Category: Trademark

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By: Bill Harding

So your company would like to license its trademark to another company.  Sounds simple, right?

Wrong.  A legal “twilight zone” exists between 1) a licensor adequately policing the licensed use of its trademark, and 2) a franchisor providing significant assistance to or exercising control of a licensee’s business.

A trademark identifies goods to consumers by both their origin and their quality.  The federal Lanham Act requires a licensor of a registered mark to control the quality and uniformity of goods and services associated with the licensed mark to ensure the mark is not used by a licensee in “such a manner as to deceive the public.”  Failure of the trademark owner to exercise sufficient control may constitute abandonment of the mark and result in loss of trademark protection.  A license without sufficient quality controls is termed a “naked” license.

But by taking steps to exercise sufficient control over licensee use of a mark, the licensor may accidentally fashion a trademark license that constitutes an “accidental” franchise agreement.  Such a mistake may be very costly for a mark owner, as applicable franchise laws may impose unexpected registration and/or disclosure requirements on the licensor, and/or may regulate important aspects of the business relationship between the license parties, such as termination and non-renewal of the agreement.  The parties to a trademark license agreement cannot avoid an accidental franchise by calling their agreement by another name or by including provision language that disclaims the existence of a franchise.

Defining “Franchise”

Although federal and state jurisdictions that regulate franchises vary in their approaches, creation of a franchise generally consists of three elements:

1) grant of use of the franchisor’s mark in association with franchisee’s business,

2) a franchise fee paid to the franchisor by the franchisee, and

3) control exerted by the franchisor over the franchisee.

If all three statutory elements are present, a franchise relationship exists regardless of the intentions of the parties.

Be careful out there, aspiring trademark licensors.  Better yet, get a lawyer!

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Using unlicensed trade dress is just not Koo, man.

The look of a product, all by itself, is sometimes the basis for a trademark, sometimes this is referred to as “trade dress”. Trade dress is a form of intellectual property that generally refers to characteristics of the visual appearance of a product or its packaging that signify the source of the product to consumers.

Under the Lanham Act a product’s trade dress is legally protected. For example, the shape, color, and arrangement of the materials, though not the garments themselves, of a children’s clothing line may be protectable trade dress. Similarly, the design of a magazine cover and the appearance and décor of a restaurants may be protectable.

Under section 43(a) of the Lanham Act, a product’s trade dress can be protected without formal registration with the PTO. In relevant part, section 43(a) states the following:

“Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which
(A) is likely to cause confusion, or to cause mistake, or to deceive [...] as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or
(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,
shall be liable in a civil action by any person who believes that he or she is likely to be damaged by such an act.”[9]

Often the design of a product is protected by a patent, but sometimes, the appearance of a product or a particular feature of a product can be registered and/or enforced as a trademark.  To distinguish it from a design patent (a patent granted on the ornamental design of a functional item like ornamental designs of jewelry, furniture, beverage containers, and computer icons). Usually, you have to use the “mark” enough so that it may be inferred that consumers perceive it just as they would a brand name.  The most famous example is probably the Coca-Cola bottle, which was once protected by a design patent, but is now protected by a trademark.

The standard is the same for trade dress and “design” trademarks as all other trademarks. To get trademark protection, the trademark owner must show that the mark is not likely to be confused with other trademarks for items in the same general class. Unlike design patents, these trademarks can last indefinitely as long as they are used in commerce. Nevertheless, items can be covered by both trademarks and design patents.

Design patents are only granted if the design is novel and not obvious for all items, even those of different utility than the patented object. Unlike “design” trademarks, the validity of design patents is not affected by whether or not the design is commercialized.

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By Daniel Davidson

The goodwill of a company is its most valuable asset, and when you think of goodwill you think of trademarks.  Well, maybe not, but McCarthy, the guru of trademarks, would.  In a recent letter authored by a senior trademark counsel for Jack Daniel’s, the strength and goodwill of the Jack Daniel’s marks were exactly what she was attempting to preserve.

