Duets Blog : Creativity and the Law: DuetsBlog

[Spoiler alert – this post is about the season finale of Mad Men. If you haven’t watched it, please skip this post (never fear, you can revisit it in the archives once you’ve watched the episode)]. 

In the season finale of Mad Men, the best show on television, the executives of the fictional Sterling Cooper advertising agency stage a mutiny upon learning that Putnam Powell and Lowe, the British agency that purchased Sterling Cooper only a year ago, is now selling Sterling Cooper to McCann-Ericson. Taking the proverbial bull by the horns, the team works all weekend to secure clients, ensure the confidence and loyalty of the top creative and account management talent, and a hotel room at The Pierre from which to launch their new empire.

The name of their new agency? Sterling Cooper Draper Price. Short, crisp, to the point and accurate, as it reflects the names of the main players in the new partnership forged in the dark of night – Sterling Cooper founders Burt Cooper and, by way of inheritance, Roger Sterling, creative director Don Draper, and CFO Lane Price. 

But is it legal? Probably not.

The reason, simply put, is that Powell Putnam and Lowe, the current owner of Sterling Cooper, likely assumed ownership of the rights of the STERLING COOPER trademark when it purchased the company. Similarly, as McCann-Erickson has purchased the entirety of Powell Putman and Lowe, it likely assumed ownership of those rights as well. 

But what about the fact that Sterling Cooper Draper Price is made up of Msgrs. Sterling, Cooper, Draper and Price? Can’t they use their own names to identify their own agency?  The answer is no, not unless Sterling Cooper Draper Price purchases back the rights to STERLING COOPER, or McCann-Erickson abandons the mark altogether by subsuming the old Sterling Cooper under the banner of McCann-Erickson, which, notably, Powell Putnam and Lowe did not do, in large part because of its sterling reputation (pun intended!).

Will McCann-Erikson sue Sterling Cooper Draper Price for trademark infringement?  Stay tuned over the long haul – we have nine months until Season 4 begins.

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Do you suppose Dial has any regrets in letting the clock logo go?

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Trademark types: As promised, here are some of my more detailed thoughts and perspectives (at least for the time being) on the most significant trademark case of the year: In re Bose.

Thanks to Thomson Reuters for asking me to share them with their readers. I look forward to some great dialogue on the likely implications resulting from this long-anticipated trademark fraud decision.

Marketing types: An adversary's ability to cancel your company's trademark registration for fraud just got much more difficult with this important Bose decision. Basically, fraud means fraud again.

Instead of your adversary only needing to prove that you should have known that a material statement made to the Trademark Office actually was false at the time you made it (as was the law applied by the U.S. Trademark Office for the last six years), now, simple negligence is no longer enough to establish trademark fraud, instead, an actual intent-to-deceive the Trademark Office must be proven.

Having said that, despite this revived more difficult-to-prove fraud standard, it is as important as ever to treat the statements or representations you make to the Trademark Office as seriously as ever, and with the utmost solemnity, making sure you truly understand what you are signing so you can actually affirm the truth of those statements and representations.

It probably goes without saying that the apparent simplicity of the electronic trademark forms can be quite deceiving. So, there are no stupid questions when it comes to your understanding before signing electronic form documents that are submitted to the Trademark Office.

UPDATE: ExecSense Webinar on the Bose Decision, now available for purchase. Just so you know, all royalties due to me are being donated to The Ronald McDonald House Charity.

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This sponsored banner ad is currently appearing in AdAge's Daily News on-line newsletter:

How many boxes of tissue do you suppose this ad is responsible for selling?

If the answer is none, that is probably fine with Kimberly-Clark since the return on investment for this ad is measured quite differently, I'm sure, given how the frequently misused Kleenex® brand is currently enjoying the lofty status as one of The 100 Best Global Brands. No doubt, Kimberly-Clark would like to keep not only this annointed status, but even more basically, it would like to keep the status as a brand and protectable trademark intact too.

