Three Chords and a Lawsuit: A Brief History of Guitars and Trademarks

As many readers may know, a trademark need not be a name or a logo.  A trademark can be almost any element that identifies your goods and distinguishes them from your competitors’ goods.  Even the shape of the product itself, or the shape of some specific component or element of the product, can serve as a trademark provided the configuration of that feature is not functional in some way.

The GIBSON LES PAUL guitar - one of the most recognized, and most copied, guitars in the world.

The musical instrument industry, being as competitive as any other, has taken advantage of this fact by registering “configuration” trademarks.  As a musician and compulsive guitar freak aficionado myself, I thought it might be interesting to examine the way that guitar trademarks have helped to shape the industry.

Of course, traditional “brand name” trademark disputes have played their own role in the development of the guitar industry.  Indeed, Fender Guitars’ iconic TELECASTER guitar – the original solid-body electric guitar and the signature axe of rockers like Keith Richards, Bruce Springsteen and Joe Strummer – was originally called the BROADCASTER.  Soon after the guitar’s introduction Fender received a cease-and-desist letter from the good people at Gretsch, who used BROADKASTER as a trademark for drums.

Fender quickly switched over to the TELECASTER mark, after a transition period in which it sold a small number of guitars with the BROADCASTER sticker removed and thus no name sticker on the headstock.  Because of their extreme rarity the Fender BROADCASTER guitars, along with the nameless guitars (dubbed “No-Casters” by guitar buffs), command a huge premium in the vintage guitar market.

Copy Guitars – Where the Action Is

In fact, however, infringements of actual trademark names are relatively rare in the guitar industry.  No one is selling CIBSON or VENDER guitars, to my knowledge.  The real action, and the most interest, lies with the issue of so-called “copy” guitars. 

The FENDER STRATOCASTER - another iconic model, also widely copied.

Some background:  Guitarists are nothing if not reverent of the past, and thus there are a limited number of iconic guitar designs.  Most of these date from the 1950s, the dawn of the electric guitar era.  Gibson’s LES PAUL, SG and ES-335 models, Fender’s TELECASTER and STRATOCASTER guitars, various RICKENBACKER brand guitars – these are among the few truly iconic guitar models.  In recent decades, PAUL REED SMITH guitars, named after the company’s founder, have joined those elite ranks. 

Almost from the beginning Gibson and Fender, makers of most of the legendary models, chose not to challenge copy guitars unless the copy was virtually identical to the original. By the term copy guitars, I mean lower-cost (often much lower-cost, and usually foreign-made) copies of the “big name” guitar models.

Even beginning guitarists want to look (if not, unfortunately, play) like their guitar heroes.  Therefore, most beginners want an axe that closely resembles one of the celebrated big-league guitar models mentioned above.  As a result, each copy manufacturer tries to get as close in appearance to those famous axes as possible, without provoking an infringement challenge.

The RICKENBACKER 12-string: Kerrrrrraannngggg! It's been a hard day's night...

Some companies, such as Ibanez, started out as copyists before succumbing to infringement threats and developing their own models.  Many now would rank some IBANEZ models as iconic guitars, subject to copyists of their own.

Personally I am a fan of the higher-quality copy guitars, of which there are many.  In my humble opinion there’s nothing in my hacker’s technique that requires a multi-thousand dollar guitar, especially when I can get 80% of the instrument for 10% of the price.

Who Protects What?

Many of the elite guitar manufacturers have sought protection against the most slavish copyists by registering the appearance or configuration of their guitars.  More specifically, they have sought protection for certain specific elements of the guitars.

In recent years, with growing awareness of the competitive advantages of trademark registration, the guitar companies have increased the number of elements they register as trademarks.  Generally speaking, the top-shelf companies have sought protection for guitar body and headstock shapes.  It can generally be said that each manufacturer seems to have drawn a line in the sand and focused upon preventing the reproduction of one or two particular features of its flagship models:

Gibson energetically enforces its rights in the "open book" design at the top of its guitar headstocks.

Ÿ  Gibson jealously protects the “open book” shape at the top of its headstocks, as well as the particular shape of the cutaways on its legendary LES PAUL and SG models.  (Cutaways are the body indents on one or both sides of the neck, which allow a player easier access to the highest frets when soloing.)

