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Trademark Monitoring Scam: Don’t get dooped

April 8, 2011 by · Comments Off
Filed under: trademark, Trademark Articles 

Frequently our clients will call us up and ask why the USPTO sent them a bill for a couple hundred dollars directly to their house.  The clients will often notice we already charged them for the USPTO filing fees and ask why they are getting double billed.  The first time I heard this from a client it invoked worry and confusion, now it simply serves a reminder of the plentitude of scam artists out there ready to take the money of the unwary or unsuspecting.  Our clients generally don’t have any direct contact with the USPTO and it still tricks them, I can’t imagine how many self-filers this scam tricks into paying their “bill”.

So what is this scam?  Various companies with names like “World Trademark Association”, “American Intellectual Property Coalition”, or any other official sounding name send what appears to be a bill to people who have filed an application or registered a trademark with the USPTO.  While it may appear to be a bill, it is usually just an advertisement for the applicant or registrant to purchase trademark monitoring services.  The small font, black print, long block paragraphs, boxed entry fields, and general ugliness of the form is exactly what you would expect to find on a government form, however, not a flyer for the sale of services.

While the deceptiveness of these forms range from slightly confusing to completely fraudulent, even some of our most savvy clients have come to us for confirmation about what exactly the mailing is about.

How can you avoid these scams?  You generally can’t stop these scammers from sending you their junk, as the applicant’s address is included in all USPTO trademark applications.  However, the United States Patent and Trademark Office is the only government agency that will contact you about your trademark registration or application; if the mailing is not from them then it’s not an official mailing and it’s certainly not a bill.

To be clear, while trademark monitoring services are not required for trademark registration, as some unscrupulous companies may have you believe, many of these services are not a scam.  There are many legitimate companies out there that provide this service and it can be beneficial in protecting your marks.  A trademark monitoring service will periodically search the USPTO database for any newly filed trademark applications that may infringe on your mark.  These days they are mostly done by computer programs owned by the company offering the service.  While the USPTO will generally reject any trademark applications it determines are “confusingly similar”, there may be instances where the USPTO has OKed and application that you wish to challenge.  It is in these situations where a monitoring service is valuable.

If you’re interested in using this type of service shop around and be careful; most of these companies are not as highly regulated as a law firm and will disclaim liability if they make a mistake.  As a general rule we advise clients not to purchase this service from a company that sends out deceptive advertisements.

Are you getting sued? What getting a Cease and Desist letter means for you.

January 26, 2011 by · Comments Off
Filed under: law 

The dreaded Cease and Desist letter.  The Demand letter.  The C&D.  These are the tools in every lawyer’s repertoire when the client decides a private letter may accomplish their goals more effectively than a spending years and many thousands (or millions) of dollars in litigation.  Litigation is almost always preceded by a Cease and Desist letter.  The logic being: why spend time, money, and energy to have a judge order someone to do something that they would have agreed to anyway had you just asked (with the right persuasion, of course).

The vast majority of lawsuits end in a settlement.  Additionally, an untold amount of claims are settled even before a lawsuit is filed.  (Lawsuits are a matter of public record, but if a settlement is reached before a lawsuit is filed there is no public record of a settlement being reached.)

How do you know you’ve received a Cease and Desist letter?

Large companies can just forward legal looking documents to their in-house counsel or law firm on retainer.  For small businesses and individuals a potential lawsuit means a significant unbudgeted expense, even if it’s just paying a lawyer to tell you it’s ok to ignore the letter.  Knowing what you are looking at and its implications can be extremely important when establishing how best to respond to a Cease and Desist letter.

Here are some tell tale signs that the document you are looking at is a Cease and Desist letter:

  • You had to sign for it.  C&D’s will often be sent with a “return receipt requested” so there is proof that you received the letter.  This is not a requirement, however.
  • The letter contains language like “In light of your ongoing infringement we hereby DEMAND that you CEASE & DESIST all actions relating to…”.  Frequently (but not always) the term “Cease and Desist” will be right there in the letter.
  • Anytime a letter demands that you take an action (take down your website, pay $10,000, etc.) based on activity that they claim is unlawful it is likely a Cease and Desist letter.
  • The letter is on a law firm’s stationary and/or is signed by a lawyer.  (Lawyers will often follow their name with the abbreviation “Esq.”, though they do not have to.  Ex: John Doe, Esq.)

