William S. Ramsey, P.C.

Trademarks

Trademarks are words or symbols used to identify the origin of a product or a service. Trademarks come in two overlapping versions, Common Law trademarks and Federally Registered trademarks.

Common Law Trademarks

The common law provides that a trademark belongs to the person who was first to use it for a product or service in the market area. This rule is incorporated in statutes in each of the states. Therefore a common law trademark is enforced by the individual state laws.

Maryland Trademark Registration. Common law trademarks in Maryland and all other states may be registered with a state agency. Registration provides no rights beyond the common law rights, but there are some advantages in having a state registration. It provides notice that you regard the mark as yours, and provides evidence of the date of usage of the mark in Maryland. State trademark registration is appropriate for businesses which are entirely local, for example, a chamber of commerce, but in today’s business climate many businesses involve more than one state and should consider a federally registered trademark.

Federal Trademark Registration.

The federal trademark statutes are based on common law principals but a federal trademark registration has many additional restrictions. Federal registration involves application is more costly than state trademark registration or simply common law, which requires no costs. On the other hand, federal registration provides substantial advantages in countering trademark infringement. Only trademarks with issued federal registration may use the symbol ®.

Domain Name Disputes. This is an emerging subclass of trademark issues. A variety of remedies are designed to counter cybersquatters who register domain names involving trademarks belonging to others. This process often is relatively quick and inexpensive.



Articles Concerning Trademarks follow .

William S. Ramsey, P.C.

Strong or Weak Trademarks
Naming Your High Technology Company
Internet and the Courts
Maryland Trademark Registration - Why You Need It
Trademark Dilution
Top Level Domain Names
Resolution of Domain Name Disputes

STRONG OR WEAK TRADEMARKS – YOUR CHOICE
"A good name is better than riches." Cervantes, 1615

One good thing about trademark law is that a mark which is good for business is also broadly protected by the law – a strong mark. All trademark laws stem from the common law rule that a mark belongs to the first person to use it for a particular product or service in a particular market area. This is a description of a good mark for business purposes. While some arbitrary statutory limitations have evolved, such as limiting protection for marks which include flags, the common law basically prevails.

Another good thing is that the smallest of businesses has access to the same asset used in creating strong marks as does the biggest corporations – the English language. Anyone can create a strong mark with a little work.

The strongest marks, those which enjoy immediate and broadest legal protection, fall in two groups, fanciful and arbitrary.

Fanciful marks are those which use created rather than existing words. Good examples are everywhere and belong to the largest corporations – EXXON for gas, KODAK for cameras and film, KLEENEX for facial tissues. These marks are new and therefore distinctive. They donıt describe anything. They enjoy the highest degree of legal protection.

In addition, good marks suggest a desirable property on condition. It may be hard to imagine what EXXON suggests, although some believe it suggests twice elected President Nixon. KODAK may suggest the sound made by an early camera, as well as reflecting George Eastmanıs belief that people like to pronounce the letter K. KLEENEX clearly suggests a clean condition.

Arbitrary marks use existing words but use them in a new way to designate products or services. A good example is APPLE for computers. APPLE would be a terrible mark for the common red fruit because it is the normal term for that fruit. It gains its value as a mark for computers through advertising which associates APPLE with computers in the public mind. This leads to an interesting point – APPLE was used by the Beatles for their music company before the APPLE computer company became involved with music. This may have contributed to APPLE computerıs choice of a new mark for its portable music system, IPOD.

How can arbitrary marks suggest positive attributes? APPLE certainly doesnıt suggest anything about computers, but people like to eat apples; apples remind them of their childhood, momıs apple pies, and other good experiences. The word carries some of these warm feelings and extends them to computers. In a similar fashion the mark ESKIMO for ice cream doesnıt describe the product, but conveys the suggestion of coldness and frost, good properties for ice cream.

Marks should be used properly for maximum benefit. Letıs imagine you have a company named ZAPPO Mfg. Co. and you are making and selling perfume. The bottle label would feature ZAPPO in some prominent way, set apart by font or color. After ZAPPO there would be the letters T.M. or ® as further indication that you regard ZAPPO as your mark. The ® can be used only after obtaining federal registration of the mark, but T.M. can and should be used with all unregistered marks. It is important that the generic name of the product or service be associated with the mark, in this case "Gardenia Perfume" which would be below the mark on the label. Finally, youıll probably want to include your address "ZAPPO Mfg. Co., 12 Perfume Breeze Alley, Columbia, Maryland 21044." Note that use of the company name in an address does not constitute use as a trademark as it is not associated with a product.