Ÿ  Fender protects headstock shapes, and especially those of the iconic STRATOCASTER and TELECASTER models.  The company recently attempted to reverse the course of history and seek registration protection for its STRAT and TELE body designs.  Fender failed in that attempt when a large number of other guitar makers opposed the applications.  The gist of the other makers’ argument was that Fender had allowed decades of widespread copying of those body designs, and as a result the configurations did not distinguish Fender’s guitars from any of the countless copies.  See the allegations in one of the oppositions here.

If your guitar's headstock looks like this, it'd better be a real FENDER STRATOCASTER.

Ÿ  Paul Reed Smith chooses to protect its headstock, its signature “birds in flight” fretboard inlays, and the beveled edge of its cutaway (see more below.)

Ÿ  Rickenbacker, whose legendary guitars were widely used by the Beatles and the Byrds, is one of the few guitar makers that has protected both body shapes and headstock shapes for decades.  Rickenbacker also traditionally has been far more energetic in pursuing copyists than its peers, with the result that there are very few Rickenbacker copies to be found.

My “Lawsuit” Guitar Is Worth An Extra Hundred Bucks!

At certain points in the past (especially the 1970s), the major guitar companies have responded to particularly exact copy guitars by threatening or actually bringing trademark infringement suits.  The belief has arisen, whether true or not, that the major guitar companies were spurred into action by the equal or greater quality of the foreign copy guitars, and the resulting loss of market share for their much costlier products. 

The distinctive PAUL REED SMITH headstock.

I suspect that very few lawsuits actually were filed, but doubtless some cease and desist letters were sent.  Nevertheless, the phrase “lawsuit guitar” is bandied about quite freely by those selling used guitars on eBay and elsewhere, to lend a certain cachet and to seek a little extra in price.

Big v. Big

Notwithstanding the foregoing, it’s not always the big guys going after the little-guy copyists.  Occasionally, the battle is Big v. Big.  In 2001, Gibson sued Paul Reed Smith Guitars, alleging that PRS’ “Singlecut” model infringed Gibson’s rights in the configuration of its LES PAUL guitar.  In my own opinion, the Singlecut looked no more like a Gibson LES PAUL than countless other copy guitars.  Nevertheless, Gibson prevailed at the trial court level and for a time PRS was forced to stop making the Singlecut model. 

Gibson saw its judgment overturned by the 6^th Circuit Court of Appeals, however.  The appellate court emphasized Gibson’s courtroom concession that “only an idiot” would confuse the two models at the point of sale.  PRS immediately resumed marketing the Singlecut model.  It may come as no surprise that guitar buffs, ever sensitive to tiny nuances of relative prestige, have come to distinguish the original “pre-lawsuit” Singlecuts from those that came later.

PHOTOS COURTESY OF FLICKR USERS MRBILL (STRATOCASTER headstock and guitar), BGVJPE (Gibson and PAUL REED SMITH headstocks), ETHAN PRATER (LES PAUL headstock) and BANJO D (RICKENBACKER guitar), ALL UNDER THIS CREATIVE COMMONS LICENSE.

Cybersquatting, Part 3: The UDRP Alternative

My previous two articles in this series have dealt with proceedings by trademark owners against cybersquatters under the Anticybersquatting Consumer Protection Act, or “ACPA.”  The ACPA has been inserted into the Lanham Act, the U.S. federal trademark statute.  As a result, successful plaintiffs under the ACPA can select from a range of remedies available under the Lanham Act. 

Lanham Act remedies, however, often are not the most efficient way to combat cybersquatting.  As a result, we now will discuss an alternate approach offered by the Internet Corporation for Assigned Names and Numbers, or “ICANN.”

Take advantage of the UDRP alternative and you'll be "master of your domain" again in no time. Wait, what?

UDRP Alternative

ICANN is the organization that governs the assignment of domain names by the individual registrars.  ICANN offers what often is a less expensive and more efficient – if narrower – remedy against cybersquatters.  This approach is called the Uniform Domain-Name Dispute-Resolution Policy, or “UDRP.” 

The current rules governing UDRP proceedings are published at the ICANN site.  A new set of rules have been approved and will take effect for UDRP proceedings filed on or after March 1, 2010. 

The UDRP currently applies to all .com, .net, .org, .biz, .info, .coop, .museum, .coop, .aero and .name top-level domains, and some country code top-level domains.  No one can register any domain name under one of these top-level domains, regardless of the registrar, without agreeing to be bound by the UDRP.