Dubbed the “Nicest Legal Letter Ever,” the cease and desist letter sent to Patrick Wensink ever so nicely asked Mr. Wensink to remove the alleged infringing cover of his newly released book, Broken Piano for President.  The cover is very old no. 7ish.

It seems as though both parties are going to benefit from this overly kind assertion of trademark rights.  The new author is getting quite the free PR from this letter going viral and Jack Daniel’s is being held ahigh for their gracious tactics.  Trademark attorneys could even take a note on how to go about trademark policing.  Albeit, the letter does make for a good read, and an unrealistic example of what you would receive if you were trademark infringing perp.

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Sports fans remember what happened just four months ago, though it seems like four years ago. Jeremy Lin became a phenomenon, and why not? From zero to hero, Harvard-drafted benchwarmer to MVP candidate, and then he was gone. But his brand remains.

And Lin wisely registered his catchphrase with the United States Patent and Trademark Office soon after blowing up on the court. Of course, Lin doesn’t need to trademark anything to use the term on everything from fragrances to aluminum water bottles, but registering a mark allow him to prevent others from using his mark.

Despite Lin’s injury and the fact that he basically hasn’t played since March, the market is there. Like most marketable celebrities, Lin has defended his marks, sending cease and desist letters to those trying to profit from his celebrity in any way imaginable, or maybe just being trademark trolls.

According to the New York Times, the USPTO recently sent five attempted registrants initial refusals, on the basis that they lacked Lin’s consent to register the trademark and convey a false connection to him.

As a distinctive term which inherently references him, Lin basically gets the benefit of the doubt that the term “Linsanity” is his.

The real question is whether Lin has any staying power. Without the benefit of surprise, will Lin be able to outplay opponents on a level court? Will he play in New York next year? The Asian market is ripe for the picking, now that Yao Ming is retired. Will Lin be as popular in Asia as David Hasselfhoff is in Germany, even if his skills are mediocre at best? The appeal in Asia remains strong, and during the Linsanity craze, Coca-Cola Co. added courtside advertisements in Chinese at Madison Square Garden to capitalize on Lin’s appeal.

For marketing purposes, Lin would be wise to stay in New York, though it remains to be seen whether New York is still interested.

 

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By Daniel Davidson

Catchphrases have become the new gold rush.  Proof in point: when the “one percent” marched on Wall Street, everyone rushed to trademark “Occupy Wall Street.”  When seal team 6 assassinated Osama Bin Laden, Disney rushed to pan up the trademark “Seal Team 6,” and if Disney is doing it, it is to make money.  Recently settled, David Hester of the reality t.v. show Storage Wars and rapper Trey Songz went to the court to see who in fact owned the rights to the catchphrase “YUUUP.”

So what is a catchphrase?  Dictionary.com defines the word as, “a phrase, as a slogan, that comes to be widely and repeatedly used, often with little of the original meaning remaining.”  If you have a group of friends, I am sure a catchphrase has developed between you all.  Now, why would a catchphrase be important to trademark?  Can it be trademarked?

Catchphrases can be trademarked as long as it identifies and distinguishes the goods or services, offered by the owner of the catchphrase, from those of others, and if it indicates the source of the goods or services.  Simply putting the catchphrase on a shirt would not fulfill this requirement though, and would most likely be refused registration due to being merely ornamental.  In order to fulfill the requirements of a trademark or service mark, the catchphrase would need to be displayed on a tag, display associated with the goods or services, etc.  Questions of proper uses of catchphrases as trademarks or services marks would be best answered by a trademark attorney.

Have catchphrases been trademarked before?  Of course.  Below are some catchphrases that you may recognize.

Let’s Get Ready To Rumble” registered in 1995.

That’s Hot” was registered by Paris Hilton in 2007.

Thug Life” was registered by Amaru Entertainment, Inc. (Tupac) in 2011 but was filed for in 1996.

LIFE IS LIKE… A BOX OF CHOCOLATES” was registered by Paramount Pictures in 2012.


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TUESDAY, MAY 21, 2013

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