Every lawyer who practices in the intellectual property area is asked frequently how to go about protecting a unique or creative idea that someone fears is at risk of being stolen by a prospective investor, partner or advisor to whom early disclosure is necessary. During the dot-com bubble, everyone walked around, it seemed, with an NDA (non-disclosure agreement) ready to be beamed from his Palm. Is an NDA still the answer?
I usually have a couple of points to make in response:
- Most people to whom you are considering making disclosure are in the driver’s seat, and will not sign a non-disclosure agreement because doing so almost invites a claim if they end up getting involved in someone else’s similar project years later. Or they won’t sign just because you need them more than they need you.
- Your idea isn’t really all that hot. Successful new businesses owe far more to (a) entrepreneurs’ focus and dedication, (b) adequate capitalization, (c) great timing and (d) the grace of God (not in that order), than to having come up with truly original concepts.
These and similar arguments are well developed in an article from a few years ago called “The Cult of the NDA,” written (I think) by a fellow named Peter Leppik, which article lawyer readers of this blog should bookmark.
Comes now an entertainment lawyer named Barry Neil Shrum who has written a pretty thoughtful piece on some approaches that actually might work. It’s worth taking a look at. But I must note disagreement with his advice about trademarks, which unfortunately will reinforce, unintentionally, a number of common misconceptions about trademarks that are “out there.” And that means it’s time again to try to set things straight.
Early on Barry presents a fair summary of what you need to get trademark protection, though more on his allusion to securing trademarks for “titles” below. He helpfully makes it clear that federal trademark registration is “tedious, complicated and costly,” but doesn’t explain why, or explicitly address the concept of the Intent to Use application, which seems central to his ultimate advice.
And that leads to my beef — the following recommendation that Barry puts first on his list of otherwise very good, otherwise endorsed-by-LIKELIHOOD OF CONFUSION® suggestions:
(1) First, trademark all slogans, titles or name, at the very least your state level, but preferably at the federal level;
Unfortunately, this suggestion is densely packed with problems because Barry has not elucidated some fundamental facts about trademarks.
First things first. “Trademark”? Not a verb. A thing only, which is protected by the law upon use and the establishment of secondary meaning and which the law may also protect in an enhanced way by virtue of registration. Registration is not “trademarking” any more than giving a speech in a tuxedo is “being bar mitzvah’ed.” A sharp lawyer like Barry knows this, but we must teach it clearly, not because LIKELIHOOD OF CONFUSION® cares about obscure doctrine but because clients and the public have to understand how the law requires them to “earn” and protect this kind of intellectual property right.
Second, Barry acknowledges that getting a registration, if you could get one under these circumstances, takes approximately forever in entrepreneurial / new media time. So how can we advise someone to “first” get that trademark while crucial creative and original air is leaking out of that flimsy balloon of originality? Ironically, here we may even have it backwards: If anything, you can probably get a quick-and-dirty state registration faster, cheaper and based on a lot lower standard than a big-boy USPTO registration, and if what you want to do is at least make a record of early originality origination on your part, that is probably not a bad idea.
Third, it is not clear what Barry means about “titles” and trademark. As a general rule, you cannot get trademark protection for titles of fresh creative works or other things, such as slogans.
Fourth, spending energy and money on trademarks early on in the startup cycle is almost always a mistake. I can’t say it enough:
For well over nine out of ten new businesses, the odds of an idea sinking or swimming on the strength of a trademark are slim indeed, and slim too is the war chest most entrepreneurs bring to the battle of free enterprise. Better to have a business plan, a product or service that people want, the ability to deliver it and to scale it up, the capitalization to fertilize all that and to pray that Providence smile on your efforts. If in the process you develop something worth protecting as a trademark, that mark has already been storing up goodwill and secondary meaning and is enforceable as against infringers under state law and Section 43(a) of the Lanham Act. If it would be a good, business-justifiable use of what is still early-stage capital to register your trademark at this point, by all means do it.
And not a minute before.
And finally, there’s this point: Trade identities… brands… marketing approaches… target markets… graphic identities… product configurations… these things frequently change early in the entrepreneurial cycle. What a mistake it would be to spend money on a trademark registration for a trademark that becomes irrelevant, or potentially even a marketing or legal burden, when final configuration of a brand identity and its associated trademarks have matured and no longer look like their high school yearbook pictures — the pimply-faced versions you “trademarked.”
Now Barry Shrum’s article is more directed at authors and other creators than typical goods or services providers, but, again, most of the former really have no trademark claims at all. But so much of this issue is so frequently misunderstood that it seemed worth discussing here, even at the expense of qualifying our recommendation of an otherwise very helpful piece on protecting nascent creative rights in the fast-moving opportunity / rent-seeking environment we operate in today. Doing so is this LIKELIHOOD OF CONFUSION®’s … trademark, after all.
(Hat tip to Gordon Firemark.)
UPDATE: Think Wink. Winklevoss, that is.