Understanding a Cease and Desist letter.

Lawyers frequently use language that is hard to understand or downright archaic.  If you aren’t familiar with reading legal documents your only option may be to hire a lawyer to interpret the letter for you.  Let me be clear: hiring a lawyer is your safest action for ensuring you don’t make a legal miss-step that may be detrimental to you or your business’ well being.  Even if the hereins, wherefores, run-on sentences, and legal code make the letter incomprehensible to someone with a sensible appreciation for the English language, there are still a few things you can learn from the letter before going to see a lawyer.

  • An important first question is: did a lawyer write this letter?  I’ve seen Cease & Desist letters written by non-lawyers that have a double dose of legal sounding words and no substance.  If a lawyer has written the letter it tells you two things: 1.) It is likely not an outright lie, as lawyers can lose their license to practice by making frivolous legal claims or sending out fraudulent letters (all lawyer jokes aside), and 2.) The person who sent the letter is fairly serious as they have shown their willingness to hire a lawyer to pursue the claim.  Just because a letter is not from a lawyer does not necessarily mean the sender is not serious about pursuing the matter further, however.  The sender can always hire a lawyer after they send the letter.
  • Do some research into who wrote the letter.  Are they writing on behalf of a company or an individual?  Is it the legal department of a Fortune 500 company, or Joe Schmoe from across town?  The bottom line is you want to find out how much money they are willing to spend.  The more money they have the greater the chance they are going to be willing to spend it on pursuing a legal claim against you (all other things being equal).  Be happy if you can’t find information about the sender on the internet.
  • Look for legal citations.  The citations will often look like “17 U.S.C. §205”, “Va Code Chapter 22, Section 3”, or “Marbury v. Madison”, amongst many other forms (Cornell has a good resource on legal citation if you’re having trouble going to sleep).  Individuals will often get form Cease & Desist letters off the internet.  Sometimes lawyers will offer a cheap version of a C&D which involves the lawyer filling out their own template and signing the bottom.  These form C&D’s will have a lack of citation, because citation to relevant law generally requires legal research.  If the letter you received does not use legal research as its foundation you can assume: 1.) The sender has not spent a great deal of money and/or effort on having the letter drafted, and 2.) The sender may not have a deep understanding (or any understanding) of their legal claims against you because they have not researched it thoroughly.  A lack of legal citation is a good sign for the recipient.

What is a Cease and Desist letter really?

A Cease and Desist letter is an offer to enter into a contract with the sender or the sender’s client.  That’s it.  The police are not involved, neither are judges or the courts.  You have no obligation to accept the terms of the offer, or even respond (though it is often in your best interest to respond).  The letter is not a public document, its form and contents are not specifically governed by law, and receiving a Cease and Desist letter does not mean a lawsuit has been filed against you.  (It is important not to confuse a Complaint or similar document that is filed with a court as a C&D.  If you think the document you received may be notice of a lawsuit being filed against you do not ignore it.  I strongly suggest you obtain legal advice if you think you might have been named in a lawsuit.)

A C&D is an offer to enter into a contract, and generally speaking a contract is an agreement between people or companies where each side exchanges promises to the other.  In the context of a C&D you may promise to pay the sender $10,000 and the sender may promise not to sue you.  The value of a lawyer is in telling you whether this contract is a good deal for you or not.  Of course, a refusal to enter into a contract with the sender of the Cease and Desist may end in you being sued.  However, not everyone that sends a C&D is prepared to take on the risk and expense of litigation, and it’s possible that the Cease & Desist sender may never contact you again.  Betting on them not filing suit can be a big risk to take, however.

Conclusion

Receiving a Cease and Desist letter is not the end of the world, it’s just a letter.  Even if it looks like gibberish you can still take the time to get some idea of the position you’re in.  Keep in mind, however, that there is no substitute for the advice of a lawyer, especially when it’s you or your company in the crosshairs.

What does ‘Use in Commerce’ mean in your USPTO trademark application?