Donıt conclude from this discussion that only fanciful and arbitrary marks can be strong marks. A descriptive family name, such as MCDONALDıS for food, can become a strong mark through advertising and use over a period of time. The exclusive use causes the mark to become associated with the product in the publicıs mind making it distinctive. This process is expensive and takes a long time. Stick with fanciful and arbitrary marks if you want a strong mark quickly and cheaply.

William S. Ramsey    (410)740-2225




NAMING YOUR HIGH TECHNOLOGY COMPANY
"A good name is better than riches." Cervantes, 1615.

A company name is important, and it is worth spending time on name selection. A good company name is protectable, it suggests the product or service of the company, and it is easy to remember.

Protectable names are easy to create. The naming process does require some thought and at times seems illogical. Since company names are generally used as trade marks or service marks, the rules for protecting marks apply to company names.

The function of a mark is to identify the origin of the product or service. A mark is protectable to the degree that it uniquely identifies the origin of the product or service.

A generic term, on the other hand, is the common word normally used to name a product or service. For example, "banana" is the generic term for a certain yellow fruit.

A generic term can never be a protectable mark. BANANA cannot be a protective mark for that certain yellow fruit.

Unfortunately, high technology entrepreneurs often use generic terms to name their companies. They name their companies for what the company does. This is a good way to name an enzyme, such as glucose isomerase, or computer hardware, such as a random access memory. It’s not such a good way to name a company. The problem is that combining a series of generic terms into a company name leads to a name which is weak and difficult to protect. Other companies can use the same or similar generic terms in their names. To illustrate this point I’ve developed a generator for creating weak biotechnology company names.

"Ramsey’s Weak Biocompany Name Generator"

Paragraph 1. Genomic, Organismic, Transgenic, Mitochondrial, Nuclear, Ribosomal, Enzymatic, and Isomeric.
Paragraph 2. Research, Development, Database, Code, Systems, Instrument, Information, and Codon.
Paragraph 3. Company, Institute, Corp., Devices, Limited, Solution, LLP, and Concept.

To use the Generator, take one or more words from Paragraph 1 and combine them with one or more from Paragraph 2, and one from Paragraph 3.

This leads to "Transgenic Database Limited" or "Ribosomal Codon Institute," or even "Genomic Nuclear Systems LLP." (Yes, I am making this up. You can too).

These names may sound pretty good, and even familiar. The problem is, each of these names consists entirely of generic terms and each name will be difficult to protect.

More importantly, these names resemble the names of other companies. In a few years the company owner who used my generator will notice that customers and clients are confusing his or her company with other companies. Namers should fish in the generic term pool with caution.

Creating a protectable name is harder than working the Ramsey Weak Biocompany Name Generator, but not much harder. Both "arbitrary" or "fanciful" names are strong and protectable.

Perhaps the most famous arbitrary name is APPLE COMPUTER. "Apple" is a generic term for certain red fruit and is not a protectable mark for such fruit. It’s a great mark for computers, however, because its use uniquely identifies the origin of the computer.

One of the best known fanciful marks is EXXON for energy products. This mark was created for this use and uniquely identifies the origin of a wide range of products.

A good local example of a fanciful name is CELERA GENOMICS CORPORATION. GENOMICS CORPORATION is the generic part which describes what the company does. CELERA is the fanciful part, created for this use and uniquely identifying the source of the company’s products and services.

The second desirable characteristic of a name or mark is that it suggests the product or service. A suggestive mark requires imagination to relate the mark and product or service.

CELERA is a good example. It suggests "cells," the raw material of the company’s products and services. APPLE certainly doesn’t suggest computers, but it does suggest a mood which is pleasant and whimsical. EXXON also doesn’t suggest a product or service. Some say EXXON was designed to suggest President Nixon. The name SEQUOIA SOFTWARE CORPORATION, another local company, suggests software which is impressive, long-lived, and durable.

Finally, the name should be easy to remember. It’s hard to predict which names will be easy to remember, although initials and words that are hard to pronounce generally also are hard to remember. Suggestive and whimsical names are easy to remember. Fortunately, this characteristic is easy to test. Simply read a list of names including your test name to a friend. Some time later ask him or her which names can be recalled.

Naming is one of the few arenas in which the smallest company competes on an equal footing with the largest. All have equal access to the alphabet and the endless resources of the English language. It’s up to you - your company can be a GENORA or a TRANSGENIC CODON DATABASE CONCEPT.

