Company name and logo: to change or not to change?

“Should I change my logo?” It’s a question I hear a lot from up-and-coming business owners concerned about whether their chosen name or logo infringes on another brand which may be protected (it’s not about changing your logo to update your brand, as the picture may suggest. It’s the only one I could find that’s free to use and communicates what I wanted to!). The answer to the question depends on several factors, among which the legal test is only one component, that is, whether your mark is likely to confuse potential consumers as to the source of the branded products. While much information exists on the internet regarding the legal test, what is often failed to be mentioned is that the legal test by itself only tells you whether you would prevail in a full-blown trial fought by two motivated litigants, which is seldom the case.

After you get the legal answer, as someone in charge of a brand you will need to consider other things:

  • How long have you and the other trademark owner actually owned your trademarks?
  • How litigious is the other trademark owner?
  • How difficult would it be to negotiate a concurrent use agreement?
  • How much time and energy would it take you to rebrand your whole company?

Without knowing and considering how vested you and the other side are, changing your logo may be a task ranging from simple (e.g. – brand new internet startup using solely internet marketing) or extremely challenging endeavor (e.g. – 4 year old company producing 20,000 pairs of shoes per year using internet, print, and TV advertising), and that will weigh in on whether you will want to change your logo or not.

Thus, to answer the question of whether you need to change your branding, you will need to consider not only your legal position but also the costs of changing your brand in terms of time and money spent on re-educating your potential customer base as well as the loss of recognition in your brand due to the change.

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When to translate your trademark in an application

Translations of trademarks in a non-English language matter in trademark applications before the USPTO. A non-English mark which may be understood by American consumers needs to be translated in the trademark application. Perhaps more importantly, even if the mark seems to be a non-English language, the application needs to clearly state that that mark in fact has no meaning in a foreign language.

The USPTO typically requests for a translation of the mark if the examining attorney thinks that the mark might be a non-English word. This may be because the word follows a structure that may seem like a foreign language, even if it in fact not a real word. For example, SCHLOGBOATAUFT might seem German to an examiner because of its letter structure, and that examiner would ask you to translate it in your application. In this case, the example is not an actual German word at all. But since it seems like it may be seen as a German word by a USPTO examiner, I would indicate that this mark in fact has no meaning. This can be done in the section of the trademark application called “Additional Statements”, one of the first steps of the application (you would need to click a link to access it from within the application).

If you are making your own word up to be your brand name, I would at least use Google Translate to help rule out possible foreign meanings when applying for a trademark registration.

Also keep in mind that this translation issue must be dealt with in your initial application in order to preserve TEAS PLUS application status (essentially a $100 discount from the full price of an application) if you filed the application as a TEAS PLUS application. If you do not address it and the examining attorney issues an office action to clarify the translation issue, you may be required to pay an extra fee if you made a TEAS PLUS application.

Ultimately, only the translation issue has been discussed here and there are other issues which may affect your trademark application. This is something a trademark attorney can help you with before you apply, and just one of the many ways that an experience attorney can actually help you cut costs and save time when you’re developing and protecting your brand.

Internet Startup Challenges in Branding and Trademark Protection

When it comes to my area of expertise, protection of branding, internet startups begin their business lifecycle with a unique challenge: trademark protection is a step taken jurisdiction by jurisdiction, but internet startups are often launched to the entire world instantly. One the one hand, you should protect your trademark in your home country, but even though the rules may be different in future markets, a startup probably doesn’t have the funds to file for trademark protection in every potential future market. Let’s take a look at what kinds of potential issues I’m referring to.

We’ll take the US and European Union markets and jurisdictions for example. It may be clever to brand your statistical analysis app CURVE and then register that as a trademark in the US. However, once success comes to your company and you begin expansion efforts into the EU, you’ll find that you won’t be able to register your brand as a CTM (the EU-wide trademark) because the word CURVE is likely to be pronounced as koor-vah in Poland, which refers to someone practicing the oldest profession in the world and is therefore unregistrable as a CTM. This means you’ll either have to operate your business without trademark protection (ie, the ability to stop others from using your brand to market your products) or you’ll need to rebrand your product in the new market.

