Archive for the ‘Startup Businesses’ Category

Oct
28

NEW BUSINESS FORMATION TIP – AVOID THE MISTAKE OF CHOOSING A COMPANY NAME THAT HAS TRADEMARK ISSUES, DOMAIN NAME PROBLEMS, OR OTHER ISSUES

Picking a company name that meets the above criteria is often easier said than done.   The last thing a new company needs is a legal dispute involving the alleged infringement of someone else’s trademark.  Anybody who has been involved in a lawsuit understands that they are costly, stressful, and can take on a life of their own.  A registered trademark owner may of course give you the chance to comply with an initial cease and desist letter.  However, your compliance will generally require you to stop using the mark, transfer any domain name rights, etc.  The upshot?  You’ll have to start over in branding your business.

Here are some tips on getting your company off and running with a viable name.

  1. Do a Google search on the name to see what other companies may already using the same or a similar name.
  2. Do a search of your state’s corporate or limited liability company records in the states where the company will do business to see if anyone is using the same or similar name. Also check the state’s registered trademark records since some companies do obtain state-registered marks.  For Florida, this information can be found here.
  3. Do a search of the U.S. Patent & Trademark Office (USPTO) for federal trademark registrations of your proposed name. Do not think that merely changing a letter in your proposed name or reversing the order words in a multi-word work will save you from a legal dispute with the owner of the registered mark.  Additionally, if you plan to file a trademark registration application for your company name with the USPTO, you should select a name that has a solid chance of meeting the USPTO’s trademark registration requirements.  This means that your mark must not be confusedly similar to a registered mark.
  4. Do a search of domain name registrar websites such as GoDaddy.com to see if the domain name you want is available. Not only are domain names a necessity in today’s e-commerce world, but domain names also may have associated trademark rights.  Therefore, a minor change in the registered domain name, e.g., by registering the plural form (sABC) of the registered domain name (ABC) could result in a trademark dispute.
  5. The best company name is one that is distinctive and memorable for both branding purposes and obtaining valuable registered trademark rights.
  6. Come up with at least three names you like and get the reactions of trusted individuals.
  7. If you plan to have a logo designed, ensure that there is a contract in place assigning all of the creator’s intellectual property rights to your company.
  8. If you are a non-US company planning to expand into the United States, note that US trademark law will apply to you.
  9. Watch out for cultural implications involving your mark if you plan to register it in other countries.
  10. Consider having an intellectual property law attorney do a professional trademark search.

We are proud of the legal services we provide to our business and entrepreneurial clients on all matters related to trademark law.  Contact us at 305-279-4740 to discuss your questions on trademark law matters.   Doing things right the first time in selecting a company name and building your brand could save you some real headaches and a lot of money down the road.  

 

Troy & Schwartz, LLC

Attorneys-at-Law

Miami, Florida

Where Legal Meets Entrepreneurship

This blog is for informational purposes only and does not constitute legal advice.

 

 

 

 

Sep
27

DON’T LET A FAULTY SPECIMEN UNDERMINE THAT TRADEMARK APPLICATION!

 Posted by Susan Dierenfeldt-Troy, Esq.

Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

Have a question on specimens for your filed trademark application after reading this blog? We can help ensure the specimens you file will meet the USPTO’s requirements so that your registration will actually issue if the other requirements are met. Our trademark law legal services include: prosecuting trademark applications;  representing clients before the Trademark Trial and Appeal Board; and representing clients in trademark infringement lawsuits.

 Call us at 305-279-4740 (Miami, Florida) for a complimentary consultation.

So your proposed trademark has met the USPTO’s two threshold requirements for registration:  1) there is no likelihood of confusion with existing registered marks; and 2) the mark is not merely descriptive or generic.  Nevertheless, the examining attorney has refused registration because the applicant’s provided specimens, required for demonstrating usage of the mark in commerce, do not meet the USPTO’s requirements.   This commentator has previously blogged on this topic and is doing so again because there seems to be a lot of confusion over the importance of specimens to the trademark registration process.

Indeed, as a trademark attorney, I have found that specimens are often the most misunderstood requirement for obtaining a registered trademark.  That’s why our firm’s trademark legal services involve advising clients about specimen requirements from the get go.  At times, we have advised clients to modify their specimens before we submit them to the USPTO in a 1A application.  For intent-to-use applications where specimens are not filed with the application but will be required if the mark receives a Notice of Allowance (a preliminary approval of a pending specimen) we work with clients to ensure that they will have suitable specimens commensurate with USPTO requirements for “goods” marks and “services” marks when the Statement of Use is filed.  This may include reviewing the Client’s website and recommending layout changes so “specimen” screen shots will meet the USPTO’s specimen requirements.  Additionally, we ensure that all submitted specimens clearly identify the applicant as the provider of the goods/services, another essential specimen requirement.