William S. Ramsey    (410)740-2225

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INTERNET AND THE COURTS

Domain Names

So, you have gotten onto the Internet and have registered your domain name with Internic and now you are ready for business on the Web, right? Well, probably, but there could still be a few problems to work out. For example, Active Media International, Inc. secured the domain name "actmedia.com" for use in taking its business on-line. All was well until they were informed by a company named Actimedia, Inc. that the later company had a trademark interest in the mark ACTMEDIA and that it wished to obtain the domain name "actmedia.com" for its own use.

Active Media, Inc. was not inclined to give up its domain name, reasoning that it had the earlier use as a domain name and Actimedia, Inc. sued for trademark infringement. The case was heard in a Northern Illinois federal district court and in July 1996 resulted in an injunction against Active Media International’s use of the domain name. Actimedia, Inc. had obtained a federal trademark registration in 1986 on the trademark ACTMEDIA. The company filed the necessary affidavits after 5 years of use of the mark, and the mark became incontestable (which severely limits the grounds available to an accused infringer for attacking the registration .) On trying to register the interned domain name "actmedia.com" in 1995, the company discovered that the domain name was held by Active Media International, Inc. The decision of the court was based on both federal trademark and Illinois anti-dilution grounds. Furthermore, Active Media International, Inc. was ordered to execute a transfer of the domain name to Actimedia, Inc.

The take-home lesson seems clear - if you already have a registered trademark, you should use it as your domain name. If you have a valuable domain name, you should obtain federal trademark registration for it. Also note that federal registration of a trademark used as a domain name may be possible for marks which are descriptive for a business (other than the information presentation business of a website) and therefore not registerable as a trademark.

International Websites and U.S. Trademarks

What about the international aspects of the internet? Can actions on a website in one country have consequences in another? These questions are slowly being worked out through the various courts. Under some circumstances, a U.S. court can affect a website in Italy.

Some fifteen years ago Playboy Enterprises, Inc. obtained an injunction against Chuckleberry Publishing, Inc. forbidding distribution in the United States of products associated with the trademark PLAYMEN (because of infringement of the trademark PLAYBOY). Now, in a recent lawsuit, a federal district court in the Southern District of New York considered a digital version of the publication PLAYMEN which was located on a website in Italy and which offered on-line subscriptions throughout the world. The court held that since distribution of the publication was banned in the U.S., the vendor must refuse to accept subscriptions from the U.S.

Use of the internet to distribute the images could not have been contemplated by the parties at the time of the injunction. Nevertheless, the court held that the purpose of the injunction, to restrict distribution of the infringing product in the U.S., was consistent with restriction of the distribution of the product by the internet. Publication by an internet subscription constituted distribution for this purpose.

William S. Ramsey



MARYLAND TRADEMARK REGISTRATION
Why You Need It.

Every business in Maryland whose trademarks are not protected by a federal registration should consider a Maryland trademark registration.

Trademark registration is distinct from trade name reservation associated with registering a corporation or limited liability entity with the State Department of Assessments and Taxation. A trade name identifies a business entity. Trademarks are words or logos used to identify the source of a product or service. A trade name can be used as a trademark by attachment to the label of a product, for example, or by association with the advertising or provision of a service. Trademarks are registered by application to the Trademark Division, Office of the Secretary of State. Trademark registration requires an application separate from that involved with registering a corporation or limited liability entity.

Common law trademark rights are obtained by being the first to use a mark for a particular product or service in a particular market area. No registration is required for common law rights. Federal trademark registration is based on the common law but has the major advantage of expanding the area in which protection is obtained to include the entire country. Maryland trademark registration also is based on the common law but provides few rights beyond those already available in the common law. Why then should you register a Maryland trademark?
1. Maryland registration tells the world that you claim ownership of your mark and intend to enforce its use.
You’re saying "I own this mark, and look here, the State of Maryland agrees with me."
2. Maryland registration creates a legal presumption that your mark was in fact in use on the indicated date.
3. A Maryland registration will show up on a national trademark search and will discourage others from seeking federal registration for that mark.
4. Maryland registration, unlike federal registration, is available without use of the mark in commerce under federal regulation (interstate, or with foreign countries, for example).
5. Maryland registration may provide additional remedies against an infringer.
6. Maryland registration is relatively quick and inexpensive

Although the formal requirements for registration of both federal and Maryland trademarks are very similar, the Maryland process is quicker. The Maryland Secretary of State sometimes seems easier to deal with than the federal Patent and Trademark Office. On the other hand, only a federal registration allows use of the R within a circle symbol (the bug). There is no intent-to-use application, as in the federal case. You must actually be using the mark in commerce before applying for a Maryland registration. . The application fee for a Maryland registration is $50 per class of use; for a federal registration, $325 per class of use.