In all likelihood, trademark types are behind this kind of advertisement, or perhaps more properly termed, "public service announcement," and they also are probably behind the "brand tissue" phrase, closely following each use of the brand name Kleenex®. Both measures help emphasize to consumers that Kleenex® is a brand of tissue coming from a single unique source, not a type or category of tissue coming from a variety of different competing sources.

These kinds of precautions are important educational steps a trademark owner can take when a meaningful portion of the public may misuse the brand name as a generic term. They are designed to shape the public's proper use of the trademark, and, hopefully, prevent the trademark owner's ultimate fear: Genericide. Indeed, we previously noted Kimberly-Clark's success to date on this very subject:

[W]hen the public misuses a famous trademark as a generic term and the brand owner risks losing exclusive rights through changes in the common meaning of the term. Avoiding the risk of this happening is something Kimberly-Clark® knows more than a little about, I suspect. No doubt, the legal team at Kimberly-Clark® has done an impressive job of preventing the KLEENEX® brand from following former brands like ESCALATOR, TRAMPOLINE, and ZIPPER, to name a few, into the unpleasant graveyard of genericide.

In the end, however, trademark owner's efforts aside, the public will decide the issue of genericide, as we have discussed before:

Unlike the kind of trademark abandonment that automatically results from the single act of non-use of a trademark coupled with no intention at that time to resume use of the trademark, the kind of trademark abandonment that is also known as genericide, in contrast, results from a gradual change in the meaning of a trademark or brand to an unprotectable generic term. A change that shifts the meaning -- understood by a majority of the relevant consuming public -- from identifying, distinguishing and indicating a single source for a particular product or service to a designation that connotes no single source at all, but instead, an entire product or service category with multiple unrelated sources.

So long as the "majority of the relevant consuming public" (more than half) continue to understand Kleenex® as a brand, the exclusive trademark rights will remain intact.

If you read AdAge, congratulations, apparently we are part of the "relevant consuming public," or perhaps you are viewed as someone who has influence on how the "relevant consuming public" perceives the Kleenex® brand.

I hope I did my part here, now it's your turn.

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A few years ago, the world was introduced to arguably the creepiest fast food mascot of all time: The King.  For many of us, this introduction came courtesy of a frightening commercial suggesting that we "Wake Up With The King."  Over the following years, TK expanded his popularity.  He went from our bedrooms to our football fields (other examples here and here).  Eventually, TK became less about burgers, and more about celebrity.  He became more than a mascot, inviting (fake) controversy and spawning imitators.  As a matter of fact, he has become immensely popular with 114,000 My Space friends.

So, the moral of the story is that Burger King has done an incredible job of product promotion here and companies should do whatever they can to establish their symbol as a pop-culture icon, right? 

Maybe.  Consider the following:  what if TK eventually becomes such a pop culture icon that he no longer represents Burger King.  Stated differently, what if the public appropriates TK for its own uses such that he can no longer be considered an indicator of source for Burger King's goods and services?  Could we be looking at the first case of trademark regicide, as opposed to trademark genercide?  I would say that we have a ways to go at this point.  Nonetheless, I think it's a realistic possibility given today's viral marketing environment.    

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Luxo AS, a Norwegian light manufacturer and distributor, has sued Disney and Pixar et. al. asserting various trademark-related claims arising from Disney's and Pixar's use of the LUXO trademark.  In an always interesting case of trademark law/branding meets fair use, Luxo has alleged that Disney/Pixar's use of "Luxo Jr." to identify the "hopping lamp," which has been the corporate mascot of Pixar since 1986, has crossed into the realm of forbidden behavior.

Although Pixar has been using the mascot since 1986, according to the complaint, it was only recently that infringing goods or services were being sold under the allegedly infringing mark.  Specifically, Disney/Pixar is now selling a limited edition DVD copy of Up packaged with a working "Luxo Jr." collectible desk lamp.   Additionally, they are using Luxo Jr. to draw in visitors at Disney's Hollywood Studios.

This case raises some interesting trademark related questions: (1) Has Luxo relinquished some of its rights by not previously attempting to stop Pixar's use of the "hopping lamp?"  (2) Why didn't Luxo take action earlier? (3) Absent Disney/Pixar's expansion of its use to selling lamps, would Luxo have had a viable infringement case?