The specimen requirement is no joke.  Between Sept. 17 and Sept. 23, 2020, the Trademark Trial and Appeal Board (“Board”) affirmed the decisions by three USPTO examining attorneys who had all refused registration on unacceptable specimen grounds for three different trademarks.  All three applicants ended up spending a lot on legal fees only to be denied registration of their marks upon appeal.  The following summarizes the three decisions and the commentator’s practice tips.

The case: In re Iguana Yachts.    Here the mark was a “goods” mark with following description: “Boats; amphibious vehicles; professional boats, and professional amphibious vehicles in the fields of security, military rescue, and transport of goods and people.”  The submitted specimens comprised a banner, a business card, and a website extract with a “custom build quote form.”   The Board concluded that there was no evidence that the banner or business card were displayed or distributed at tradeshow, i.e. the specimens were not actually used in interstate commerce as point-of-sale displays.  Likewise, there was no evidence as to how the quote form was used to actually place orders on the website for the specified goods.  In essence, the provided specimen were mere advertisements.  Advertisements may be suitable for service marks but are never suitable for goods marks.

Practice Tip.   Ensure that a specimen submitted for a good(s) is not mere advertising.  If the specimen represents a point-of-sale display, a customer must have either the ability to buy the good right there or to be able to place an order for the good associated with the mark.  That is, the specimen must show how the mark is being used in interstate commerce by the applicant.  The mark must also be displayed prominently to ensure that a potential customer identifies the mark with the good.   Here, perhaps the website could have been easily amended to provide for a website-related point of sale display before the specimen was ever submitted to the USPTO.   All specimens must also specify the applicant as the provider of the goods/services.  This requirement is in keeping the trademark law’s focus on the consumer – the consumer has the right to know who is providing the good/service under the mark.

The case:  In re Charlie’s EnterprisesEnergy, LLC.     Here the slogan mark was for food goods:  “Peas, fresh; Vegetables, fresh.”  The specimen consisted of “[a] picture of the proposed slogan in use on a semi-trailer wrap.”  Additionally, the mark presented in the application did not match the display on the truck.   The applicant argued that the wrap was a form of packaging.   Indeed, packaging can serve as a goods specimen as long as it shows the mark AND the source of the goods, generally the manufacturer or distributor.  Here the Board held that a trailer wrap is not a common packaging for vegetables even though a trailer wrap may be a common way of displaying the mark associated with bulk goods (such as lumber).

Practice Tip.  Ensure that the submitted specimen is the type commonly used for the particular good.  Additionally, ensure that the specimen’s mark and the mark shown in the application are equivalent.  All specimens must also show the source of the goods as the following decision again demonstrates.   Perhaps this registration could have been saved if the trailer wrap had at least showed the applied-for mark in its entirety.  However, if the goods being transported were sealed in packages for sale at, e.g., a grocery store, a photo showing the packaging with the required info would likely have been accepted.

The case: In re Systemax, Inc.    This case involved the situation where the specimens submitted for a service mark application failed to show an association between the mark and the application’s recited services. The specified services were for “holding company service, namely, providing business management, business administration, and human resource management services to subsidiaries and affiliates.”  The applicant submitted copies of annual reports and website screen shots which failed to show an association between the mark and the recited holding company services.   As such, the Board agreed with the examining attorney and the mark was not registered.  This commentator notes that any website screen shot being submitted as a service mark specimen should clearly show the mark on each and every page where a description of the service is presented.  Additionally, the applicant, as the service provider, should be readily discernable.  Annual reports, invoices, business plans, and the like are not specimens for trademark registration services.

Practice Tip.  This case is a perfect example of how any thorough trademark attorney will first carefully review the applicant’s website before submitting any screenshots as specimens.  If deficiencies are found, the attorney should advise the client to amend the layout of the website and/or the content before screen shots are submitted as specimens.

 

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

May you and your loved ones stay safe & be well during these challenging times.


© 2020 by Troy & Schwartz, LLC

 

 

 

 

 

 

 

 

 

 

Jul
11

PROTECT THAT DOMAIN NAME!

