Mind bobbling!

I’ve been known to sound the alarm about the rush to register trademarks, and all the more so to register anticipated trademarks.  I argue that — oh, forget it, even I’m tired of saying this over and over again.   Here’s what I said, one of the times I said it:

Yes man?

For well over nine out of ten new businesses, the odds of your 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. Prove to yourself and the world that you 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 the smile of Providence 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.

So there’s that.   On the other hand, what exactly kind of advice is … this?!:

Some lawyers will get all excited and encourage (demand!) that you register your trademark. This involves paying a bunch of money, filing a bunch of forms and earning an ® after your name instead of the ™. While the ® does give you some benefits by the time you get to court, it doesn’t actually increase the value of your trademark. And you can wait. So, when you come up with a great name, just ™ it.

It doesn’t sound so different, does it?  Well, it was written by the icon, human trademark Seth Godin™, famous on the Internet for being famous, whose name I hear all the time and seems to be a guru of some sort though I missed class the day when they taught us why.   Well, I think Seth Godin™ is pretty much just about right there.

But Seth Godin™’s bit of advice comes to me via my very agitated friend Steve Baird at the Duets Blog, who is not at all happy with Godin on Trademark.  Steve promised, in fact, to have at that last excerpt in a later post (which he did do — here).  But for the moment, it suffices for him to take umbrage, and hard, at the suggestion by Godin that trademarks are a tad overused here on the Internet:

If we’re in the idea business, how to protect those ideas?

One way is to misuse trademark law. With the help of search engines, greedy lawyers who charge by the letter are busy sending claim letters to anyone who even comes close to using a word or phrase they believe their client ‘owns’. News flash: trademark law is designed to make it clear who makes a good or a service. It’s a mark we put on something we create to indicate the source of the thing, not the inventor of a word or even a symbol. They didn’t invent trademark law to prevent me from putting a picture of your cricket team’s logo on my blog. They invented it to make it clear who was selling you something (a mark for trade = trademark).

“Misuse”?!  Steve says like this:

While there are certainly some greedy trademark lawyers in the world, and some that overreach on behalf of their client brand owners, even honorable and ethical trademark attorneys worth their hourly rate know that federal protection against dilution for truly famous marks was added to U.S. trademark law about fifteen years ago. At least for marks satisfying the difficult fame standard, these kinds of trademarks come darn close to owning the brand name in gross, that is, in connection with any goods or services.

Yes, Steve is more accurate than Seth Godin™, who seems to be more editorializing when he says “misuse” than he is describing the actual state of the law.  Steve makes an important point.  It’s one that he made in the seminar on LIKELIHOOD OF CONFUSION in which we both participated (and to which he invited me–thanks again!)(UPDATE:  PowerPoints here!) last week in Minneapolis, and which kind of made me lose the color in my face (the color in my hair is already gone) when I heard him say it:

With respect to what trademark law was designed for, and while I don’t consider this to be a news flash any longer, well prior to dilution protection being added, U.S. trademark law was amended to make clear that much more than confusion as to source is covered. All the way back in 1962 the Lanham Trademark Act was amended by striking language requiring confusion, mistake or deception of “purchasers as to the source of origin of such goods and services.” Moreover, a much broader scope of confusion protection was codified in 1989 in Lanham Act Section 43(a), which protects against trademark likelihood of confusion not only as to source, but as to affiliation, connection, sponsorship, association, and/or approval. This additional scope of trademark protection makes perfect sense given the current commercial realities of trademark licensing, franchises, co-branding, affiliate marketing, and OEM relationships.

He’s right, again.  No, it’s not a news flash, but sometimes… Steve, you’ll see.  When you get old, you … you forget, sometimes.  But indeed, today’s trademark law, both in the statute and in the cases, truly reflects “the current commercial realities of trademark licensing, franchises, co-branding, affiliate marketing, and OEM relationships.”

But of course I got my color back.  (The face color only.)  Because to make his legal point, Steve makes Seth Godin™ and LIKELIHOOD OF CONFUSION®’s policy point.  And when I read his words closely, the pondering of them brought me back to that golden mean between Steve and Seth Godin™ … which I mean is probably closer to the latter. That’s because the amended Lanham Act’s broad, broad language of “affiliation, connection, sponsorship, association, and/or approval” may look like it has left confusion as to “origin” in the dust.  Still, in my book, a trademark ultimately must speak to the consumer protection of interest at the heart of the Lanham Act to be a trademark.  No, nobody on the Dallas Cowboys really made this official bobble-head figurine.  No, no one on the Cowboys or even in the Cowboys corporate organization (there is a difference you know!) has any meaningful connection to how thick of a gauge of metal wire was used for the spring that makes that disquieting bobble (disquieting considering what we’ve learned about NFL heads).  But:

This bobble-head still must be more than just the officially designated piece of junk of the Cowboys, equivalent in every respect to all the other pieces of Official NFL Landfill Fodder® with a silver and blue star stamped on it except for being “sponsored” or “official.”  It has to be.  Because as Steve acknowledges, while the trademark dilution statute grants a right in gross to the rich, no one would dare suggest that trademark infringement is the same, would they?  No, they wouldn’t; for even the NFL itself felt it had to say, as I robustly teased it over, the following Red Face Special ’round Super Bowl time:

Anastasia Danias, an attorney for the league, said that U.S. businesses lose about $250 billion a year in revenue because of the counterfeit market.  . . . “It hurts. To the fan, they’re getting an inferior product,” Danias said. “It’s made much more cheaply and without attention to detail.”

