Duets Blog : Creativity and the Law: DuetsBlog

With all the good that the Internet can bring for a company, a lot of bad is also lurking out there.  A company could join the social media revolution and capitalize on attracting new customers only to have their new customers' identities stolen in a cyber attack.  Or, a more likely scenario for most companies, the good intentioned company finds itself in a lawsuit for doing nothing more than starting a conversation and engaging its customers.

Well, have no fear for the Digital Millennium Copyright Act ("DMCA") is here.   The DMCA exempts on-line service providers that meet the criteria set forth in the safe harbor provisions from claims of copyright infringement made against them that result from the conduct of their customers. These safe harbor provisions are designed to shelter service providers from the infringing activities of their customers. If a service provider qualifies for the safe harbor exemption, only the individual infringing customer is liable for monetary damages; the service provider's network through which they engaged in the alleged activities is not liable.

It is important to note, though, that the DMCA does not protect against all types of infringement.  For example, it does not protect against trademark infringement.  Therefore, it is important to have well drafted Terms and Conditions of Use Agreements that govern the use of your Web site. 

So jump on the bandwagon and start those social media Web sites.

There are laws and ways to limited your liability for the acts of others using your Web site.  As for the organized cyber attacks, it's probably best to leave that to Google and the U.S. government for the time being.

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Social media has become the must-have tool for every marketer and this tool is gaining popularity with every industry. For example, the insurance industry is typically known for more low-key advertising and marketing channels. However, companies like HCC Medical Services, LLC and Blue Cross Blue Shield have jumped on the social media band wagon. HCC Medical Services has redesigned its Web site to include a social media tool and a blog, and Blue Cross Blue Shield actively appears on Twitter and Facebook.

Social media allows nontraditional marketing innovators to get in front of an entirely new set of customers as well as a younger demographic. It can be difficult to measure the results of social media, but the fact that companies can attract followers on Twitter or fans on Facebook is impressive. On the other hand, sometimes the impact of social media is more clear. Some followers or fans will comment that the social media was a factor in their decision to purchase services or goods from the company. Additionally, some posts will comment on what the company is doing well and what it can improve.

However, to succeed with social media, companies need to have a plan for their social media tool. It is not enough to just be visible. Companies need to actively engage their followers and fans rather than use social media as a means to issue press releases.

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Friendster, the pioneer of social networking, was recently acquired by the Malaysian company MOL Global Pte, which is an affiliate of MOL AccessPortal Berhad, a company that operates and develops payment systems in Asia, for $1.8 billion. I assume at this price the return on investment was pretty nice for the founders of Friendster, but the price for Friendster reveals much more. The use of social networking as a marketing tool continues to grow and so does its importance.

More and more companies are developing or using social networking Web sites to connect with their customers to create brand loyalty and otherwise connect with their customers. For example, Kodak published Social Media Tips to help any business integrate social networking into their marketing plans. Some companies have created social networking Web sites for specific products. And it’s important for companies to consider developing social networking Web sites because it has become the norm for consumers to consult some form of social media before purchasing any product or service. 

But why should a company develop its own social networking Web site? For starters, control. As the owner of the Web site, you control the content and overall image the Web site conveys to consumers. A company does not want to exercise too much control over the content because it is important to create a space where consumers are free to speak, but some control is necessary to comply with certain legal protections afforded to Web site owners like the Digital Millennium Copyright Act and the Communications Decency Act. 

Additionally, the development and maintenance of a Web site can be inexpensive. However, do net let the low price tag trick you into believing development of a Web site is simple. There are a host of legal issues that can trip up even the most sophisticated business. And because there are many companies that provide marketing automation software products and services, it is important to be aware of the legal issues facing both the software developer and end users so that the two can form the most productive relationship.

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Yesterday, Under Consideration's Brand New Blog discussed the redesign of the Nickelodeon trademark. Nickelodeon has decided to drop the well known splat design that encapsulated the NICKELODEON term. As reported by Under Consideration, Nickelodeon’s “splat” has existed in one form or another for over 15 years. Although the orange “splat” has evolved over the years, it was a recognizable symbol of a Nickelodeon product. 

This leads to an important issue, designs are important branding tools. Trademark law argues that the words are the most dominant portion of a trademark because it is the element that consumers use to ask for the goods or services. However, this is not always true. Often times, the word portion of a mark is subordinate to the design component and consumers rely on the design or other matter to identify the source of the goods or services. Good examples include the Nike swoosh or the Under Armour “UA” design. But a design or non-traditional trademark does not need to reach the status of Nike of Under Armour to have a significant market affect. A good example is Christian Louboutin women's shoes. Most people do not know the brand of any women’s shoe at first blush, but most people recognize the red sole. Well, Christian Louboutin has federally registered the red sole of these shoes. Therefore, it is important not to overlook or discount the branding power a design can have and it is worth considering the highest level of protection for this element of a trademark.