Domain names can be extremely valuable business assets in today’s Internet-connected business world.   During the last two months, we have been contacted by two small businesses which have both encountered the unpleasant surprise of learning that they no longer have control of their domain names.  This blog discusses the steps that every business owner should proactively take to ensure their business is indeed in “charge” of their domain name(s) throughout the company’s existence, until the business no longer wishes to have an Internet presence under the registered domain name, or until the domain name is sold as an asset, e.g., in a business asset sale and transferred to the new owner pursuant to the Registrar’s domain transfer process.

A.    Domain Name Registration by Employees

An employee (“the Registrant”) registered the domain name for her company’s new website through www.godaddy.com (the “Registrar”) in her own name.  Her personal information and not the company’s is listed on the account’s contact details, payment details, and domain name registration details.  Under this scenario, there is no proof that her company has any right to it (aside from the domain itself as a potential trademark).  As the Registrant, she has administrative control over the company’s domain name.  Consider the following scenarios:

  1. Her employment is later terminated during a round of layoffs. Feeling her severance package is unfair, she disables the domain name in hopes that the company will pay her for the rights to its domain name.   The company sues the employee for conversion and trademark infringement; or
  2. She becomes ill and needs to take an extended leave-of-absence.  During her absence, she misses annually-sent e-mail notification from the Registrar reminding her that the domain name must renewed.  The domain name is not renewed and becomes available for purchase.    The company’s website and associated email addresses are subsequently disabled.

B.  Won’t the Registrar Just Grant Access to the Domain Name or Give the Company a Chance to Renew the Registration of an Expired Domain Name?

Much easier said than done.  Registrars generally require considerable proof before they will allow anyone but the original Registrant to access the domain.  They are not in the process of sorting out domain name disputes and will generally recommend that the parties seek legal advice, work it out among themselves, or use the Uniform Domain Resolution Process (UDRP), an alternative dispute resolution process which every Registrant must agree to as part of the domain registration process.  Scenario B is not a dispute per se but unfortunately can have serious legal complications unless the company is quickly able to secure the domain name rights by repurchasing the name.

C.  What Should a Company Do to Prevent Either of the Above Scenarios from Occurring?

  1. Provide clear instructions in the writing to the employee that the organization’s name and contact information are to be listed on the account as the Registrant and not just her name personally.
  2. Maintain a copy of the domain name registration confirmation from the Registrar with the company’s business records.
  3. Ensure that the email address to access the company’s account is accessible by more than one person at the company rather than one specific person. A departmental or generic, non-person-specific e-mail address is preferable, e.g., admin@yourcompany.com or info@yourcompany.com rather than janedoe@yourcompany.com.

D.  Website Developer Registration of the Domain Name

Website developers will often register the domain names for the websites they are developing.  Here, it is important to ensure that the website developer uses your company’s contact information as the account contact information.  Remember that the “contact” details help establish true ownership.  The website developer may be listed as the technical contact for the domain name, but that’s as far as it should go to ensure that your company will have primary account access and thereby be able to have a proof of ownership if it ever becomes an issue.

E.   A Final Suggestion

If the Registrar allows the inclusion of multiple e-mail addresses for account login. contact/notification and domain name registration contact, consider including an address not associated with the domain name.  Should your domain go down, e g., if the domain name expires, not only will the website no longer be accessible but no emails associated with that domain name will be received.  A backup e-mail using another domain or free account like G mail may still allow correspondence with clients until other steps can be taken to protect to address the issue.

If you have any questions about protecting your domain name or believe your situation may merit a UDRP proceeding, contact us at 305-279-4740 or complete the “Do I have a case” option at the website.

WE THANK YOU READING THIS BLOG AND HOPE YOU FOUND IT INFORMATIVE.  HOWEVER, THE CONTENT IS PROVIDED FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.  IF YOU ARE CONTEMPLATING ANY ACTION THAT MAY HAVE LEGAL CONSEQUENCES, CONSULT WITH AN ATTORNEY.

 

©2020

Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

(305) 279-4740

 

 

Mar
13

Patent Licensing Agreements: Ensuring They Won’t Thwart the Patentee’s Rights to Damages in a Later Patent Infringement Lawsuit

Attorneys often categorize themselves as either only transactional or only litigation attorneys. The fact is that legal documents, whether drafted by a transactional attorney specifically retained to draft an agreement or “grabbed off” the Internet, may become the subject matter” of a lawsuit, either directly as in a breach of contract claim or indirectly as where an agreement fails to properly address statutory requirements pertinent to the contact.   The latter situation is discussed in the Federal Circuit Court of Appeal’s Feb. 19, 2020 decision in Arctic Cat, Inc., v. Bombardier Recreational Products, Inc.

