How Do I Select a Name for My New Business
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Entrepreneurs and Innovators share at least one thing in common: the challenge of selecting a name for a new venture.  In a digital world where seemingly every catchy word or phrased seems to be used by someone else, choosing an original, creative, valuable name for a new venture isn’t easy.

When clients consult us regarding a name for a new business, brand, or idea, we always encourage them to shortlist 5 names.  Stay engaged in the name selection process until you have at least 5 names that you like to choose from.  Why 5?  Because if you select less than that, the odds of obtaining trademark clearance from your IP lawyer become greater; going back to the drawing board is inefficient and sometimes kills a founder’s morale.  By selecting 5 or more names to throw in the hopper, we can be relatively certain that at least one will check out from a legal perspective.

During the name selection and clearance process, it is common (and understandable) for a client to become emotional about the name selected.  If it’s a new business, however, my advice is usually not to proceed with a name that has any potential problems associated with it.  For example, often times there may be similar names in different but potentially related fields.  While our firm routinely argues for and against findings of likelihood of confusion on a daily basis (and are capable of doing so in most cases), it is never advisable to select a name which has an even 20% chance of infringing on another mark.  Or, even if there’s only a 5% chance of infringing, but the third party is highly litigious, it is likely not advisable to proceed with the name. Why?  Because no new company needs the headache of a trademark infringement litigation, even if the new company’s mark is ultimately found to be non-infringing.  There are better way to spend venture dollars than on costly and time-consuming litigation.

Think of it this way: no matter how incredible, meaningful, and poignant your new name may be, a name for a new company is nearly worthless in the eyes of a consumer, because a consumer is not yet familiar with the brand.  Of course, if you’re a mid-stage company who runs into a hiccup with your trademark, it might be worth it to pursue litigation in an effort to preserve the value built up over time in your mark.  But, if your mark hasn’t been introduced to consumers yet, and there’s a possibility that a third party might have an issue with your use, in most cases it makes sense to select a new mark, or, if you’ve followed my recommendation, pick one of the other 4.

I Received a Cease and Desist Letter but I Have a Registered Trademark
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Entrepreneurs and other early stage companies sometimes approach us after having received a cease and desist letter from a company claiming that their trademark rights have been infringed upon.  On occasion, these clients are particularly surprised to receive such a letter because they have a registered trademark.

Don’t be deceived: registered trademark holders can commit trademark infringement just like anyone else.  Under United States trademark law, a registered trademark holder has nationwide protection over its mark (and all marks confusingly similar to its mark), but these registrants don’t have priority over registered or unregistered marks that have prior use.  That’s right, an unregistered senior user can send a registered user a cease and desist letter.  What’s more, this same unregistered user can sue a registered junior user for trademark infringement in federal court.

Consider the following example.  JAYLAW is a law firm without a trademark registration.  It began using its mark in commerce in New York in 2005.  In 2010 it expanded to California.  It has two offices, in New York and California, and primarily serves clients in the areas of copyright and trademark law.  It has a significant reputation nationally among those requiring IP services. In 2016, J-LAW, a well-funded venture backed AI startup, launched its own operations.  J-LAW is a software platform that uses artificial intelligence to render advice to its users regarding copyright and trademark law.  J-LAW applied for and obtained a trademark for the term J-LAW.  Under these facts, assuming there’s a likelihood of confusion between the marks, JAYLAW would be able to stop J-LAW from using that mark in the geographic regions in which JAYLAW practices — most likely, NY and CA.

This result is not necessarily intuitive.  Many entrepreneurs mistakenly believe that a registered mark protects them against anyone, both defensively and otherwise.  That is simply not the case.  The above example isn’t an unlikely occurrence.  Therefore, all entrepreneurs should make sure that their trademark lawyer is conducting competent clearance searches in advance of filing a registration with the USPTO, and, frankly, in advance of using a mark in commerce in the United States.  A failure to properly search a mark could result in substantial economic and non-economic hardship for any growing brand.

What Is a Use in Commerce?
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When a trademark dispute arises among or between two marks, any experienced practitioner will immediately determine which mark is the senior user.  In the United States, a senior user with a registration will prevail against a junior user, provided the marks are confusingly similar.  A senior user without a registration will typically be limited to senior rights in the geographic areas in which the mark has been used in commerce.  That unregistered senior user will then become junior to any confusingly similar registered mark in geographic regions where the unregistered mark has not been used in commerce prior to the registration date.

