mode of manufacture, quality, accuracy or other characteristics of such person’s good or services; or (c) that the work or labor on goods or services was performed by members of a union or other organization. . . . .” (Applicable USPTO regulations.) 

A distinct message is conveyed by a certification mark which differs from that of an identification mark that informs the consuming public of the source of the goods or services which they are buying (GM versus Ford; Apple versus Samsung).  When the consumer sees a certification mark, the mark signifies that the goods or services have been examined, tested or inspected by someone other than the entity displaying the mark and that the independent standards of the marks’ owner have been met.

In my next blog, I will cover some basics principals to aid in the design and protection of your organization’s certification mark.

 

TRADE NAMES VERSUS TRADEMARKS UNDERSTANDING WHY YOU MAY NEED BOTH
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             In the course of my practice, I am often asked to explain the difference between a trademark and a trade name.  Understanding the role that each  plays in the life of a business is important so that the owner can take appropriate steps to protect its interest in one or both of these forms of intellectual property.

What Is a Trade Name and How Can You Protected It? 

              Once you have chosen the legal form under which your business will operate, you need to identify the official name of the owner of that business.  If you will be a sole proprietor, then your name will be the one that identifies the owner, for example, Susan Smith.  If John Wilson and Susan form a partnership, then the name of the owner of the business might be “Smith & Wilson. “  On the other hand, Susan and John could operate as a corporation or limited liability company and might name their entity “Smith & Wilson, Inc” or “Smith & Wilson, LLC.”

              Depending on the State where Susan chooses to run her business, she may need to register her sole proprietorship or partnership name with the appropriate State and local authorities.[i] / If she will operate as a corporation or limited liability company, she will first have to form the entity in the State of organization before the entity can come into existence. Part of the formation process will require her to identify the official name of her entity in accordance with the naming conventions required by that State’s law.

              Although the business owner has been identified with an official name, the owner may wish to use another name in the market place.  In Susan’s case, if she is a caterer, she might want to identify her business as “Heavenly Spread.”  This other name will be her trade name, also referred to as a fictitious name.  Owners operating in this manner usually will make the distinction clear when entering into agreements by signing as “Susan Smith dba (or T/A) Heavenly Spread,” even though they drop the dba designation when marketing to the public.

              Because no one will know who actually owns Heavenly Spread when Susan announces the opening of her catering establishment using the Heavenly Spread name, she will have to register her fictitious name in accordance with the State’s fictitious name regulations where she conducts her business.  Such registration is necessary so that if anyone needs to contact her as the owner or has a complaint with Heavenly Spread, there will be a record with the State identifying the owner of that trade name.

What Is the Difference Between a Trade Name and a Trademark?

              A trade name is an alternative name that a business owner can use.  By contrast, a trademark or service mark, which can be a word, phrase, symbol, design or combination of such, indicates to the consuming public that there is a specific provider that stands behind the goods or services being offered which is different from another provider of similar goods or services.

              It is possible that the owner of a business will adopt the same words for its official name or trade name and its trademark.  Prime examples are “Dell” and “Ford.”  However, the family names did not become trademarks immediately.  Rather, it took time for those words to take on the characteristics of a trademark, meaning that in the mind of the public those words came to stand for the providers of specific goods, namely, computers and cars.

              In the case of Susan and John, they can choose to adopt “Heavenly Spread” as their service mark in connection with their catering business.  However, before adopting any mark, it is wise to have a professional search done to be sure that others who provide similar services are not already using the mark for their business.

What Are Some Steps You Can Take to Protect Your Trademark?

              As a business owner you only acquire rights in a mark by using it; therefore, one major step that must be taken to protect your rights in your mark is to use it continuously and frequently.  Do not be afraid to display it prominently, whether on your website, labels, or marketing materials.

              Another protective step is to use the symbols   TM SM  ® near your mark.Use of these symbols shows that you are claiming ownership rights in the mark.

              “TM” stands for trademark and “SM” stands for service mark.  You do not need to have any special governmental approval in order to display those symbols.  However, depending on the geographic area where you conduct your business, your trademark protection may be limited to that geographic location.  This means that while your business is focused in Maryland and Virginia, someone else operating in Texas or Oklahoma may use the same mark for a similar business and not be guilty of infringing on your rights.

              If you qualify to obtain federal registration of your mark, meaning that you are actually using the mark in interstate commerce, you can apply to the United States Patent and Trademark Office.  Once you complete the registration process, you are authorized to use the ® designation with your mark.  Federal registration provides you with more muscle to restrict others from using your mark as it means that, generally, your ownership rights extend throughout the United States.