From time to time, I make a shameless plug for my own legal services, so here goes! As a California trademark lawyer with more than 2 years of experience working directly with EU trademarks, I can offer the type of insight and long-term strategy that usually comes at a prohibitive price from law firms with overseas partners. Kuehn Law offers the unique combination of local, lean counsel attention and fees with the foresight of an international firm. If you’ve ever considered expanding your business into the European market, send me an email to ck@cliffkuehn.com and I’d be happy to spend some phone or Skype time with you to issue spot. Of course, your emails will be treated with confidentiality.

SCOTUS and infographic on the Hana Bank case on “tacking”

I just skimmed the transcript of the Hana Bank case on “tacking” before the Supreme Court and provided comments and some of the interesting dialogue below. The oral hearings for the case took place about two weeks ago on December 3, 2014. The graphic below is my attempt at using visual design tools to help make cases easier to understand (comments/criticisms welcome).ON NOW (1) This case is about “tacking”, which often occurs in trademark infringement cases where a earlier user has a trademark and then later alters/updates the trademark to stay current. For example, think of the Pepsi logo and all of it’s evolutions. In between the original and updated trademark, a second user begins using a trademark and then sues the earlier user when it begins using the updated trademark. “Tacking” can be used by the defendant who is the earlier user as a defense, essentially claiming that the rights of the updated trademark began at the time of the original trademark. Thus, the trademark protection of the original mark is “tacked on” to the protection of the updated mark.

However, tacking is only allowed where the updated mark is not too different from the original mark, or in legal terms, the marks must have “the same commercial impression”. To best explain the facts of the Hana Bank case, I’ve made a graphic which I think will make sense of the matter. I would be really interested in hearing your comments about the clarity and even the design of the graphic.

As you see there, the main question in the case is whether the determination of the commercial impression between the original and updated marks should be for a judge or a jury.  At the trial level, the determination was made by a jury, and the Petitioner in the Supreme Court was arguing that the question should be one for the judge, and not the jury. The Justices got right into the meat of the matter early on in the hearing:

Justice Ginsburg: “to determine whether there is [a, in] the magic words, ‘same continuing commercial impression to consumers,’ then the one’s that’s better equipped to make that determination are people who are consumers, not jurists…Even the Federal Circuit case that [supports the Petitioner says that the

is whether the old and new mark convey the same continued commercial impression to consumers.”

The Petitioner’s lawyer tries to answer, unsuccessfully: “the Federal Circuit adds an additional factor [to the analysis], which is the aural and visual appearance, do the two marks have the same aural and visual appearance? And what I think that shows is if the courts are not looking at this as a factual comparison…”

Justice Ginsberg finishes his sentence: “aural and visual to whom? To the people likely to buy these products, not to the judge.”

Lastly, I thought the Petitioner interestingly brought a case to the discussion which I thought did not support his case at all. The Petitioner was using a case where the original mark was SERVICEMASTER and was later updated to SERVICEMASTER CLEAN. In between, the second user began using MASTER CLEAN. In that case, tacking was allowed for the earlier user, which I thought was not good for illustrating Petitioner’s point that judges can make good calls in determining “same commercial impression”. SERVICEMASTER and SERVICEMASTER CLEAN are far too different to be considered as having the same commercial impression, where the standard is usually quite tight and doesn’t allow for widely varying marks to benefit from tacking.

Due to the high volume of questioning by the Justices of the Petitioner, I’d wager that this case will be in favor of the Respondents, making tacking a question of fact for juries. We’ll know in a few months. I’d be interesting in hearing from others who’ve been following this case, especially if you saw the oral hearing differently.

The Zone of Natural Expansion: Stealth Goods and Services

This post is part of a series for non-U.S. lawyers who may need to deal with U.S. trademarks via the Madrid Protocol system, and hopefully will be useful in explaining a trademark concept related to goods and services which is particular to the U.S. system (but do let me know if your jurisdiction has something similar, I’d enjoy learning about it!): the zone of natural expansion.

Trademark rights grant a senior user the right to preclude registration of the mark (or similar mark) on goods and services which are identical or similar to those which are claimed in the trademark registration. The doctrine of natural expansion goes one step further: it allows a senior user to oppose a junior user’s application for the same or similar mark for goods and services which the senior user might reasonably expect to offer under the normal expansion of the senior user’s business under its mark. Specifically, this means that a senior holder of a trademark may have rights in goods and services which are not even claimed in the registration.