This all begs the obvious question, “what’s a use anyways?”  Under United States trademark law, a use must be a “use in commerce.”  The cases have generally held that internal use is not a use in commerce.  At the same time, a sale of a service or product is not necessary to establish a use in commerce.   De minimus sales of a product for minor purposes only (shipping a box of goods to a friend, for example) — or free giveaways at a small event — might not constitute a use in commerce, but advertising your good or service at a trade show probably constitutes a “use in commerce.”

In today’s world, a developed website advertising the goods or services will most likely be treated as sufficient evidence of use in commerce, provided that the good or service is available for purchase or performance.  In other words, displaying your trademark on a webpage that says UNDER CONSTRUCTION probably does not constitute a use in commerce, but displaying that same mark with a message that says ORDER NOW, PRODUCTS SHIP NEXT WEEK is probably a use in commerce.

As with everything in the law, whether or not something constitutes a use in commerce depends on the facts or circumstances of each case.  Before you send a cease and desist letter to a competitor, be sure you’ve talked with an experienced trademark lawyer who can help you determine whether or not you are the senior user.  Often times, a careless trademark holder will send a cease and desist letter without ensuring that they are the prior or senior user.  Under these circumstances, the competitor might reply with its own cease and desist letter, or worse, a lawsuit for trademark infringement.

At JAYARAM Law, we advise and counsel entrepreneurs, innovators, and companies on a wide variety of trademark issues.  Contact vivek@jayaramlaw.com with any questions regarding trademark law.

India Revises Trademark Rules
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India’s new Trade Mark Rules 2017 are effective March 6, 2017. These Rules, which replace the Trade Mark Rules 2002, will streamline and simplify the processing of Trade Mark applications in India.  Some pertinent features of the Rules are as follows:

  • Number of Trademark Forms have been reduced from 74 to 8.
  • To promote e-filing of TM applications, the fee for online filing has been kept at 10% lower than that for physical filing.
  • Based on stake holders’ feedback, the fees for Individuals, Start-ups and Small Enterprises have been reduced from that proposed in the draft Rules – i.e. only Rs 4,500 as against Rs 8,000 for e-filing of TM applications proposed at the draft stage.
  • Hearings through video conferencing has been introduced.
  • Number of adjournments in opposition proceedings has been restricted to a maximum of two by each party, which will help dispose of matters more efficiently.
  • The examination time for a TM application has already been reduced from 13 months to just 1 month in January 2017; this is despite a 35% jump in TM filings in 2015-16 vis a vis the previous year.

The new Rules should give a boost to the Intellectual Property Regime in India.  As a Member of the Madrid Protocol as of July 2013, filing trademarks in India has never been easier.

Contact Vivek at JAYARAM LAW (vivek@jayaramlaw.com) if you are interested in protecting your brand in India, the United States, or elsewhere around the world. We advise and counsel clients on critical trademark matters, and enforce those valuable marks against infringers around the world.

Jayaram Law Obtains Dismissal of Federal Case On Behalf of Client “Sugar” Shane Mosley
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Hitz Entertainment Corporation filed a lawsuit in the Northern District of Illinois against former world lightweight and welterweight champion boxer Shane Mosley, as well as his promotion company, GoBox Promotions, Inc., for tortious interference with a contract and tortious interference with prospective economic relations arising out of a boxing event promoted by Mosley and GoBox in Inglewood, California on August 29, 2015.  Mosley and GoBox filed a motion to dismiss for lack of personal jurisdiction.  Following nearly a year of extensive briefing and jurisdictional discovery, the Court today issued an order and opinion granting Mosley and Gobox’s motion, and dismissed the case for lack of jurisdiction.

HEC’s argument that GoBox is subject to general personal jurisdiction in Illinois boils down to essentially one point: that GoBox produced the Bout and then contracted with several third parties to market and distribute the Bout nationwide, including in Illinois, and that in doing so it submitted itself to the jurisdiction of Illinois (and presumably every other jurisdiction where the fight was shown).  GoBox had distribution agreements with several companies, each of which distributed the Bout, for a fee, to customers in Illinois. HEC alleges that as part of one of these distribution agreements, the distributor sent “blast” emails to people nationwide, some of whom were in Illinois, and aired commercials for the Bout nationwide, including in Illinois. These distribution agreements differed from typical boxing match distribution agreements in that GoBox maintained ownership of the copyright of the telecast, whereas in a typical arrangement the telecast of a boxing match is produced by a distributor or other third party, who pays the promoter a fixed licensing fee but the distributor owns the copyright for the telecast.

The Court concluded that these contacts with Illinois are not sufficient to support general personal jurisdiction over Mosley or GoBox.   The Court reminded that general personal jurisdiction is found where a party has engaged in systemic and continuous activity in the forum state such that it approximates physical presence. The Court held that the fact that GoBox contracted with a number of distributors who distributed and marketed the bout in Illinois does not establish continuous nor systemic activity in the state. Rather, the Court found that these facts demonstrate discrete and limited contact with Illinois.

