Locking it down

Originally posted 2008-07-10 00:01:41. Republished by Blog Post Promoter

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?  This post is actually about trademark registrations — but let me briefly reiterate my views about NDA’s, and, as we say, “connect up” the two seemingly unrelated topics.

I usually have a couple of points to make in response to the NDA question:

  1. 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.
  2. 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.

Security or death

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.

It is a thing, true, which the law may also protect in an enhanced way by virtue of registration. But registration of a trademark  is not “trademarking” any more than giving a speech in a tuxedo is “being bar mitzvah’ed.”

A sharp lawyer such as 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.

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Author:Ron Coleman

I write this blog.

14 Responses to “Locking it down”

  1. MDR
    July 10, 2008 at 7:46 pm #

    I am dubious of Shrum’s advice as it applies to publishers of fiction. Branding a script with a copyright notice, let alone a Rights Reserved notice, shrieks “amateur” to most professional editors, who are harried and overwhelmed and constantly on the look-out for reasons to lower their slush piles. I have the feeling that the sealed-envelope strategy would also not be greeted as a sign of professionalism. Paranoia, perhaps.

    I supposed what all this emphasizes is the gulf between the business world and the fiction-writing world: I have no idea if such strategies would impress an editor looking for a good business book, but rather doubt it.

  2. Pam
    July 12, 2008 at 2:47 pm #

    “These types of marks are commonly designated by use of the “™” and “®” symbols, indicating respectively that registration of the mark has been applied for and registered on the Primary Register. To be entitled to use these symbols in respect to a mark, a person must apply for and receive a federal or state trademark.”

    Oh, there are just so, so many things wrong with these two sentences. I’ll mention only one — “Primary” Register????

  3. August 13, 2008 at 3:52 pm #

    Ron, thanks for the compliments (I think) regarding my blog posting entitled “Hey, what’s the big idea? Protecting your ideas when submitting them to a third party.” I do appreciate the traffic.

    In response generally, let me first point out that obviously this was intended as a blog post, not specific legal advice. It was certainly not intended as either an exhaustive legal treatise nor a work or perfection — just some thoughts I wrote down on off the top of my head to give readers some ideas on protecting their submissions. I might give different advise to a specific client depending on the circumstances of his or her case.

    That said, I wanted clarify for you what I meant regarding the registration of “titles” and “slogans” and respond to that section of your post. While it may be true that the title of a book cannot be registered as a trademark for the book itself, that title can certainly be used and registered as a mark for other goods and/or services. The title “Gone With The Wind,” for example, has been used a mark for entertainment services as well as toys and other goods. As for slogans, Dr. Pepper’s “I’m a Pepper” is a registered mark for beverages (Reg. No. 3423707). So, I guess I would have to question your “general rule” that “you cannot get trademark protection for titles of fresh creative works or other things, such as slogans.” I would, in fact, advise a client to trademark unique phrases such as these, or at least file an Intent to Use application. Again, the article was intended to be oh so general, and not intended as exhaustive.

    Your point about developing a brand identity and moving slowly with regard to registration of a mark is, nonetheless, well taken and something that I frequently point out to my small business clients as well.

    By the way Ron, not to put too fine a point on it, but the word “trademark” is, in fact, also a transitive verb meaning to “register a trademark,” at least that’s how my dictionary defines it. And, while we’re on the subject of being overly critical, Pam, obviously I meant “Principal Register,” not “Primary.”

    Thanks again Ron.

  4. October 29, 2013 at 3:03 pm #

    You don’t need to file a trademark unless someone will infringe on it or someone else will file the name first. I have seen both … many times.

    a) I have clients who have filed too late. They might be a week, a month, or six months behind somebody else. It’s simple and cheap enough to file your application and get it in first than worry about it.

    b) I have seen competitors start to use the name. If you haven’t filed, you have to file and keep quiet until after publication and hope along the way it doesn’t get rejected or opposed.

    You can avoid the risk, or if it occurs, you can change your name earlier on in the process. It’s cheaper to change your name at the outset than to spend lots of money on marketing only to find you need to change your name later.

    File your trademarks early and often!

    • October 29, 2013 at 3:10 pm #

      Well, Michael, my view is pretty well articulated in the post.

Trackbacks/Pingbacks

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    [...] — and name it AZURE, WINDOWS AZURE or even WINDOWS ASSURE and see if they learn how trademark rights are acquired… the fun [...]

  2. Someone Stole My Startup Idea – Part 2: They Raised Money With My Slides?! « Steve Blank - December 7, 2009

    [...] consciously didn’t ask potential customers to sign a Non-Disclosure Agreement (NDA). In Customer Discovery we were learning as much from them as they did from us. And we figured [...]

  3. Someone stole my startup idea « TheWaterRat - December 12, 2009

    [...] consciously didn’t ask potential customers to sign a Non-Disclosure Agreement (NDA). In Customer Discovery we were learning as much from them as they did from us. And we figured [...]

  4. Y Combinator Newest! - June 21, 2011

    NDA's and IP are nice, but they
    don't build businesses http://bit.ly/lIpjMo

  5. Paul Alan Levy - July 22, 2011

    Lots of good sense from @RonColeman here http://t.co/3QdA7qw

  6. ipnews - July 26, 2011

    Winklevosses vs. Silicon Valley — no $$ for "big ideas" @techcrunch http://t.co/2p21hIx | Or for brilliant brands: http://t.co/fqeVW90

  7. Nina H.Lanina - July 8, 2012

    RT @RonColeman : Locking it down http://t.co/6J56euPa

  8. Amateur trademark filings, gauzy brand aids | LIKELIHOOD OF CONFUSION® - August 20, 2013

    […] A couple of quibbles.  If you’re a regular reader, you’ll know I’m going to sic on number 4, “filing too late.”  My view is that this is almost never a problem, because trademark rights are based on priority of use, not filing or registration.  I criticized at length another blog post asserting a similar thought, by another trademark lawyer whose work I respect, a while ago. […]

  9. Update (and clarifications) about the SLANTS appeal | LIKELIHOOD OF CONFUSION® - October 25, 2013

    […] Finally, as the TTAB opinion itself made clear, it made no determination — nor could it — as to whether THE SLANTS is “a trademark” of The Slants — which it most assuredly is.  If you are not clear on the difference between “a trademark” and a “trademark registration,” start here. […]

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