The doctrine applies regardless of whether the senior user has actually expanded its business, and regardless of the senior user’s attention. Key to the analysis is the perception of the average consumer: would a consumer believe that the junior user’s goods and services emanate from the senior user? If yes, the senior user will likely be successful in opposing the junior user’s application.

Demonstrating that the junior user’s goods and services lie within the zone of natural expansion is in many ways similar to the analysis of the relatedness of goods and services, which is the policy of USPTO examiners in ex parte cases. Examiners will look at, inter alia:

  • if the junior user’s area of business is a distinct departure from the senior user’s business, that is, requiring a new technology or know-how
  • nature and intended purpose of the goods and services
  • the channels of trade
  • whether the classes of customers are the same
  • whether the goodwill of the senior user will carry over into the second area
  • whether other companies have expanded from offering the senior user’s goods and services into the junior user’s goods and services

Acceptable evidence in a zone of natural expansion analysis may be:

  • news articles and/or internet evidence showing that the relevant goods and services are used together or by the same consumers
  • marketing material showing the relevant goods and services being advertised together or sold by the same manufacturer or dealer
  • third-party registrations which cover both the senior and junior users’ goods

Instances where a senior user was able to establish that a junior user had imposed on the former’s zone of natural expansion:

Natural Expansion

Does your jurisdiction recognize a legal theory similar to this? I’d enjoy hearing about it via Twitter (@Tasteelaw) or email (ck@cliffkuehn.com).

– ck

Applying for Trademarks in the U.S. via the Madrid Protocol – Goods and Services

madrid
Here is a picture of Madrid, which has little to do with this post, but everything to do with Madrid.

If you are a non-U.S. company or lawyer and have filed or will file for American trademark protection through the Madrid Protocol system, this post is part of a series for you. Since most of my foreign trademark experience took place at the EU trademarks office (OHIM), the issues I choose to address in this series of posts will be pertinent those familiar with the Community Trade Mark (CTM) system, although many will be relevant to all non-U.S. trademark holders. Like all the content on the TM Eye Blog, I provide these posts as information only, and not legal advice. Note that refusals of or oppositions to extensions of protection must be responded to by an attorney licensed to practice law in the U.S.

Goods and services are a common issue faced by extensions of protections in the U.S. Prior to us getting to the issue, it is important for me to provide some background. The goods/services issue is partly due to the fact that the U.S. maintains a “use-based” system of registration, meaning that trademark protection is only granted for goods/services on which the trademark has been used. The practical effects of this are that goods/services claims generally need to be more specific than in, for example, the European CTM system. While a Madrid Protocol extension of protection in the U.S. may be applied for without actual use, the legal strength of the mark is highly linked to the use of that mark vis-à-vis the claimed goods/services.

Even though applications to the US Patent and Trademark Office (USPTO) must be submitted with proof of use of the trademark before a registration is granted, Madrid Protocol applications do not require this proof of use – at least not during the application phase. However, while Madrid Protocol applications have this advantage in the application phase, this advantage quickly disappears in terms of maintenance of the trademark registration. Registrations resulting from an extension of protection are still subject to the same rules of cancellation for abandonment as other U.S. applications, and thus trademarks granted an extension of protection must be used within a reasonable amount of time – or face abandonment and thereafter cancellation. Applications filed via the Madrid Protocol must also file a declaration of a bona fide intention to use the mark in commerce in the U.S., and later a specimen of use between the 5th and 6th years after the USPTO grants the extension of protection.

Most importantly, while a Madrid Protocol registration will allow the trademark holder to oppose other confusingly similar marks at the USPTO, the effectiveness of that registration in infringement proceedings will depend heavily on the use of the mark in commerce. Again, this is because use of the mark is a requirement for trademark protection: even though the USPTO recognizes a quasi exception to the rule for trademark applications, federal trademark law will not allow a trademark holder to get very far in court with a mark which has not been used for the goods or services it has been registered for.