January 14, 2011 by · Comments Off
Filed under: law, trademark, Trademark Articles 

Before a mark can be registered with the United States Patent and Trademark Office an applicant must demonstrate the mark’s “Use in Commerce”.  Simply meeting the evidentiary burdens of the USPTO application, however, does not necessarily mean your registered mark will stand up to an attack of the mark’s validity.  The concept of ‘Use in Commerce’ is essential for every trademark applicant to understand, as a misapplication of this concept can result in an abandoned application or worse, a registration that crumples under a legal challenge.

The Lanham Act (the governing US law for federal trademarks) defines ‘Use in Commerce’ as “the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark” (15 USC § 1127).

To satisfy the requirements of the Lanham Act an applicant must show not just a “bona fide use of a mark”, but also that the product or service associated with that mark effects interstate commerce.  While this is generally a very low threshold to meet (examples of products that Courts have held effect “interstate commerce” include commodities sold entirely intrastate if they may affect the price of interstate trade or establishments that serve out-of-state clientele) it is something to be aware of.  More information on this issue is available here.

Proper Specimens for the USPTO:

Proper specimens (i.e. examples of ‘Use in Commerce’) are different depending on whether an applicant’s mark is for a service (e.g. cleaning services) or for goods (e.g. bowling balls).  For goods a mark is used in commerce when:

“It is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and

The goods are sold or transported in commerce.”

When filing a mark for some goods the Lanham Act and the USPTO recognize that it may be impractical to affix the mark directly to the product.  Many applicants choose to use an online ordering page as a “display”, which will suffice so long as the page describes or shows the product, includes the mark in association with the product, and gives a customer the opportunity to purchase the item on that page (e.g. the page has a “buy now” button).

A common mistake is for applicants to submit a “mock-up” or artist’s rendering of what their product looks like with the mark.  This is an unacceptable form of specimen (though a mock-up can be used on an order page).

For services a mark is used in commerce when:

“It is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.”

Specimens for services are generally pretty easy to produce as acceptable specimens include a brochures, fliers, images of a sign, or web advertisements.

Date of First Use:

This is a problem that trips up a lot of people and can cause a mark to be canceled if the applicant is not careful.  Generally, in the application process the USPTO will simply take an applicant on their word about the date of first use for their mark.  However, if the mark is contested in the USPTO Trademark Trial and Appeal Board (TTAB) or in federal court the person contesting can claim that the applicant’s use of the mark was after the date specified in the application.  A registration that claims first use earlier than actual first use will be considered “void ab initio”, and the registration will be canceled.

The USPTO and federal courts have not given definitive guidance on what actions constitute first use in commerce, but generally the use must be in connection with the sale or offering of the product or service specified in the application.  People run into problems when they put down the first date they started using the mark at all, and not the first date the mark was first used in connection with the goods or services on the application.  For example, suppose a start-up hotel company picked a name (“Alpha Hotels” let’s say) and took numerous steps to get their business operational in 2009.  They registered a business name, purchased a building, hired interior decorators and staff, and got loans from a bank all using their mark Alpha Hotels.  They open the doors to the public in 2010.  If they file the trademark Alpha Hotels for “hotel services” their date of first use will be in 2010.  Despite all their activity in 2009 involving the name Alpha Hotels, they didn’t actually offer hotel services (i.e. temporary accommodations for people) until 2010.

Other issues to consider:

Ornamentation is another problem that applicants run into regarding their specimen, particularly when they apply for a design mark.  The typical example is on items like t-shirts or coffee mugs.  If consumers will buy the product because they like the design then the USPTO may argue that the design is an ornamentation that consumers will not recognize as a brand.

Consumers need to view a mark as a brand or source indicator in order to get protection under trademark law.  The USPTO has often rejected specimens where the mark is buried in the body text of an advertisement or otherwise displayed in a way that would not suggest the word or design is functioning as a mark.  Including a “TM” after the word will not be dispositive in showing that consumers will perceive the word or design as a mark.

A specimen to the USPTO will never be proper if it does not include the mark as the mark is described in the application.  Failure to meet this requirement results in what is called “mutilation”.  This problem usually occurs when there are additional elements surrounding the mark such that consumers might believe the mark includes those additional elements and not be limited to just the portion described in the USPTO application.