UDRP procedures provide disputants with a cheaper and quicker arbitration proceeding rather than a court proceeding.  Under the UDRP policy, the domain name registrar (not the cybersquatter) is required to transfer the domain name to the trademark owner, if the complaining trademark owner prevails.

UDRP Procedures

UDRP cases are heard by arbitration panels supplied by UDRP “providers,” organizations approved by ICANN for that purpose.  The complaining trademark owner selects the provider. 

The arbitration panel can include one or three members – unless one of the parties requests a three-member panel, the panel will comprise only one member.  A three-member panel is more expensive, but may be worth the cost as the parties get to have a say in the members of a three-member panel.

In order to prevail, the complaining trademark owner must demonstrate these facts:

1) The complainant has established trademark rights in the claimed mark;

2) The domain name is identical or so similar to the complainant’s trademark as to cause confusion;

3) The alleged cybersquatter has no legitimate interest in the domain name, and

4) The alleged cybersquatter registered the domain name in “bad faith.”

In a UDRP proceeding, a panel will consider several non-exclusive factors to assess bad faith, such as:

a)  Whether the domain name owner registered the domain primarily for the purpose of selling, renting, or otherwise transferring it to the complaining trademark owner;

b)  Whether the domain name owner registered the domain name to prevent the trademark owner from using the mark in a corresponding domain name, if the domain owner has engaged in a pattern of such conduct; and

c)  Whether the domain name owner registered the domain primarily for the purpose of disrupting the business of a competitor; or

d)  Whether by using the domain name, the domain owner has intentionally attempted to attract, for commercial gain, internet users to the registrant’s website, by creating a likelihood of confusion with the trademark owner’s mark.

Results and Remedies

The UDRP need not be the final stop for the complaining trademark owner.  If he is unsuccessful in his UDRP arbitration, he is not precluded from bringing a federal law suit against the alleged cybersquatter under the ACPA. 

On the other hand, if the alleged cybersquatter loses in the UDRP proceeding, she has ten days to bring suit if she wants to prevent the domain name registrar from transferring the domain name.  Upon receiving notice that the losing domain name holder has filed suit, the registrar will take no further action until it receives notice that the suit was settled or decided.

The UDRP provides a quick and effective remedy against cybersquatters, with decisions generally rendered within about two months.  One limitation of the UDRP approach is that it does not provide for monetary damages, attorneys fees or costs – only the transfer or cancellation of the domain name registration.  In many cases, however, that may be the most important remedy for the trademark owner. 

In any event, many trademark owners prefer to invoke the UDRP procedure, which usually is significantly less expensive than a federal law suit under the ACPA.

PHOTO COURTESY OF FLICKR USER LANUIOP, UNDER THIS CREATIVE COMMONS LICENSE.

Cybersquatting, Part 2: What Must I Show To Prevail Under The U.S. Anticybersquatting Act?

My last article discussed cybersquatting, and the remedies available in U.S. federal court under the Anticybersquatting Consumer Protection Act, or ACPA.  Here, we will consider what you must be able to demonstrate in order to win a case brought under the ACPA. 

Be ready to make these points when you get to court. And don't wear that blouse.

In the previous article I pointed out that the ACPA defines cybersquatting (which the statute, a part of the Lanham Act, refers to as “cyberpiracy”) as “registering, trafficking in, or using” a domain name that is identical or confusingly similar to another party’s distinctive trademark, “with a bad faith intent to profit from that mark.”  If the complaining party’s trademark is deemed a “famous” mark under the law, cybersquatting also occurs where the domain name would “dilute” the famous mark by tarnishing or blurring the public’s perception it. 

So if you believe your trademark is being cybersquatted, this definition sets up several hurdles for you to clear in order to show an ACPA violation.  Let’s think through them, in order of importance.

Bad Faith Intent

 Most importantly, you must be able show that the defendant acted with “a bad faith intent to profit” from your mark.  But how do you demonstrate that the defendant had such a bad faith intent?  As you might guess, cybersquatters rarely cooperate by admitting that fact.  

The ACPA, anticipating this, provides a number of circumstances that will be taken as evidence of a bad faith intent: 

Ÿ  Where the domain has not been used for a bona fide offering of goods or services, and the defendant offers to sell it to the trademark owner for a profit.  (Many cybersquatters try to avoid this by setting up a site under the domain that features some relatively generic content or links.) 