If I had to venture a guess, I would say that Luxo didn't really have a problem with Disney/Pixar's use until it got a little too real with the lamp sales.  Arguably, the animations enhanced the popularity of Luxo's products and lead to increased lamp sales.  Luxo apparently didn't have a problem until Disney/Pixar tried to monetize some of that popularity itself by packaging a lamp with a DVD.

Moreover, the viability of an infringement claim would have likely required an examination of the often cited, yet often elusive "fair use" analysis.    As demonstrated by the Spa'am muppet case, infringement isn't clear cut when someone is using your mark to say something besides "buy my goods." 

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Today is a really, really big day for trademark types.

As many of us have been saying for a couple of years now, trademark fraud (i.e., fraud on the U.S. Trademark Office) continues to be one of the hottest issues facing trademark owners and the attorneys who represent them. Perhaps after today, not so much, but who really knows, we'll see.

For those not already plugged into the issue of trademark fraud, most mark the 2003 decision of the Trademark Trial and Appeal Board (TTAB) in Medinol v. Neuro Vasx, as the starting point for a much lower, and easier to prove, standard of fraud.

After Medinol, if a trademark owner knew or "should have known" it made a material false statement to the Trademark Office, the entire resulting trademark registration was subject to cancellation at any time. Since then, and following the reasoning in Medinol, the TTAB issued numerous decisions granting opposition or cancellation of trademark applications and registrations on fraud grounds, causing trademark owners and their attorneys great concern with what many have called a strict liability standard, not one based upon an actual "intent to deceive" the U.S. Trademark Office. Most of these cases have fallen into the "overinclusive" goods and services category of fraud cases -- basically, cases having sworn statements that the applied-for mark is currently in use in connection with all of the listed goods and services, when in fact, something less than all the goods or services are actually in use with the mark.

For those interested on the development of the trademark fraud issue, here is a pdf of my slides for a talk I gave in January 2008, at LAIPLA's Washington in the West continuing education conference.

As some of you may recall, during several of my talks over the last two years, I have figuratively flashed a yellow light and cautioned that the CAFC -- the TTAB's primary reviewing court --  has not been heard on the subject of trademark fraud for quite some time, and it has not been clear to me that the CAFC actually would endorse the TTAB's easier to prove fraud standard in the Medinol line of cases. Today the CAFC weighed in on the subject.

Earlier today, the United States Court of Appeals for the Federal Circuit (CAFC) decided In re Bose, a long-anticipated decision on what it takes to establish fraud before the U.S. Trademark Office. In doing so, the CAFC flashed a red light, indicating the TTAB had read "too broadly" prior CAFC precedent that had mentioned the words "should have known," and it specifically reaffirmed "that a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO," and it further redirected the TTAB: "Unless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish a fraud claim."

So, after today, trademark fraud still exists, and it can be proven, provided it is "proven to the hilt," with "clear and convincing evidence," leaving "no room for speculation, inference or surmise," and so long as "any doubt must be resolved against the charging party." Basically, "deception must be willful to constitute fraud." [Here is a link to a pdf of the CAFC's Bose decision].

Hat tip to John Welch of the TTABlog for alerting his followers of the CAFC's decision published first thing in the morning today.

My more detailed perspectives about the CAFC's Bose decision will follow later.

Also, stay tuned, because we continue to await the CAFC's fraud decision that it is currently reviewing in Grand Canyon West Ranch, LLC v. Hualapai Tribe.

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Although intellectual property lawyers of the Dr. No variety may not like to admit it -- I submit that, not all slippery slopes are created equal. While some slippery slope cautions might prevent a few bumps and bruises in traveling along a particular path (e.g., the one on the left below), I suspect far fewer slippery slope cautions actually prevent life-ending falls from perilous cliffs (e.g., the one on the right below), yet other man-made slippery slopes specifically are designed for fun and enjoyment -- not danger -- and have generated enormous sales over the years (e.g., WHAM-O's SLIP'N SLIDE brand products).