Conclusion

While ‘Use in Commerce’ is only one of many considerations when filing a trademark, an error in this area can be quite costly for the applicant.  Some considerations, like the date of first use, the applicant only gets one shot at, so care should be taken.  Many applicants are individuals who choose to file their own mark.  The USPTO website has good information available for explaining the trademark process and the requirements for filing a trademark application.  The application form may seem straight forward, but there are complex legal rules at play that may result in pitfalls for the unwary.  Hiring a trademark attorney is an applicant’s best bet in ensuring that their trademark rights will be properly protected and should be a serious consideration for any businesses that expects to invest significant money into publicizing their mark.

The above information is not legal advice.  If you have a question regarding trademark law or other law please contact an attorney.

FCC issues new Net Neutrality rules

January 4, 2011 by · Comments Off
Filed under: Internet, law 

On December 21st the FCC approved new rules regarding Net Neutrality.  Net Neutrality is the concept that all websites will be treated the same by ISPs (e.g. Verizon or Comcast), and ISPs will not be able to block websites that may compete with additional services the ISP may offer.  For example, Comcast offers telephone services through their network, and so they would profit by banning (or charging an additional fee to) VOIP telephone services, such as Skype, from using Comcast’s transmission lines.  Comcast might also charge websites to receive a faster loading, creating “fast lane” for high budget sites and discouraging users from visiting start-up sites with a slower load time.  Net Neutrality would prevent Comcast from taking this action.

The rules set forth by the FCC sparked harsh criticism from people on both sides of the issue.  FCC commissioner Robert McDowell claimed these rules were overly vague and intrusive regulation by the federal government over the internet.  Senator Al Franken, a strong supporter of Net Neutrality, said he felt these regulations failed to provide the protections he was hoping for.  Many free speech and internet advocacy groups claimed the FCC proposal is Net Neutrality in name only, and fails to meet the principles of Net Neutrality.  The ISPs and wireless carriers themselves seem to be among the few organizations that are in support of the new plan.  The simple fact that the industry being regulated is in favor of the new regulations is cause for worry for many Net Neutrality advocates.

There are two areas of contention about the new rules.  The first is the FCC allowing ISPs to engage in “network management”, which will permit ISPs to slow internet connections and engage in “reasonable” activity to manage their network.  Network Neutrality worries that this exception will become a loophole allowing ISPs to completely escape Network Neutrality restrictions.  The other issue is with wireless carriers, which will be allowed to restrict the availability of applications on mobile phones, a violation of network neutrality principles.  The FCC claims that smart phones are an emerging technology and need to be granted more leeway until the technology has had time to establish itself.

One thing most of the interested parties in these regulations agree on is that these regulations will be the subject of law suits in the near future.  The FCC’s previous Net Neutrality regulations were held unenforceable in federal court when they were challenged by Comcast.  The FCC claims that they have established these rules with solid legal grounding based on the 1996 Telecommunications Act, but the sufficiency of these claims is sure to be tested soon.

The Battle over Network Neutrality May Finally Be Hitting Your Monthly Bill as Comcast and Netflix Provider Spar

December 2, 2010 by · Comments Off
Filed under: Uncategorized 

While many Internet denizens have been avidly following the ongoing controversy, the majority of Internet users don’t know about it, and frankly, don’t care.  It’s hard to get people riled up over an issue that may, someday, be a problem.  The only real sufferers of a disregard for Net Neutrality have been peer-2-peer file sharers in 2007, when Comcast began deliberately lowering their internet speeds.  Finally, however, the debate may have entered an arena that hits close to home.

Netflix traffic currently takes up around 20% of all internet traffic, making it a giant in the field and a service near and dear to many internet users’ hearts.  Comcast has recently forced Level 3 Communication, the major traffic supporter for Netflix, to pay an additional fee to the Internet Service Provider.  Comcast claims that this fee is not a violation of Net Neutrality, but rather is being charged as a result of increases in Internet traffic.  Level 3 Communications claims this type of fee is in violation of the Network Neutrality rules proposed by the FCC that are to be voted on later this December.

The central idea behind Network Neutrality is that ISPs may not restrict access to specific services, whether by slowing speeds or charging fees for access to specific sites.  There is a growing concern that ISPs will team up with large entertainment companies and restrict their customers’ access to only their business partners websites and internet services.  The proposed merger of Comcast and NBC that appears to be finalized soon is weighing heavy on the proponents of Net Neutrality.