Ÿ  Where the defendant provided false contact information when registering the domain, or thereafter has failed to maintain correct contact information with the registrar. 

Ÿ  Where the defendant has registered a number of domain names that are identical or confusingly similar to the marks of other parties.  Or, 

Ÿ  Where the defendant intended to divert consumers from the trademark owner’s website to a site that harms the good will represented by the mark (whether for commercial gain, or in order to tarnish or disparage the mark.) 

This demonstration that the defendant operated under a bad faith intent to profit from your trademark is critical.  You won’t win an ACPA case unless you can make that showing.

 Distinctive Trademark

 The next important showing you must make as an ACPA plaintiff (admittedly, some might say it is most important) is that your trademark is distinctive.  The ACPA says that your mark must be “distinctive at the time of registration of the [offending] domain name.”  It specifically includes personal names, provided they are distinctive of your goods. 

Distinctiveness, in trademark terms, means that the mark is capable of identifying your goods or services, and enables consumers to distinguish them from those of your competitors.  If your mark is highly descriptive of your products, or if it is a surname, or if it is used by others in your field, then it probably will not pass the distinctiveness test. 

Bear in mind that your mark need not necessarily be registered to be protected under the ACPA.  Unregistered marks will be protected, as long as they are distinctive.

In addition to being an important threshold requirement in and of itself, the distinctiveness of your mark also is a factor in the “bad faith intent” determination.  The ACPA also provides some factors, all of which bear upon the distinctiveness of the plaintiff’s mark, that tend to show an absence of bad faith intent: 

Ÿ  Where the defendant has trademark rights of her own in the mark; and 

Ÿ  Where the trademark is the personal name of the defendant, or a name commonly used to identify him. 

(The ACPA also makes special provisions to prevent the dilution of so-called “famous” trademarks by cybersquatters.  For the sake of brevity here, I will leave consideration of that aspect for a later article on the topic of trademark dilution.) 

Registering, Trafficking In, or Using

 It should be a fairly straightforward matter to demonstrate that the defendant has registered, trafficked in, or used the domain name in question.  The important thing to remember here is that the bad faith intent mentioned above needn’t have been present at the time the defendant registered the domain name.  It can arise later, at any point when he is using the domain in connection with a website, or when she is “trafficking in” (i.e., offering to sell) the domain. 

So even if you originally registered the domain in good faith, you can become a cybersquatter if your later use or your attempt to sell the domain crosses the boundary into bad faith intent to profit.  The same is true if your use of the domain later crosses that boundary. 

The ACPA also carefully defines “trafficking in” as including (without limitation) transactions such as “sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration.” 

As discussed in the previous article, the ACPA provides a wide range of remedies.  Unless you can satisfy these three requirements, however – bad faith intent, distinctiveness of your mark, and registering/trafficking/using – your defendant will not satisfy the ACPA definition of a cybersquatter, and your law suit will fail.  The proofs necessary to elicit actual or statutory damages are a separate aspect of the suit, not considered here but good fodder for another article if anyone expresses interest.

My next article will cover a popular alternative to the ACPA approach: proceeding through arbitration under what are called the Uniform Domain-Name Dispute-Resolution Policy, commonly referred to as the “UDRP” approach.  Stay tuned!

PHOTO COURTESY OF FLICKR USER LANUIOP, UNDER THIS CREATIVE COMMONS LICENSE.

What is Cybersquatting, and What Can I Do If I’ve Been Targeted? (Part 1)

So, you’re ready to take your business onto the Internet, and the most sensible way to do that is to register your well-known trademark as a domain name.  You try to do so, but learn that another party already has registered your trademark as a domain name.  Your brand may have been cybersquatted.  What are your options?

By the time you see the flags, it may be too late - cyberpirates have already made off with your valuable trademark.

“Cybersquatting” is a term that was coined to describe the bad faith registration and use of another party’s trademark as a domain name, with the intent to profit somehow from the good will of that trademark.  The term harkens back to the practice of illegal tenants “squatting” in derelict or condemned buildings.

A party injured by cybersquatting can sue under the Anticybersquatting Consumer Protection Act, or ACPA.  The ACPA became a part of the U.S. trademark statute, also known as the Lanham Act.