So, putting aside Professor Douglas Walton's teaching that the slippery slope argument is "often treated as a fallacy," it is worth asking what brand of slippery slope most accurately represents the risk associated with marketers using their brands and trademarks as verbs?

As discussed in Part I of my Just Verb It? series, many marketers love the idea of having their brands embraced as verbs, but many trademark lawyers totally forbid any "brandverbing," i.e., "mis-using" brands (adjectives) as verbs: "Why? To prevent brand names and trademarks from becoming generic names and part of the public domain for anyone to freely use, even competitors."

No doubt, genericide -- the ultimate fear of using brands as verbs -- equals certain trademark death, a horrible result from both marketing and legal perspectives; but, I submit it doesn't necessarily follow that brandverbing activities automatically result in trademark death or genericide. To be sure, far more than a single act of verbing a trademark or brand must occur before a majority of the relevant consuming public no longer sees the claimed trademark or brand as identifying and distinguishing certain products or services as coming from a single source. Given this, there must be an opportunity to engage in some thoughtful and creative level of brandverbing without committing trademark suicide, right?

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Brand managers and marketers often wonder about the risks and consequences of not enforcing or protecting their trademarks from infringement. A shooting target formed by a series of concentric circles is the best graphic I have found to illustrate the legal answer to their frequent question.

Judging from the robust criticism Twitter has received about its lax or laissez-faire approach to trademark enforcement, the Twitter folks have never seen (or perhaps they have chosen to ignore) the shooting target graphic illustration. Distilling these criticisms to their essence, basically there are more than a few folks out there asking Twitter: "What are you doing?"

The irony of this is hard not to find amusing, given how Twitter explains its reason for existence this way: "Twitter is a service for friends, family, and co–workers to communicate and stay connected through the exchange of quick, frequent answers to one simple question: What are you doing?" For Twitter, only time will tell how "simple" the trademark enforcement "question" is for itself to answer.

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It is probably fair to say from my initial Just Verb It? post, the many articles referenced in that post, the substantial panel of commentary to the post, and additional interest in the topic, that at least two truths about "brandverbing" are beyond much, if any, debate: (1) Lawyers (including the International Trademark Association's guidelines on proper trademark use) routinely advise brand owners not to use their brands as verbs; and (2) many marketers pursue brandverbs anyway, believing that any legal risks are outweighed by any marketing gains in solidifying the brand as a referent for the entire category.

Indeed, the marketers at Culver's Restaurants, a fast-growing regional fast-food chain in the Midwest, apparently are better arm-wrestlers than their lawyers, as evidenced by their "verbing" of the Culver's brand in the more than year old "Get Culverized" campaign: 

Part of this on-going "verbing" campaign introduces numerous "Culverisms" that appear not only in advertising, but on soft-drink cups and to-go bags. (Apparently Culver's has disregarded the memorable and humorous advice of "Ferris" in one of my favorite films, Ferris Bueller's Day Off: "-Ism's in my opinion are not good. A person should not believe in an -ism, he should believe in himself.")

At any rate, Culver's is not alone in embracing "brandverbs" as the marketers at Microsoft also appear to have convinced their legal team that "verbing" can't be all bad, at least, with respect to the new Bing search engine brand name, where Microsoft writes to consumers: "We sincerely hope that the next time you need to make an important decision, you'll Bing and decide." (My prior post on Bing is, here).

Even the Yahoo! Company Store is selling these promotional "brandverbed" bumper stickers:

So, what do these companies know or at least believe that others on the "straight and narrow" don't know or at least believe?

Stay tuned for Part III of the Just Verb It? series on DuetsBlog, coming soon.

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There is a growing interest and, quite frankly, a dogged persistence among branding professionals to select brand names that have the ability and potential to be "verbed." This makes trademark attorney types nervous and those of the "Dr. No" variety actually become unglued.

So, why the emphasis or fascination with verbs anyway? The answer apparently can be found in the definition of a verb: "A verb is a doing word (helping, grabbing)." This feature is appealing to marketers. In addition, some argue that "verbing" a brand extends its reach through effective "word of mouth branding." Some feel so strongly about the marketing benefit they argue that "having the public utter your company name as a verb is like going to heaven without the inconvenience of dying. Getting 'verbed' is the ultimate accomplishment for any brand -- the marketer's Shangri-la."