Mosley and GoBox were represented by Vivek Jayaram, Johanna Hyman, Abe Wehbi, and Doni Robinson.

JAYARAM LAW GROUP, LTD. is a law firm representing innovators in intellectual property matters, corporate law, and commercial disputes.

The Importance of Running a Trademark Search
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Before you use or attempt to register a trademark, it’s critical that you conduct a trademark search.   Why?  Well, there’s really two primary reasons (and a host of ancillary ones):

First, you want to ensure that you’re not infringing upon the rights of any third parties.  If you fail to conduct a search, use an infringing mark, and then get sued for it, a Court or jury might find that you’ve been careless in the use of your mark, and you might get hit with a substantial award for damages.  This is an expensive — and often times fatal — proposition for a young company or startup venture.

Second, even if that doesn’t happen, you will likely have to change your mark midstream if it’s found to be infringing on another mark.  This means that all the  time, effort, and resources spent promoting your infringing mark in the time that preceded the infringement action has been wasted.  Some companies confronted with this unfortunate predicament are never able to recover, as the goodwill they’ve worked so hard to build is lost forever since they will be forced to start anew with a non-infringing mark.

Finally, you’ll probably want an attorney to run a search for you even if you’re already using a mark.  Aside from the reasons above (which apply to anyone using or contemplating use of a mark), you should run a search to see if anyone’s infringing on your mark.  If you fail to run searches on a regular basis, you may be waiving your right to enforce your mark against potential infringers.

For many companies, their brand is their most valuable asset.  Failing to follow relatively inexpensive best practices could result in the unnecessary loss of a substantial corporate or personal asset.

Jayaram Law Group, LTD. advises and counsels companies from around the world on trademark matters.  Contact us to discuss your marks.  

Trade Dress Enforcement
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An issue in trade dress enforcement is the ability to protect a product that could be viewed as unable to be legally protected. In a case before the United States International Trade Commission: In the Matter of: Certain Footwear Products (2015), Administrative Law Judge Charles Bullock ruled for the shoe manufacturer Converse when they sued Wal-Mart, Sketchers and other companies for selling non-genuine versions of the Chuck Taylor shoes. The commission, in Judge Bullock’s ruling noted the shoe was well-known and that the unnamed shoe which resembled it infringed on three trademarks registered to Converse – its front rubber bumper, rubber toe cap and stripes.

The main dispute in this ruling centered on whether Converse could protect these shoes by having a trademark if others had been selling this same shoe with a similar design for a significant amount of time. This ruling, however was only initial and did not contain a full explanation, and currently needs full ITC approval. The holding supports Converse’s assertion that design features of common products sold by others but developed by the trademark holder can be protected.

It is important to also note that Converse is still involved in litigation with other companies on this issue and depending on how their litigation in the District Court is resolved could have a significant impact on the case. Converse has successfully settled with many of their adversaries on this issue such as Ralph Lauren, H&M and Fila. However, they are still involved in pending litigation with New Balance, the manufacturer of the PF Flyer Sneaker-which looks similar to Converse’s Chuck Taylor shoes, as well as Wal-Mart and Sketchers. This case may have a significant impact on the level of protection for shoe and clothing design, depending on the outcomes of the litigation.

This case teaches practitioners that design features of a well-known product which is widely manufactured by other producers can be protected under US trademark law, even though other corporations had been selling that product for some time.

Trademark Law and Initial Interest Confusion
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An important concept in trademark law is initial interest confusion. Initial interest confusion occurs when one wrongly thinks a company filters a shopper toward a product that they were not originally searching for, when they searched for a different, registered product. In the case of Multi-Time Machine Inc. v. Amazon.com and Amazon Services LLC, (2015) The 9th Circuit Court of Appeals reversed its prior ruling and held that Amazon was not liable for infringement based on this mismatch.

In this case, a watch company, Multi-Time-Machine manufactured the high-end MTM Special Ops watch. When consumers searched for MTM Special Ops Watch on Amazon they were directed not to the MTM watch, but rather to other similar products including their competitors’ watches. MTM sued Amazon for trademark infringement, under the theory of initial interest confusion, because when consumers searched for the MTM watches, the results included other companies’ products. MTM was concerned these consumers would think the competitor’s watch was an MTM watch and purchase from a competitor because of the search results. MTM argued that Amazon was infringing on their trademark through their search functionality because the consumer is not directly told that MTM’s watch and the non-MTM watch are not interrelated and thus, sales that may have gone to MTM went to their competitors.