(I should point out here that trademark owners injured by cybersquatting also can proceed through arbitration under what are called the Uniform Domain-Name Dispute-Resolution Policy, commonly referred to as the “UDRP” approach.  I will be discussing the UDRP approach in an upcoming related article.  This approach can be quicker and significantly less expensive than proceeding under the ACPA, though it also offers a narrower range of remedies.)

The ACPA defines cybersquatting (which the statute refers to as “cyberpiracy”) as “registering, trafficking in, or using” a domain name that is identical or confusingly similar to another party’s distinctive trademark, “with a bad faith intent to profit from that mark.”  If the complaining party’s trademark is deemed a “famous” mark under the law, cybersquatting also occurs where the domain name would “dilute” the famous mark by tarnishing or blurring the public’s perception it.

Bear in mind that the domain name used by the cybersquatter need not be (and in fact, often is not) identical to the trademark at issue.  One practice that domain pirates quickly adopted is “typosquatting,” which involves registering common misspellings of a trademark as domain names.  When an unwary web-user accidentally types the misspelled trademark, he or she is taken to the pirate’s site.  The ACPA is broad enough to cover this practice, provided it can be shown that the misspelled domain name is confusingly similar to the plaintiff’s trademark.

The ACPA’s definition of cybersquatting creates several issues of proof for the would-be plaintiff, which I will discuss in an upcoming article.  For now, let’s examine the remedies that the ACPA provides for those injured by cybersquatting.

If a violation of the ACPA is found, the court can order the forfeiture or cancellation of the offending domain name, or its transfer to the trademark owner. The trademark owner also can recover up to three times his or her actual damages.  Actual damages include any profits the cybersquatter made through his use of the domain, along with any losses sustained by the trademark owner through the cybersquatters activities (such as lost sales or harm to the mark’s reputation.)

The trademark owner also has the option of foregoing actual damages and instead taking statutory damages (similar in nature to the copyright statutory damages I discussed in an earlier post) in the amount of $1,000 to $100,000 per domain name.  The statutory damages amount is left to the court’s discretion – presumably, the more odious the cybersquatter’s actions, the higher the award.

Finally, in suitable cases a successful plaintiff can get an injunction prohibiting further cybersquatting by the defendant, and in “exceptional cases,” can also recover attorney’s fees from the cybersquatter.

Where the cybersquatter is offshore and therefore not subject to the jurisdiction of U.S. courts, a provision of the ACPA allows the injured party to proceed “in rem,” or directly against the domain name itself.  In these cases the only remedy is that the domain will be awarded to the plaintiff.

If your trademark has been cybersquatted, the ACPA provides a range of legal options you can use against against the pirate.  My next article will discuss what your law suit must show, in order to get an award of the remedies provided by the ACPA.  Another related upcoming article will discuss the UDRP approach and evaluate the respective benefits of ACPA vs. UDRP.  Stay tuned for more discussion!

PHOTO COURTESY OF FLICKR USER REITVELD, UNDER THIS CREATIVE COMMONS LICENSE.

How Is Trademark Infringement Decided?

 My last post discussed the issue of brand proximity, by which I mean the co-existence of other identical or similar brand names for other goods or services.  I mentioned that it is not necessary that there be no other users of your name whatsoever.  Rather, there should be no other users of the mark for goods or services so similar to your own that consumers will believe there is a connection between the two products – either that they are made by the same company, or that there is some other connection such as licensing or approval of one use by the other user.

Don't be misled - in real life, she takes off the blindfold and examines your mark and your motives.

This (mistaken) belief that some connection exists between two trademarks is the key to a court’s determination of the issue of trademark infringement.  If the two trademark uses at issue are similar enough that it is reasonably likely that consumers will make such a mistake (a circumstance that is called “a likelihood of consumer confusion” in trademark jargon), then the court will find trademark infringement.  In that case, the court almost always will issue an injunction, ordering the later (or “junior”) trademark user to stop using its mark.  In some cases, the court also will order the infringing later user to pay damages to the earlier (or “senior”) user.

How does the court make this determination?  Does it try to project itself into the minds of the public?  Of course, judges cannot read the minds of the purchasing public and formulate a collective viewpoint.   Instead, the judge considers a list of factors formulated by courts in prior decisions.  The list of factors may vary slightly depending on which U.S. Circuit Court of Appeals rendered the decision applicable in your area, but the similarities greatly outnumber the minor differences.