Now that the prelude has been delivered, we can get to the heart of the goods/services issue: most jurisdictions around the world operate on a first-to-register trademarks registry system while the U.S. does not. Many of my counterparts in the EU, for example, share a trademark strategy that is counter to the very core of the use-based system in the U.S.: in a first-to-register jurisdiction, the goal is to name all the possible goods/services which may be offered by the trademark applicant. This is to secure trademark rights for the applicant in the future; the applicant will want trademark protection for whatever goods they decide to produce or services they decide to offer in the future. True, over a longer period of time they will lose protection of the trademark for goods/services which they do not offer, but at least for the first 5 years of the registration (in the CTM system), no use necessarily needs to be made.

In the U.S., the goal in claiming goods/services is to walk the line between an overly specific and overly broad claim. The former will provide a very limited scope of protection for the trademark holder, and the latter will result in a refusal by the USPTO. This strategy can clash with foreign registered trademarks which form the basis of a Madrid Protocol application.

Again using them as an example, many applications for extensions of protection in the U.S. for CTMs face the problem of being too broad, and often face provisional refusals for being too broad. The goods/services then need to be narrowed…but this is difficult in the case where a CTM owner has not yet begun using the mark for certain claimed goods/services. In this case, the goods/services claim should be narrowed down to only those which are currently or will soon be offered in the U.S. under the mark.

To sum up, if you are planning to apply for trademark protection in the U.S. via the Madrid Protocol, be prepared to know exactly what goods/services will be offered, in the U.S., within a reasonable amount of time after the extension of protection is granted.

European Apple Seeds

I’ve been meaning to write for quite some time now, but my talents in procrastination have accumulated into quite the beast, a beast to be dealt a small blow today.

Apple
Drawing from U.S. registration.
Apple for reals
Actual Apple store.

A recent Preliminary Ruling judgment handed down by the European Court of Justice (CJ), Case C-421/13, enticed me to battle the procrastination beast. The case involves a refusal by the German trademark office (DPMA) to grant trademark protection to Apple for the design of its Apple Store layout, depicted here. Apple appealed the refusal to the German Federal Patent Court, which then referred to case to the Court of Justice for a decision in the form of a Preliminary Ruling. In a Preliminary Ruling case, the CJ typically resolves legal questions about EU law which have an effect on EU Member State laws.

At issue were Articles 2 and 3 of the Community Trade Mark Directive, the primary EU legislation on trademarks. The former states that a sign must be “capable of being represented graphically” and that “the shape of goods or their packaging” is protectable as a trademark, so long as the sign can distinguish the services of one company from those of another. Article 3 bars from registration marks which are non-distinctive, descriptive, and customary in the language or practices of a trade, as well as shapes necessary to obtain a technical result, shapes which result from the nature of the goods themselves, and shapes which give substantial value to the goods. The DPMA refused trademark protection for the design for the Apple Store, reasoning that consumers would not perceive the layout of a store as an indication of origin, despite the fact that it may indicate the quality or price bracket of the products. Additionally, the DPMA considered that the design of the Apple Store was not sufficiently distinguishable from other electronics stores.

The CJ first reviewed established case law, stating that the subject matter of a trademark application must satisfy three conditions: it must be a sign, the sign must be capable of graphic representation, and it must be capable of distinguishing goods or services from one trader to another. The CJ then held that when a store layout departs significantly from the norms or customs of the concerned industry, it cannot be ruled out that that layout would allow the applied for goods/services to be identified as originating from a particular trader. The CJ also pointed out that although a store layout is capable of being a sign and may be graphically represented without a need for specifying size or proportions, an analysis must still be made regarding the distinctiveness of the layout, considering the goods/services and the relevant public.

On the issue of registrability for services, the CJ was more cryptic. The judgment explained that Apple contended that a mark for services intending to induce the sale of goods should be registrable, while the EU Commission argued that situations, in which the sole objective of the services is to induce customer purchases, should not lend to registration of a mark for those services. In the next sentence, the CJ curiously and immediately held that the layout of a store selling goods may also be registered for services where those services “do not form an integral part of the offer for sale of those goods”. Where is the analysis?

Ultimately, this judgment opens the EU door to registration of store layouts, which the USPTO has allowed for quite some time. It will be interesting to see how the distinctiveness and descriptiveness analyses will develop in the upcoming years. Would the EU find the following layouts registrable? The USPTO has.

Texaco
Texaco gas station.

 

Potbelly
Potbelly Sandwich Shop.