In summary, if you can obtain federal trademark registration do so. Otherwise, consider Maryland registration.

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William S. Ramsey   (410) 740-2225

TRADEMARK DILUTION

The Common Law of trademarks gives ownership in a mark to the first person to use the mark for a certain product or service in a certain market region. This is based on the basic function of a trademark in designating the origin or a product or service. A consumer knows the origin of product or service from the mark. Trademark infringement occurs when an accused mark causes confusion in the mind of the consumer as to the true source of the product or service. We live in an age of branding. There has been a tremendous expansion of trademark or brand function beyond the traditional designation of origin. Today there are a tremendous number of trademarks competing for the consumer dollar. Brand name along with price are the most important factors influencing consumer choice. Consumers use trademarks as a guarantee of quality. Trademarks are an important medium of advertisement. Vast amounts of advertising dollars are spend on developing brand awareness. In fact, some companies operate primarily as brands. For example, Nike does not manufactures sports equipment and clothing in its own plants but rather buys those articles manufactured by others to its specification. Nike then brands and distributes the products. These advertising and quality assurance functions give trademarks value which go beyond the traditional use of trademarks as indicating origin. All this leads to the concept of trademark dilution.

Trademark law does have some delightful legal terms. I’m thinking of the term "fanciful" to describe imaginative coined marks, such as KODAK. Unfortunately, we also have "dilution." Dilution refers to the use of a famous mark by a unrelated person for a unrelated product or service, with harm to the value of the famous mark. There is no question of confusion in the mind of the consumer as to the origin because the product or service involved is different between the famous mark and the dilution mark. Nevertheless, the owner of the famous mark may suffer from dilution. Dilution comes in three flavors, blurring, tarnishment, and cybersquatting.

Blurring occurs when consumers are exposed to the famous mark by a number of different goods and services (supplied by the infringer), thereby weakening the mark’s ability to serve as an unique identifier of the owner of the famous mark. For example, suppose a car company came out with a line of NIKE cars. This would harm the owner of the NIKE mark by dilution through blurring.

Tarnishment occurs when the famous mark is used on goods or services of inferior quality or in an unwholesome context. The reputation of the mark for superior goods and services is harmed thereby.

Cybersquatting occurs when a famous mark is used by another on the Internet. This reduces the ability of a consumer to obtain access to the famous mark’s web page. Cybersquatting can occur even if the famous mark is not visible on the infringer’s web pages if it is used in a metatag. A metatag is a keyword used by search engines to direct searchers to a web site.

All this sounds rather academic, but the Federal Trademark Dilution Act of 1995 extended dilution protection to federal trademarks. In addition, in 1999 the Trademark Trial and Appeal Board, the administrative appeals court for trademarks, was gives authority to consider dilution in ruling on trademark registration.

This is a rather long-winded explanation to the question "Why can’t I call my Sno-Cone stand VOLKSWAGEN?" Sorry about that.

A registered patent attorney, William S. Ramsey practices patent, trademark, copyright and trade secret law in Columbia and can be reached at 410-740-2225.

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TOP LEVEL DOMAIN NAMES

After delay enough to question the concept of "internet time", the Internet Corporation for Assigned Names and Numbers has decided on seven new top-level domains. The new additions will be .aero, .biz, .coop, .info, .museum, .name, and .pro. One may wonder why this weird assortment of names was chosen. A question which can be answered, however, is to ask what all this has to do with trademarks. Suppose a person has a federally registered mark, say DOGHIDE.COM, for selling dog grooming supplies on the internet. Is it then necessary to also file for registration of DOGHIDE.BIZ, DOGHIDE.INFO, etc.?

First of all, the Supreme Court has never held on this issue, and only a few of the various federal appeal courts have dealt with such cases. Nevertheless, we can make some projections based on current trademark law.

The basic rule for determining if one trademark infringes on another is whether use of the accused mark raises the likelihood of confusion in the minds of the consumers. In other words, is it likely that a customer seeking to buy your clippers at DOGHIDE.COM will mistakenly believe such clippers can be obtained from DOGHIDE.BIZ or DOGHIDE.INFO.