Generally, the court will consider these factors:

Ÿ  the strength of the senior user’s mark (if the plaintiff’s mark is generic, highly descriptive, or widely used by unrelated parties, the law suit will fail);

Ÿ  the similarity of the marks themselves (often the uses are not identical – so how similar are they?);

Ÿ  the similarity of the respective goods and the trade channels through which they are advertised and sold (e.g., are both products sold through sporting goods stores?);

Ÿ  whether consumers have evidenced any actual confusion between the two uses (“Dear Sony – I bought your SONNY brand HDTV and it’s a piece of junk!  I’ll never buy anything from you again!”); and

Ÿ  what level of care the public is likely to use in buying such goods (generally speaking, cheap goods = little care, while expensive goods = greater care.) 

For obvious reasons, the court will first satisfy itself that the plaintiff’s mark is strong.  The next thing the judge will assess is the degree of similarity of the marks and the goods or services.  If they are not reasonably similar, the court will not look any further. 

Beyond these initial considerations, the most decisive of these factors probably is that of whether any actual consumer confusion has occurred.  Since the test for infringement is whether a likelihood of consumer confusion exists, a court obviously will not need to see much actual confusion before deciding that such a likelihood exists.

Another “super factor” that the court may consider is the defendant/junior user’s intention in selecting the mark.  If the evidence suggests that the defendant chose the mark with the intention that confusion occur (to provide a competitive boost, for instance, by riding on the plaintiff’s brand good will), then in some jurisdictions the court will go as far as to assume that the junior user succeeded in that effort, and find infringement.

Of course, other factors may come into play, and these factors are all indirect ways for the judge to assess the likely consumer reaction to the two brands at issue.  Usually, attorneys on both sides of the law suit will also conduct consumer surveys to try to get a direct read on purchaser understanding.  If properly conducted to avoid leading those surveyed, these surveys can be a potent tool in proving or disproving infringement.

PHOTO COURTESY OF FLICKR USER MIRA66, UNDER THIS CREATIVE COMMONS LICENSE.

How Brand Proximity Affects The Selection of a New Trademark

When selecting a new brand name, some marketers mistakenly believe they cannot use any mark that anyone else uses.  That is not correct.  It usually is not a requirement that no one else uses the mark, for any product or service.  With some exceptions for “famous” marks, a party’s trademark rights generally are limited to the goods or services on which that party uses the mark, as well as products and services that are so similar that consumers would assume a connection between the uses.

So, for instance, two companies probably could coexist in using the mark CREST if one used it for toothpaste and one used it for windbreaker jackets.  This is because the respective goods are so different that no one would be likely to assume the uses are connected in some way.  The two brands could coexist in the marketplace without any consumer confusion.

"This CHEVROLET brand dental floss is great stuff!"

On the other hand, you would not be well advised to adopt the mark CREST for dental floss, in the face of an existing use of the mark for toothpaste.  In this case, the goods are similar enough that consumers are reasonably likely to mistakenly assume a connection between the goods – either that both products are marketed by the same company, or that the well-known CREST toothpaste brand has licensed or otherwise approved the use of CREST on dental floss.  The case might be less clear if the uses were somewhat less directly related – a CREST cosmetic dentistry office or a CREST body wash product, for instance.

You should take these concepts into account when considering new brand names.  If you have fallen in love with a proposed name, don’t necessarily cross it off your list just because someone else is using the mark on unrelated goods.  Instead, consider whether the other party’s goods are similar enough to your own to cause a likelihood of consumer confusion. 

At the same time, remember that those enmeshed in an industry may have a distorted view of what goods are related or unrelated.  A former colleague of mine once had an opponent in the computer industry assert something to the effect of, “there’s no way consumers would be confused, the products are completely unrelated – yours is a sixteen-pin device and ours is a seventeen-pin device.” 

Try to bear in mind that a court probably will consider the issue from the perspective of a consumer far less aware than yourself of the subtle divisions within your industry.  Hopefully you have hired a seasoned trademark attorney to help you down the brand selection path – this is a very good time to pay close attention to his or her advice.

Earlier I mentioned special treatment for famous marks.  A brand that is “famous” (a legal determination), is given a sort of super-protection under the trademark law, which forbids the use of that mark even for unrelated goods or services.  This is to prevent the dilution of the single meaning of the mark in the minds of the public, by “blurring” that association.  Dilution is a broad enough topic to deserve a separate discussion at a later date.  Suffice it to say, however, that it probably would be a bad idea to choose COCA-COLA as your brand name for any type of goods or services.