              A third step you should take to protect your mark is to choose it carefully.  If your mark is merely descriptive, meaning it describes your services or goods, you may not qualify for federal registration.  Or, even if you do, there will be many others using similar terms, making it harder for you to distinguish yourself.  Such an outcome defeats the very purpose of having a mark, which is to enable you to distinguish yourself from your competition.

              Therefore, while it could be harder, and may even cost you money to identify, choosing a strong mark gives you a higher level of protection.  A strong mark means a word mark that may be a made-up, arbitrary, suggestive or fanciful word or phrase.  Some strong marks that come to mind are:  “Xerox,” “NIKE,” “Apple,” “VW Beetle,” “Footlocker.”

              What you should take away from this discussion is that while a business owner may use the same words for the business’ official name or trade name and its trademark, each iteration serves a different purpose.  By understanding the distinctions, you will know how best to protect your interests in the various ways you go about presenting your business to the public.

              For additional information about the trademark/trade name distinction, go to the SBA’s blog at:

http://www.sba.gov/community/blogs/community-blogs/business-law-advisor/difference-between-trade-name-and-trademark-%E2%80%93-a


[i] /           Establishing a business in any jurisdiction can require the owner to apply for multiple registrations and permits or licenses.  Those requirements are beyond the scope of this Blog.

ARE YOU READY TO SELL YOUR INTELLECTUAL PROPERTY RICH BUSINESS AT ANY TIME?
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Service oriented businesses that create intellectual property (IP), such as software, data, and applications, need to be nimble so they are ready to take advantage of unexpected opportunities.  One important opportunity to anticipate is the sale of your business.  Large service oriented businesses wishing to expand their underlying capabilities or client base could now be on the hunt for just what you do.   Because such an offer could come at any time, will you be ready to exploit the opportunity advantageously?   

At such a time, you will be faced with a variety of decisions and actions requiring a quick turn-around.   This article poses a series of questions and identifies concrete steps that every business owner should incorporate into her business operations. Then, like the proverbial Boy Scout, you will “be prepared.”

1.    Are You Ready for the Due Diligence Inquiries That the Buyer Will Be Make?

It goes without saying that as a seller, you will be confronted by a close examination of your organizational and operational documents by the potential buyer.  Therefore, at least yearly, you should:

  • Review and update your entity’s documents (enabling and owner related agreements) and keep them current.
  • Maintain your business entity’s legal good standing in all jurisdictions in which you function.
  • Verify licensure and other regulatory requirements.
  • Review management and operational procedures, especially as they relate to your IP products. 
  • Confirm that NDAs, employment and contractor agreements assure your control over your IP.

Unfortunately, business owners frequently fail to conduct this type of annual self-examination.   Perhaps surprisingly, a common oversight is the failure of a business to maintain its good standing in all the jurisdictions where it is organized and doing business.   This lapse, along with the failure to have documents signed or to keep licenses current, can quickly derail what otherwise seems to be a marriage made in heaven.

2.    If Some or All Of Your Business’ Assets Are Tied to the Good Will Associated With an Individual, What Steps Are You Taking Now to Allow for a Smooth Changing of the Guard?

From a seller’s point of view, it may not be what the founder wants to hear, but if others are not being groomed for a change in control, then the business’ value is likely to be diminished in the eyes of a potential suitor.    Especially in a business where the key asset is “its people,” if this asset is not going to be preserved in a change of control, the buyer is going to move on.  The necessary preparatory actions for a potential seller are to have the hard discussions, be willing to anticipate changes, have contractual obligations in place and be comfortable with those changes well before a potential buyer comes to call.

3.    If Your Business Relies Heavily on Intellectual Property Assets, Do You Control What You Need?

Conduct an inventory of all of the intellectual property (IP) assets that your company uses.  Know whether you IP is subject to copyright, trademark, patent, or trade secret laws and regulations not just in the United States, but in all the countries where you conduct business.  

Not surprisingly, business owners understand the need to inventory and value their hard assets if, solely to have such listed and depreciated on tax returns.  Conducting a full inventory of a business’ IP assets can be harder because it is not always clear who actually owns the assets.  But it is of equal importance because those assets do add great value to your business’ bottom line.

The inventory should cover an assessment of what you have and close review of your documents to be sure they comport with your expectations of ownership and control.   Once you have the inventory, periodically re-evaluate it to be sure all permissions are current and available for your continued use and exploitation of the IP.   

 Can you answer the following questions in the affirmative?  If not, then you could be leaving money on the table.