As marketing maven Seth Godin argued as early as 2005: "Nouns just sit there, inanimate lumps. Verbs are about wants and desires and wishes." Given that limited binary choice, David Cameron's recent and thoughtful "Brandverbing Brands" post on his OnBrands Blog, asks a reasonable question: "Wouldn’t you rather have your brand in the latter category?"

I'm wondering and you might be wondering too, what happened to door number three? We'll get to that, patience.

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Airbrushing is a familiar technique among advertisers looking to avoid the risk of trademark infringement or dilution liability when branded props of others appear and would otherwise be recognizable. It can work well when removing a traditional visual trademark, i.e., a logo or word mark, because there can be no likelihood of confusion with (or dilution of) a visual mark when the claimed mark cannot be seen. 

But what about when a branded prop dominates the ad or the identifiable trademark is another's product container or package, a single color, trade dress, or perhaps the shape or configuration of the product or prop itself? What is critical for advertisers to appreciate is that when non-traditional trademarks are the subject of the ad and concern, the airbrush and any digital manipulation are less helpful and may be entirely ineffective in erasing trademark liability.

By way of a hypothetical example in the non-alcoholic beverage world, airbrushing the Coca-Cola word mark may not be sufficient to avoid liability, so long as the distinctive Coca-Cola bottle is left intact, say, in a Chevrolet ad. Likewise, by way of another hypothetical example, this time in the alcoholic beverage world, presumably the current owner of the Schlitz brand would object to another's commercial use of its distinctive Schlitz label even if the Schlitz word mark was airbrushed or otherwise removed.

Now, for a not so hypothetical example concerning Schlitz' ads, continue reading after the jump.

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Too often, trademark owners that seek to exploit their brands through various licensing arrangements inadvertently fall into the trap of an unintended franchise. Such disguised franchises can lurk in a variety of agreements and relationships, including reseller, distribution, and independent contractor agreements that include a trademark license with a fee along with very detailed quality control requirements. Sometimes those requirements are more a reflection of the licensor’s intent to control the business activities of the licensee than merely to ensure the products and services meet certain quality control standards. When the licensor exerts too much control over the day to day activities of the licensee, the relationship can evolve from a licensor/licensee relationship to a franchise with serious implications.

Several states have a "three prong test" to determine if a franchise exists. Those requirements generally include: (i) a license to use a trademark; (ii) the payment of a franchise fee for use of the mark; and (iii) significant control exerted by the licensor/ franchisor or significant assistance given by the franchisor or assistance by the licensor. The control required to create a franchise relationship can be established by training programs, operation manuals, and established business or marketing plans or methods of operation.

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Recently, UnderConsideration's Brand New blog commented on the new logo adopted by Much Music. After 10 years of using MUCHMOREMUSIC, the logo was changed to MUCHMORE. The new logo is aesthetically more pleasing, but the change raises an important issue. Modernizing old logos can result in abandonment of the old mark, which means a loss of all trademark rights in the old logo.

In order to retain the trademark rights from the old version of the mark, the modified mark must contain what is the essence of the original mark and the new form must create the impression of being essentially the same mark. In other words, the new mark must retain the same overall commercial impression of the old mark. Generally, modernizing a mark will retain the same overall commercial impression of the old mark. However, the risk of creating a different commercial impression looms when elements are added to or deleted from the old mark.

In Much Music’s case, they deleted the term MUSIC, added color, and stylized the terms in a different way. The different stylization of the terms probably does not create a different commercial impression. However, the addition of color when the old logo did not have color and deletion of the term MUSIC could cause the new logo to create a commercial impression that is different from the old logo. The potential loss of 10 years of use could have a significant impact on the brand going forward. Therefore, it is important to keep this issue in mind when modernizing marks especially marks that have been used for many years.

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This kind of sign is all over the place. They are readily available for sale on-line too, see here, here, and here. In fact, a similar one is posted on every level of at least one parking garage in downtown Minneapolis. What does it mean to you? How about to the Rollerblade® brand?