Courts have developed several tests to resolve this question.
1. How similar are the marks in sound, appearance or meaning? Here they appear very similar in all aspects, and confusion may be likely.
2. Are the goods or services closely related? If DOGHIDE.BIZ also sells clippers, confusion is more likely. If, however, DOGHIDE.BIZ provides only dog grooming services, or DOGHIDE.INFO provides only lists of grooming services, confusion is less likely.
3. Is the trademark strong? A strong mark is an arbitrary mark (such as APPLE for computers), or a fanciful mark, (such as KODAK for film). A mark which, through use, has an established meaning in the minds of the consumers, (such as MCDONALD for fast food) is also strong. Strong marks are more likely to be infringed by similar marks. Weak marks, such as STERLING or STAR are less likely to be infringed because they are used by so many people for so many different products and services.
4. Are the products or services involved expensive. People are more aware of buying expensive goods and services, so confusion with similar marks becomes less likely. Inexpensive goods and services may be purchased with little consideration and confusion may be likely.

Trademark law is ancient and highly developed in the state and federal courts, and many other facts are considered in the courts. Nevertheless, some basic advice concerning domain names still applies. If you have a registered trademark register and use it as a domain name. If you create and register a domain name, register it as a trademark. Don’t infringe someone else’s trademark (unless you like to spend time in court).

Not Legal Advice - William S. Ramsey, Columbia, MD   410-740-2225

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RESOLUTION OF DOMAIN NAME DISPUTES

The first website, www.info.cern.ch, was created in 1990 by Tim Berners-Lee, the scientist at the European Organization for Nuclear Research (CERN) who invented the World Wide Web.

Domain names using the three most popular top level domain names; .net, .org and most of all, .com, proliferated along with the incredible growth of the Web. Domain names are assigned on the "first there, first served" principle.

The domain name registration procedure was predictably exploited by those who recognized the commercial significance of domain names. Many entrepreneurs registered hundreds, if not thousands, of domain names with the intention of later selling the names at a profit. Many domain names identical to or confusingly similar to existing trademarks were registered and sold in this manner. This practice is termed "cybersquatting".

In some cases cybersquatting is covered by the Lanham Act, the federal trademark law. Infringement of the Lanham Act involves use of a mark in a way which causes the likelihood of confusion in the mind of a consumer. Since names acquired by a cybersquatter generally would simply be registered, warehoused so to speak, rather than used to identify a product or service, this practice generally didn’t fall under the Lanham Act.

Another federal statute, the Federal Trademark Dilution Act, is useful in some cases, but it protects only "famous" trademarks. Most trademarks do not benefit from this statute.

The federal Anticybersquatting Consumer Protection Act (ACPA) is useful against a cybersquatter who has registered a distinctive or famous mark or confusingly similar mark with bad faith with intention to profit from that mark. This statute also provides for recovery of damages and, in some cases, attorney fees, as well as an injunction against further use of the offending domain name.

Use of the ACPA against a cybersquatter, however, has the disadvantages of taking a long time and costing a lot of money, as the case must be brought in federal district court. In order to facilitate action against cybersquatters, the internet administrative group ICANN developed an arbitration procedure, the Uniform Dispute Resolution Policy (UDRP). Agreement to submit disputes to arbitration is a part of every domain name registration.

In the UDRP a person who believes his or her registered or unregistered trademark is being infringed (called the complainant) files a complaint against the person who has registered the domain name (called the respondent). The respondent has an opportunity to reply. A panel of either one or three arbitrators then decides the issue. There is no discovery, no hearings no presentations in court.

The complainant must show that (1) the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; (2) the respondent has no rights or legitimate interests in respect to the domain name; and (3) the respondent registered and is using the domain name in bad faith.

It is not necessary that the respondent files a response. If the respondent does not reply, the panel simply determines if the complainant has met the burden of showing the above three points.

Only two outcomes are possible under the UDRP; the complaint is not sustained and there is no change in the domain name; or the complaint is sustained and the domain name register is ordered to either transfer the ownership of the domain name from the respondent to the complainant or to cancel the domain name. There are no provisions for damages or attorney fees or injunctions.

After a decision is rendered either party has 10 days to sue in a court to reverse the decision.
The UDRP was instituted at the end of 1999. It has been widely used and fulfills the goal of rapid inexpensive resolution of cybersquatting cases.

The average time to resolution of a case under the UDRP is 52 days from receipt of the complaint.

The fee for a single panelist (arbitrator) for 1-5 domain names is $1500. For 6-10 domain names the fee for a single panelist is $2000. For a panel of three panelists, for 1-5 names the fee is $3000; and $4000 for 6-10 names. In a single panelist case, the complainant pays. If the complaint requests a panel of three arbitrators, the complainant pays the entire fee. If the respondent asks for a panel of three, the parties split the fee.

There now appears to be a practical, reasonable way to counter cybersquatters without meeting their monetary demands. The new principle for registering domain names seems to be "first there, first served, of those with rights to the name"

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William S. Ramsey 410-740-2225

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