PHOTO COURTESY OF FLICKR USER D SHARON PRUITT, UNDER THIS CREATIVE COMMONS LICENSE.

Statutory Damages Help Small Copyright Owners Fight Large Infringers

Suppose you are an as-yet-unknown songwriter or author.  Or perhaps you are an artist or creator of any kind.  You have submitted your work to various parties, hoping (unsuccessfully, so far) that someone will pay you to publish or reproduce it.  Suddenly you happen across a blatant copy of your work being sold by someone else, perhaps a large and powerful company.  How can a small copyright owner, who perhaps has not even marketed his creation yet, stop such parties from infringing the copyright in the work? 

The Copyright Act provides some nice stones for your sling, David.

In the past, small copyright owners in this position had major problems.  First, litigation is expensive – there’s no changing that.  To make things worse, if a small party could not prove actual damages (such as lost sales) and/or the defendant’s profits, even a winning case could yield no money award after all the expense of the law suit. 

So, what happened when a large infringer was caught openly ripping-off copyrighted material?  The bad guy could sit back, fold his arms, and dare the copyright owner to sue – secure in the knowledge that it would not be worth the trouble and expense to bring the suit.

In 1976, Congress changed the U.S. Copyright Act to “beef up” an existing but previously insufficient remedy for copyright owners in these circumstances.  That remedy, called “statutory damages,” allows a winning copyright plaintiff to recover an amount of compensation per work infringed, as opposed to compensation for actual damages or an account of profits or damages based on the number of infringing copies. 

The statutory damages provision allows the winning plaintiff to recover “a sum of not less than $750 or more than $30,000,” per infringed work, according to what the court views as fair and just.  If the copyright owner can prove that the infringement was intentional or “willful,” the court has the discretion to increase the award to as much as $150,000 per work.

In addition, the Copyright Act now includes a provision allowing a winning plaintiff to recover from the copyright infringer its full cost to bring the law suit, including attorney’s fees.  Again, this remedy is awarded in the court’s discretion

Taken together, these provisions allow a small “David” to take on a large and powerful copyright-infringing “Goliath.”  These remedies discourage blatant infringers from “rolling the dice” on defending an infringement suit.  In effect, they encourage even large parties to take seriously any legitimate copyright claim asserted by a copyright owner of any size.

There is, however, one very important point to bear in mind regarding these provisions.  The Copyright Act does not allow an award of statutory damages, nor of attorney’s fees, unless the copyright in the work was registered before the infringement began.  There is an exception if the infringement begins less than 3 months after the first publication of the work – as long as the registration also occurs within that 3-month period, statutory damages and attorney’s fees can be awarded.

Obviously, you don’t have to be a small player to take advantage of the statutory damages and costs-of-suit provisions, of course.  But they sure can come in handy if you are a small party, trying to assert your rights against a major player.

Important Early Steps On The Brand Selection Path

Today I’ll discuss some important steps, from a legal and practical perspective, that you should take early on in the brand selection process.  My discussion here assumes the trademark has already passed whatever consumer testing you may wish to conduct.

The most critical pre-decision step, of course, is to have an attorney experienced in the area of trademark law search the mark.  He or she will obtain the necessary searches for you, evaluate the results, and provide you with an opinion as to whether the mark is available for your use and registration.  Basically, you need to determine whether anyone else is using the mark or a confusingly similar mark, and whether anyone else has registered or filed an application to register the mark. 

Bear in mind, also, that it may be necessary to investigate some of the references that turn up in the search report.  It may be that the mark in question is no longer in use, or that it is marketed in such a way that your intended use can coexist without creating confusion.  On the other hand, it may represent a serious problem.  This is a step that cannot be rushed, because it’s possible that rushing such an inquiry can tip your hand and actually provoke an issue.

Those are the more formal steps in the process.  There are other steps, however, that can be taken in advance of the formal searching.  Sometimes these steps may streamline the process or even rule a mark out so that no effort and cost will be wasted on that candidate.

First, it is a good idea to generate a list of several acceptable brand names, ranked in order of preference.  This allows you to move down the path to clearance in a parallel fashion.  That way, you won’t have to start over from the beginning of the timeline if your favorite name is knocked out along the way.

Second, prior to searching you may want to investigate whether the mark has any slang or otherwise unsavory meaning in the country or region where the product will be marketed. 