Arctic Cat is the owner of two patents directed towards thrust steering systems for personal watercraft (“PWCs”). Although it initially sold the inventions before the patents had issued, Arctic Cat later entered into a license agreement with Honda for several patents including the PWC patents.  Somewhere along the licensing negotiating process, the provision requiring Honda, as the licensee, to mark all licensed patented products with the applicable patent numbers was deleted.  The final version even expressly stated that Honda had no marking obligations.  This provision was contrary to the requirements of 35 U.S.C. § 287 and case law involving the interpretation of that statute.

Section 287(a) provides in pertinent part:

Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into United States, may give notice to the public that the same is patented . . . by fixing thereon the word “patent” . . . . In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.

The notice provision of § 287 does not apply to patents directed to processes or methods. Nor does it apply if a patentee never makes or sells a patented article; such a patentee may recover damages even absent notice to an alleged infringer.  On the other hand, the patentee who either directly sells the patented article or indirectly introduces into the market through a licensee, cannot collect damages until it either begins providing notice or sues the alleged infringer.  Any resultant damages are limited to the period after notification.  A patentee can cure the marking dilemma by beginning to mark (or have the licensee mark) its products in accordance with § 287.

The public policy behind § 287 is threefold: to (1) help avoid innocent infringement; (2) encourage patentees to give public notice that the article is patented; and (3) aid the public to identify whether an article is patented.   Arctic Cat at 8 citing Nike, Inc. v. Wal-Mart Stores, Inc., 138 F.3d 1437, 1443 (Fed. Cir. 1998).   Failure of a patentee to inform the public that an article is patented is deemed problematic because of its potential to mislead others into believing they are free to make and sell an article that is actually patented and then finding themselves on the receiving end of a patent infringement lawsuit.

The statute also actually provides incentive to the patentee to sell marked products so as to maximize its damages in any subsequent patent infringement lawsuit by a “knowing” infringer. That is, the marking statute imposes notice obligations on the patentee.  Whether or not the alleged infringer may have had mere knowledge that unmarked patented articles were actually patented is irrelevant.  A patentee who does not comply with the marking statue cannot later claim entitlement to “willful infringement” damages without establishing that the alleged infringement had been put on proper notice.

The duty to mark is not limited to the patentee but is also imposed on any licensee or assignee. Arctic Cat at 6.   The licensing/assigning patentee has to demonstrate that it made reasonable efforts to ensure any third parties’ compliance with § 287 to the satisfaction of the court.  Inexplicably, the licensing agreement between Arctic Cat and Honda expressly stated that Honda had no obligation to mark the patented PWCs.   As such, in its later filed infringement lawsuit, Arctic Cat was in no position to argue that it had made reasonable efforts to ensure labeling.  The “wrong” provision included within the patent licensing agreement with Honda executed years before proved fatal from a damages maximization perspective.

And this begs the question:  Who drafted that licensing agreement and why was the original provision referencing marking deleted?  Did Arctic Cat’s authorized representative understand the implications of what he was signing?  Did its transactional attorney explain the consequences?

From our perspective, the Arctic Cat decision drives home the point that a faulty transactional agreement may well mess up a party’s rights in a future lawsuit.  Faulty agreements can range from unartful, overly verbose, and ambiguous wording to provisions that are inexplicably contrary to federal and/or state statutory requirements and public policy.  The latter should never happen at least when a transactional attorney is involved.  Any such attorney must have a thorough understanding of the legal area the agreement involves to determine how much latitude may be incorporated into the agreement without running afoul of governing law.  Failure to do so denotes sloppy work.

The commentator handles both legal disputes involving intellectual property rights including patents and drafts and negotiates complex licensing and assignment agreements.  In my opinion the preferred approach to drafting these and other types of agreements is to draft with an eye toward future litigation whether between the parties to the agreement or a third party as in the Arctic Cat case.  Such agreements should also be drafted by an attorney with experience in the subject matter.

Considering licensing your intellectual property? Contact us to see how we can provide value to you or your company from drafting the licensing agreement from scratch through negotiating the draft (or a previously existing draft) with the other party to the agreement.  Our services including taking care to explain the agreement in detail to our clients and providing a summary of the agreement’s provision to provide for ready reference.  