What would make a distinguished person such as Professor Danias say such a silly thing about what she says is a quarter of a trillion dollars worth of sports trinkets?  Precisely the fact that she knows and understands trademark law, and despite the language quoted by Steve she is a good enough advocate and thorough enough of an IP brain to realize this:  If you can’t make, at the end of the day, some argument suggesting that the consumer has a coherent reason to care about why a team or a band or a chocolate company did “approve” or “sponsor” or bless this refrigerator magnet or scapular or muffin pan, you haven’t made a trademark case.

So in her client’s interest the NFL’s lawyer would sooner say “all unlicensed merchandise bearing NFL trademarks is of inferior quality to all licensed merchandise” than “only the NFL gets to make money on this junk.”   Besides sounding plausible to someone such as a newspaper reporter who has just scribbled down the “$250 billion” claim like a stenographer,  it also gives the NFL a “quality control” peg on which to hang its helmet–a reason for a trademark to be.

So I’m still a bit behind the curve here, but am looking forward to reading Steve Baird’s second installment in his assault on Seth Godin™, because Steve is no slouch with this trademark law stuff either.  And, in fact, unlike Seth Godin™, he’s a lawyer, even if he’s not, just yet, a trademark himself!

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Author:Ron Coleman

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8 Responses to “Mind bobbling!”

  1. March 9, 2010 at 10:58 pm #

    “Still, in my book, a trademark ultimately must speak to the consumer protection of interest at the heart of the Lanham Act to be a trademark.”

    Amen

  2. March 10, 2010 at 2:37 pm #

    Ron:
    I believe that you and Seth Godin have much the better of it when you suggest that there is often no need to rush the trademark registration process. Certainly references to dilution and Section 43(a) do not support your friend’s perspective.

    Of the many flaws and ironies associated with the dilution doctrine perhaps the most ironic is that those for whom the doctrine most readily attaches don’t need it. Is COCA COLA famous? Yes. But long before the federal dilution dcctrine staggered into existence Coke was using traditional trademark law and likelihood of confusion to stop virtually any use of the terms COKE or COCA COLA. Fame comes from the marketplace not from registration. If I have a famous unregistered mark( highly unlikely) registration would simply be a conduit to reflect what had already been achieved not a basis for being deemed famous.

    As for the expansion of Section 43(a) this actually supports your view since Secton 43(a) is avaialble to any person- registration is not necesary to state a claim.

    The one place where registration may be advisable is where use has not begun. If a company large or small is about to adopt a term that may be on the borderline between descriptive and suggestive it may be useful to reserve the term since others will undoubtedly come up with a similar/identical term. Also, if the term meets heavy weather from the trademark office then the company can rethink their choice before the actual introduction of the product or service.

    Dick Troll

  3. Tal Benschar
    March 10, 2010 at 9:00 pm #

    One area where having a registration is a requirement is counterfeiting. In order to take advantage of the special counterfeiting remedies (ex parte seizures, mandatory treble damages and fees for willful counterfeiting, and statutory damages) you must have a registered mark. Section 43(a) will not cut it then.

    (Granted, that is not usually an issue for start-up companies.)

    In addition, I have found that a registration is helpful in writing cease-and-desist letters. A registration means that someone at the PTO has reviewed your claim and thinks that, indeed, you have a valid claim to own a trademark. There is, after all, a statutory presumption of valdity (which after 5 years of use becomes incontestable!). I have found that C&D letters are often taken more seriously when there is a registration to back it up.

  4. March 12, 2010 at 12:10 am #

    Ron, thanks again for charming the Mpls crowd with your wit and knowledge, not necessarily in that order. Glad to see you made it back home with your wits about you and your wit generally intact.

    On the issue of my relatively calm and un-agitated effort to update Mr. Godin’s thinking on the subject of the purposes (yes, plural) of the Lanham Act, as amended, it appears the difference between your view and my view may be what I noted the law is and what you believe it should be.

    Actually, with respect to what it should be, I’m fine with the amended Lanham Act language leaving source or origin “in the dust,” to quote you, because it is becoming a rare business where the name on the product identifies who actually “makes a good or service,” to quote Seth. And I’m ok with the NFL being the only one who can sell cheap junk with their trademark on it, even if the counterfeit stuff matches their quality. They earned the right to control it. I get to decide who plays in my front and backyard too.

    I’ve also re-read Seth’s post and while I appreciate that your position is one of policy, you may have given Mr. Godin too much credit, hence the need to bring his thinking up to date on what “trademark law is designed to” do.

    On the different issue of whether registration is worth the $275 filing fee, even to an entrepreneur scraping nickels together, we may have to agree to disagree. While I certainly don’t fall into the camp of those that Godin claims “demand” their clients register their marks, it really is a good value for what you get, for the reasons outlined in my original post, among others.

    It seems to me that most of those who discount the importance of registration focus on the registration as a sword, and forget that it is a shield too. Section 43(a) certainly lessens the sword benefit of the registration as a weapon to combat infringements. But, what about the shield aspect, the defensive nature of a registration?

    Tell the entrepreneur who merely incorporates under a name after having it “cleared for use,” but doesn’t invest in the $275 filing fee to secure it nationally with an intent-to-use application, that the filing wasn’t important when the rug is pulled out from under him or her, as another either beats them to the market with product under a confusingly similar name, or worse yet merely files an intent-to-use application for a confusingly similar mark on the day before the entrepreneur’s product launch. I wouldn’t want to be the one to explain what “just tm it” bought him or her.

    My two cents.

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