Don't forget to consider any, ahem, potential pictographic significance for your new brand.

For this, it is best to turn to local contacts in that area.  More than one marketing campaign has screeched to a halt when the marketer realized, late in the introduction process, that in the target country its soon-to-be heralded brand could not be uttered in mixed company!  Consider the image at right as an example (probably apocryphal, in this case) of what can go wrong without a look-over by sharp and knowing eyes.

Finally, you may want to conduct your own pre-search investigation into whether any other party is using your desired mark.  This could be as simple as checking trade directories in the industry, or running the mark through search engines such as Google and Yahoo.  If you turn up a use on highly similar or related goods or services, it may be best to cross the mark off of your list.

 For reasons discussed in an earlier post, it is best to do this as early as possible, before you spend money on implementing or advertising the mark you’re interested in using.  That way, if the search identifies a problem with the mark, you will not have wasted time, money and effort on an unusable mark.

Domain Names To Use Non-Latin Characters?

Will English-speaking Internet users – and Americans in particular – really frequent websites that require them to use an entirely new character set?  That question will soon be answered.

At a meeting this week in Seoul, the Internet Corporation for Assigned Names and Numbers (ICANN) – the non-profit group that oversees domain names – is expected to approve international domain names that can be written in languages other than English.  This would allow for the first time domain names in languages that do not use Latin characters, such as

Are you willing to find a way to type Arabic characters, just to visit someone's website?

Arabic, Korean, Japanese, Greek, Hindi and Cyrillic.  New applications for domains in non-Latin characters will soon be accepted, and the new domains likely will come online in mid-2010.

I am lucky, in many ways, to have been born into a culture that uses English as its predominant language.  For better or worse, America’s cultural predominance has caused English to be considered (until now, at least) the international language of commerce, and it’s no coincidence that the “.com” at the end of most domain names stands for “commerce.”  That predominance has, of course, extended to the Latin character script used by the English language.

So, will this development result in a drastic change to the Internet, as most of those reading this blog understand it?  I anticipate that it will not.

As an attorney, I’ve probably had more cause than many to delve into “Insert Symbol” and other unusual-character functions of Microsoft Word.  As a result, I know that it is possible – to a greater or lesser extent – to use my existing keyboard and software to input certain non-Latin characters.  But widespread use of domains rendered in non-Latin characters will require changes to existing keyboards and/or software widely used in the Western world.  At the very least it would require substantial re-education of Americans and other Westerners about that hardware and software.

Obviously, I am aware that many websites exist that are rendered in non-Latin characters, just as I know that there are websites rendered in German, Portuguese, and other Latin-character languages that I do not speak.  I make little or no use of those websites simply because I don’t understand the content, and I suspect that many if not most Americans are like me in that regard.  It seems tremendously unlikely to me that anyone will go to the trouble of adopting a non-Latin-character domain name only to present content in English. 

ICANN’s President and CEO estimates that, of the 1.6 billion Internet users worldwide, more than half use languages that have scripts based on alphabets other than Latin.  My suspicion is that this development will be a convenience to those users that will have little impact on most Western users.

Avoid Last-Minute Branding Disasters!

If only I’d called my trademark attorney sooner!

 

Too often, a business makes a final decision on a new brand name without going through the steps that are necessary to ensure (as much as possible) that no issues will arise with the name.  I’ll address the recommended steps to trademark clearance in another post, but here I’d like to discuss why it’s a good idea to start the trademark clearance process well before a final decision is needed. 

Trademark infringement concerns are no fun no matter when they arise.  But can you imagine a worse marketing disaster than learning on the eve of a product introduction (or worse still, after the introduction) that you cannot use the name you have chosen?  Trust me, you do not want that misfortune.  

At that point, you have made a great many marketing and advertising decisions that focus on or even key off of the brand name.  You also have already spent significant money behind the mark – for instance, packaging and signage is already in process, if not completed.  In addition, you and/or your investors may have developed an emotional investment in the mark.  Add time pressure to the mix and it’s not a situation that lends itself to making objective, well-reasoned decisions.  

Some of the steps required to make an informed decision on a brand name cannot necessarily be completed overnight.  Start early and don’t rush the process.  Ultimately, you want to base the decision to use your chosen mark on solid reasoning, not on omigosh-we-have-no-other-options-now-so-let’s take-our-chances-and-hope-for-the-best!