WE HOPE YOU FIND THE ARTICLE INSTRUCTIVE.  HOWEVER, THE INFORMATION PRESENTED IS NOT LEGAL ADVICE AND IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY.

© Troy & Schwartz, LLC 2020

Where Legal Meets Entrepreneurship™

 

 

 

Jul
21

A REGISTERED TRADEMARK APPLICANT MUST BE THE OWNER OF THE MARK UNDER SECTION 5 OF THE LANHAM ACT.

On July 2, 2019, the Trademark Trial and Appeal Board (“TTAB”) sustained the opposition to the mark HOLLYWOOD HOTEL by finding that the mark was void ab initio because the Applicant was not the owner of the mark.   Hollywood Casino, LLC v. Chateau Celeste, Inc., Opposition No. 91203686.

An application is void if it is filed by a person or entity that is not the owner of the mark.  By definition, the owner of the mark is the one that controls the nature and quality of the goods and services under the mark.  This requirement is consistent with trademark law’s focus on preventing consumer confusion over who is providing the goods/services under the mark.

Here, the opposer had the burden to prove that the Applicant was not the owner at the time of filing of the opposed application.  HOLLYWOOD HOTEL was owned as a common law mark starting in 1994 by Zarco Hotels.   Applicant Chateau Celeste, Inc. filed the application for the HOLLYWOOD HOTEL mark in 2011.  The application was subsequently opposed by Hollywood Casino, LLC on likelihood of confusion grounds.  During the course of discovery, the opposer ascertained from the testimony of the Applicant’s president that Chateau Celeste was not the actual owner of the HOLLYWOOD HOTEL mark under the law.  The TTAB granted the opposer the right to amend the complaint to include a count that the mark was not registerable because the Applicant was not the true owner of the mark.

The opinion is instructive because it emphasizes the importance of ensuring that the applicant and the mark owner are one and the same.  First, as the Hollywood Casino decision establishes, an application filed by a non-owner is void from the start.  Second, even if the application somehow makes it through the registration process without an opposition proceeding, ownership issues may arise in any future trademark infringement litigation proceedings; it is the owner of the mark who generally has standing to bring such lawsuits.  Third, ownership issues may also arise in a later cancellation proceeding brought by another party before the TTAB.

The ownership in a mark, whether registered or common law, may pass to another through a formal assignment of rights.  The USPTO encourages recordation of “registered mark” assignments to establish a public chain of title.  Trademark assignments often arise when a business is purchased where registered or common law or state trademark rights are acquired as part of an asset purchase or stock purchase. Additionally, ownership may pass without a formal assignment if one company becomes the owner of mark by controlling its use by a related company, e.g., by a subsidiary.

Importantly, licensees are not the owners of trademarks.  Indeed, any licensor of trademarks has the obligation to ensure that the licensee is maintaining the nature and the quality of the goods and services associated with the licensed mark.

At the time the HOLLYWOOD HOTEL mark was filed, there were two separate companies in existence where one individual was an officer and controlling shareholder in both and both of the companies had the same address.  This is the same individual whose deposition resulted in the opposer’s amended complaint.   The TTAB deemed this commonality as being insufficient to make the companies related for ownership purposes under Section 5 of the Lanham Act.  The Applicant, Chateau Celeste, Inc., would have to establish that it, not the individual officer/shareholder, controlled the nature and quality of the services rendered by Zarco Hotels, the corporation actually using the mark.  Because Zarco Hotels and Chateau Celeste constituted separate legal entities and Zarco Hotels was the owner of the physical property itself, the TTAB concluded the application was filed by the wrong legal entity and hence void.

Take Home Points

  1. It is important to ensure that applicant in any trademark application is the owner of the mark – i.e., the one who is using or will be using the proposed mark in commerce.
  2. Assignments of marks should be memorialized in a formal writing. Assignments involving registered marks should be recorded with the USPTO.
  3. Assignment during the prosecution of a trademark application may be allowed but only under certain circumstances.
  4. Acquiring licensing rights in a trademark is not equal to ownership of the licensed mark.   A licensor has an on-going obligation to monitor the licensee’s usage of the mark.

 

THANK YOU FOR READING THIS BLOG.  PLEASE SHARE IT WITH ANYONE WHO MIGHT BENEFIT. AS ALWAYS, THE CONTENT IS NOT LEGAL ADVICE AND IS PRESENTED FOR INFORMATIONAL PURPOSES ONLY.

 

© Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

 

 

 

 

 

 

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