In a 2-1 appellate court ruling in a rehearing, the 9th Circuit ruled in favor of Amazon stating that search results that display a competitor’s product when searching for a specific product does not rise to the level of “likelihood of confusion” to constitute trademark infringement. This ruling is based in part on the “relevant reasonable consumer” of a high end product being familiar with online shopping and therefore would be expected to take basic steps to determine what product they wished to purchase based on Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171 (9th Cir. 2010). Also, the court ruled based on the clear labeling of the watches since the product’s brand names were clearly labeled the consumer was not misled by Amazon’s search results.

This case teaches practitioners that when a search engine is used to sell a high-end product that the owner of the search engine is not liable for trademark infringement under the doctrine of likelihood of confusion. Since courts have held the consumers of high-end products have basic familiarity with online purchasing and because the products are clearly labeled, the search engine did not mislead consumers. Thus, practitioners should note that search engines, if operating in good faith while selling high-end products are unlikely to be liable for trademark infringement based on this doctrine.

 

Tiffany v. Costco Wholesale Corp.
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An important concept in trademark law is whether a brand whose style is very well known can be considered generic and thus not subject to trademark protection. This question was presented to the US District Court for the Southern District of New York in Tiffany v. Costco Wholesale Corp. (2015)

 

In this case, Tiffany sued Costco because Costco used the terms Tiffany and “Tiffany Setting” to describe rings they offered for sale. Costco argued that the terms were generic and used within the parameters of fair use. Tiffany was not successful in their motion for summary judgment as the court held that there was a factual dispute over how the terms “Tiffany” and “Tiffany Setting” were viewed by the public. To address this, Tiffany used a survey showing that 4 out of 10 people believed that in displays similar to Costco, Tiffany was used as a brand name and 3 out of 10 others surveyed, thought it was used as a descriptive and a brand name. Costco argued that Tiffany’s survey methodology was flawed and used linguistic experts to show that the term Tiffany was the only English word to describe the type of ring setting used. Their experts further stated that the term Tiffany was used in a generic way for some time. The District Court however disagreed and held that Costco’s advertising the rings as Tiffany rings did satisfy the likelihood of confusion test and was also in bad faith. The District Court also held that Tiffany was not a generic term and that the fair use doctrine was not valid here. Since Costco did not have any evidence of whether the mark Tiffany was brand based or generic, the court held that it referred to a specific brand and ruled in favor of Tiffany.

 

This ruling teaches practitioners of the importance of using surveys to show how a mark is viewed by members of the public, and although expensive can provide an excellent resource for showing that a mark is brand specific. Also, this case teaches practitioners that a brand name that is well known by a definitive style to the public is a protectable term and is not generic.

 

An Important Issue in Trademark Law
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An important issue in trademark law is whether one has standing under the Lanham Act to file for cancellation of a mark that was neither used nor registered in the United States. In Belmora LLC v. Bayer Consumer Care AG, (2015) Judge Lee of the Eastern District of Virginia overruled the Trademark Trial and Appeal Board (TTAB) and held that Belmora did not have standing to file the action.

 

Beyer sold “Flanax”, an analgesic, in Mexico and has registered the mark there, but never registered or sold “Flanax” in the US. Belmora sold an analgesic tablet, Flanax in the United States and successfully registered Flanax in 2005. Later on, Beyer asked the TTAB to cancel Belmora’s mark, since Beyer alleged that Belmora was using its Flanax mark to misrepresent its source, violating the Lanham Act. During this litigation, Belmora objected to Beyer’s standing and the TTAB ruled in Beyer’s favor using the Federal Circuit’s liberal threshold since Beyer had an interest in protecting its mark and they would be harmed if Belmora used the Flanax mark to misrepresent its source. Since the TTAB ruled that Belmora was misusing the mark, the TTAB granted Beyer’s request to cancel the mark.

 

When Belmora appealed the TTAB’s ruling to the US District Court for the Eastern District of Virginia, the court examined the case of Lexmark International v. Static Control Components, Inc.(2014) to determine whether a foreign mark that is not used or registered in the US should be granted priority over a domestic mark. The court held that since Beyer did not own an interest in Flanax in the US that could be protected, it would not be Congress’s intention to protect their Flanax mark. The court further held that even if Beyer had an interest in protecting Flanax in the US, they did not definitively show that Belmora’s alleged improper conduct were the cause of Beyer’s economic or reputational damage. The District Court thus reversed the TTAB and ruled in Belmora’s favor reinstating their Flanax mark.

 

This case teaches practitioners that when two companies are using the same mark, for differing yet similar products, but one mark is registered and used in the United States and the other is registered and used elsewhere that the US mark will be given priority.