For example, would you be “o.k.” skating in the vicinity of the sign wearing, say, K2® brand in-line skates, or perhaps, Nike® Bauer® in-line skates? Would the owner of the real estate who posted the sign agree? Would Nordica® agree, as the owner of the ROLLERBLADE® mark? Doubtful.

Similar misuses of the ROLLERBLADE® brand appear in city and township ordinances and in meeting minutes across the country. Some make “unlawful” the operation of a “skateboard or rollerblade” except on sidewalks. Others forbid “rollerblading (which is the same as inline skating).” Yet others seem to only forbid “rollerblading” when there is a “dog in tow.” Ah, right. Some progressive cities have had the foresight to forbid not only “rollerblading,” but “roller skating” too, closing the potential branding loophole defense, for us trademark types.

How does this happen? Seth Godin’s recent blog post “Where’s the Baxter?” may have some application here, perhaps with a little embellishment by yours truly. Mr. Godin correctly reminds us of the importance of creating a “name” for a new product, especially when “you make something remarkable,” or “its something that hasn’t been done before,” basically, when “you’ve created something worth talking about,” and it may disappoint others to learn when they like the name too, it “is already taken.” When something is “taken” in the naming context, we’re talking about brand names, not generic names. The former can be owned, the latter cannot. So, brand names seem to get the most attention prior to launching a revolutionary new product or service.

Getting much less attention, and deserving far more, is the need to create an acceptable generic name too, especially when the new product is truly “remarkable,” and appears headed for creating a new category. For example, had Rollerblade® adopted, embraced, and promoted “in-line skates” as the generic name for the category it “pioneered” in the early 1980s, it seems unlikely the misuses would be as prevalent as they are today. How do we know it didn’t take these early steps? Besides my imperfect consumer recollection from the decade of the 1980s, I rely on the clunky patent-like generic product description set forth in the original ROLLERBLADE® trademark registration (1985), covering “boots equipped with longitudinally aligned rollers used for skating and skiing.” Uh, not a very consumer-friendly sound-bite. As far as I can tell, it wasn’t until the close of the 1980s that the term “in-line skating” or “in-line skates” began to appear, at least, in Rollerblade® trademark filings, see the 1990 U.S. registration for TEAM ROLLERBLADE®. A decade is a lot of history to erase.

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I have now been reminded several times, in several places, that "FedEx Kinko's is now FedEx Office."  Does anyone else think that this is a huge mistake?  I understand that FedEx is a strong, national brand -- even a strong international brand at this point -- but Kinko's is arguably stronger.

This name change is no doubt the product of much study and corporate soul-searching, but as most marketing professionals know, there is an X factor of sorts in a name change that cannot be calculated through market studies and focus groups.  I'm sure I'm not the first to suggest something like this, but a good, strong, retail store brand should be run through something like the five second shouting-up-the-stairs, "Honey, I'm running to _______!" comprehension test.  "Honey, I'm running to Kinko's!" passes with flying colors.  "Honey, I'm running to FedEx Office!" doesn't--it doesn't roll off the tongue in quite the same way, and it is susceptible to an, "I thought you said you were going to the office," misunderstanding. 

Which brings up a trademark strength issue.  As applied to retail office service centers, "Kinko's" is arbitrary and therefore quite strong (according to Wikipedia, "Kinko" was the nickname of Kinko's founder Paul Orfalea).  In contrast, "Office" is largely descriptive as applied to those same services.  Moreover, FedEx is about to sacrifice a brand name with a longer history:  Kinko's dates to 1970, but FedEx started in 1984.  There is certainly an argument to be made that the FedEx brand can expand to occupy the space where Kinko's once stood, and I'm sure some accountant somewhere can show me a bunch of numbers explaining that killing off Kinko's is better for FedEx's bottom line, but it still seems like a marketing mis-step to me.

Here's an interesting sideline question for water cooler discussion:  Presuming that FedEx affirmatively abandons the Kinko's brand and trademark completely (and I do not know that it is doing so), at what point could a third party pick it up out of the virtual garbage can and start using it for competing services? 

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