  • Are procedures in place to identify the ownership of the IP that your business uses? 
  • Are you living within the limits of any licenses to which you are a party?
  • In the case of copyrighted works, trademarks, and patented or potentially patentable works, have you registered them? 
  • Are all IP registrations current? 
  • What steps are you taking to police your IP to prevent others from infringing upon it? 
  • Do your contracts with third parties include the IP protections you need?
  • Are you complying with the IP related laws of relevant other countries?

4.    Do You Have a Good Team of Consultants in Place Who Can Watch Your Back?

By employing a good team of advisors, you will have the necessary documents in place and you may be able to delegate some of the preparatory work outlined in this article. The obvious players are your corporate and IP lawyers and CPA.   But your insurance agent and marketing specialist can be equally important advisors who can help you ask the hard questions and position your business in the most favorable light either to acquire or be acquired.

5.    Do You Know What Your Business Is Worth?

Offers to be purchased can come from a variety of unexpected places.  An insider may want to make a play for control or a larger firm may have identified your company as a strategic acquisition.   Similarly, you may conclude that it is important to expand.  Knowing what your business is worth will be helpful in evaluating an offer to buy you or in obtaining financing for an internal expansion.  

Therefore, regularly analyze the value of your assets.  Your CPA’s reports and even feedback from your banker should give you a good idea of the “fair market value” of your business as a whole and its various assets.  

6.    Are the Business’ Assets Transferable?

For valuable assets such as your IP and commercial leases and licenses, it is important to know whether they are transferable or assignable.  A periodic review should answer questions such as:  whether restrictions exist on the transferability of licenses; whether a new owner can use the software or data on which you rely; whether your commercial lease can be assigned in connection with a third-party acquisition.  Going forward, a word of advice:  when negotiating new deals, try to avoid restrictions on your ability to transfer assets.

Answering these questions should go a long way in helping you be ready should “the call” come from a potential buyer.  As with anything worthwhile, you need to take the time and make the investment in advance to have your business ready to respond with agility to whatever opportunities come along, including being bought.

Apple’s Woes in China Provide Lessons for All Trademark Owners
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Who would think that Apple does not own the trademark rights in “iPad”?  Few would dream of manufacturing a computer tablet and calling it an iPad.  Well, it appears that Shenzhen Proview Technology (“Proview”), a Chinese company, won a Chinese court decision that, in fact, it and not Apple owns the mark in China.  This ruling led to the seizure of iPads from some retailers and Proview is pursuing such enforcement in 30 other Chinese cites. See http://www.washingtonpost.com/business/technology/chinese-company-to-seek-ban-on-ipad-import-export-in-dispute-over-ownership-of-name/2012/02/14/gIQA3a2dCR_story.html?wpisrc=nl_tech

This situation for Apple is not only awkward but could also have a profound effect on its bottom line.  Worse, since all of Apple’s iPad tablets are manufactured in China, its sales inside and outside of China could be halted.

Apple claims to have bought Proview’s rights in ten different countries including China.  But was that the case?  It appears that Apple dealt with Proview Taipei, a Taiwanese company affiliated with Proview in Mainland China.  Did the Taiwanese company have the requisite authority to bind its Mainland affiliate?  So far it seems that Proview is winning the dispute, although Apple has taken an appeal.

What about smaller firms? Can anyone other than a Fortune 500 company learn from Apple’s travails in China?  Yes! 

  • Lesson 1: Just because you own trademark rights in the United States does not mean you own rights in the identical mark in any other country.   Registration of a mark with the United States Patent and Trademark Office (USPTO) offers protection only within the US borders.  If you plan to sell your goods or services in other countries, it is important to register your mark there. 
  • Lesson 2:  You need to know exactly with whom you are negotiating a trademark deal.  Do they have the requisite authority to sell or license the rights that you are negotiating to purchase?  Apple’s agreement with the Taiwanese company surely contained representations and warranties (“reps and warranties”) as to authority, and may even provide for the indemnification of Apple should the reps and warranties prove to be untrue.  So what?  Regardless of the liability of the Taiwanese company for breach of the reps and warranties, Apple still has a problem.  The money it might get from the Taiwanese company in no way would compensate Apple for its loss of the large Chinese market or its ability to have the product manufactured on the Mainland.
  • Lesson 3: Difficult as it is for large companies to protect their marks worldwide, it can also be a problem and a large expense for smaller firms.

If you hope to make a worldwide splash with your product or services, careful advance planning for how you will introduce your trademarks will be critical to avoid some of the dilemmas now being faced by Apple.