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Yellow Book USA, Inc. has embarked on a marketing campaign telling consumers to “Yellowbook  It” when they need to search for something.  Although Yellow Book USA, Inc. does not own a federal registration for YELLOWBOOK, its does use the ™ symbol behind the term on its Web site to signal to consumers that it is a trademark.  From a marketing perspective, having consumers use your trademark as the term to signify searching a directory certainly increases the visibility of the brand.  On the other hand, from a trademark perspective, when consumers start using a trademark to identify to a specific thing or action, it signals the end of all trademark rights.

The function of a mark is to identify and distinguish the goods or services of one seller from those sold by another seller.  A “generic” term does not identify and distinguish goods or services.  A mark may be generic for one product but not for another.  For example, APPLE is generic for the fruit of the apple tree, but not for computers, and CATERPILLAR is generic for the larva of a butterfly, but not for earth moving equipment.  Furthermore, a mark may become generic if the owner fails to properly enforce its rights in the mark or educate the public on the proper way to use its mark.  This occurrence is known as genericide and DuetsBlog has discussed this phenomenon before.  Therefore, because generic matter does not identify and distinguish goods or services, it possesses no distinctiveness and falls on the unprotectable side of the spectrum of distinctiveness.

Yellow Book USA, Inc.’s strategy is reminiscent of the issue Google faced.  However, Google did not embrace consumers referring to searching the Internet as “Google it.”  Rather, Google aggressively went the other way educating consumers on the proper use of its trademark.  Today, Google has included trademark use guidelines on its Web site, which include the following rule: “Use a generic term following the trademark, for example: GOOGLE search engine, Google search, GOOGLE web search.”

Therefore, while Google and other companies are trying to avoid genericide, Yellow Book USA, Inc. seems content with running full speed towards it.  I assume they are aware of the risk they are taking, at least I hope so.

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The importance of logos in branding has been discussed in detail. Although words are generally thought of as the most dominant portion of a trademark because they are spoken by consumers, the logos themselves convey equally powerful and important messages. Which is why this element in the overall branding strategy should be cleared by trademark counsel prior to investing significant sums of money in promoting the trademark.

Recently, Under Consideration’s Brand New Blog featured the rebrand of Suramericana, an insurance company. Suramericana’s old logo was a recognizable picture of a bird and its new logo is a very modern depiction of a bird. One commentator said about the new logo “[a]m I the only one seeing the Sprint logo in the ‘wing’?” Sprint Communication Company L.P. is the owner of a federal registration for a design that the United States Patent and Trademark Office classifies as “wings, birds’.” The Suramericana new logo does look an awful lot like an upside down version of the Sprint logo.

While Suramericana probably does not have to worry about receiving a nasty letter from Sprint over its logo because insurance and telecommunication services are unrelated, this situation presents and important point.  A trademark clearance search should be done on all elements of the trademark even those elements that do not immediately stand out as something that deserves a search. Assuming the services were related, Suramericana could have found itself in a position where it would have to repeat its rebranding effort. The upfront investment in trademark searches is generally worth the money given the peace of mind a search can provide.

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Under Consideration's Brand New Blog has on two recent occasions commented about the trend in using white as the color for product packaging of consumable goods. Wal-Mart was the first to use this color packaging for its private label brand and the European community appears to be following suit. Using a white background has its marketing appeal, but consumers are unlikely to rely on the color white to distinguish between two different consumable goods. Additionally, it is unlikely that the user of a white background will be able to obtain a federal trademark registration for this color. However, product packaging backgrounds can be another way for companies to distinguish their products from their competitors, and it is possible to obtain a federal trademark registration for the product packaging background.

Background designs can be registered as trademarks even if they are to an extent ornamental and aesthetically pleasing. The key is whether a background design creates a commercial impression separate and apart from the other elements that appear on the product packaging. If the background design creates a separate commercial impression, it can be registered as a trademark. In fact, a background design can be inherently distinctive. In other words, consumers can immediately rely on the background design to distinguish between two sources of goods.

Unless business reasons dictate using an ordinary background, why waste an opportunity to connect with your consumer. Therefore, keep in mind that the background design of your product packaging can function as a trademark and help you further distinguish your goods from those of your competitors.

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Is one of the more common questions asked to trademark attorneys. And the answer is, registering the stylization of your mark is a good way to expand the scope of protection for your mark.

Under Consideration’s Brand New Blog recently commented on the new design of the Sunny Delight logo to Sunny D. Two commentators said “I feel like a Fanta now” and “[i]t reminds me of Snapple's brand for some reason - maybe it is the ‘S’ . . . .” While these comments do not necessarily demonstrate actual confusion between Sunny D and Fanta or Snapple, they do raise an important issue; namely, confusion as to source, sponsorship, affiliation, or endorsement can occur from the stylization of terms even when the terms are different.

A federal registration for the standard character form of a term extends protection in the mark to all stylizations of the specific term only. But as the Sunny D comments show us, a similar stylization for different terms can also cause problems for trademark owners. Therefore, if you create a unique, stylization for the terms in your mark, consider seeking a federal registration for both the standard character and stylized form for the terms in the mark.

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Under Consideration's Brand New Blog has recently commented on a couple marks that incorporate acronyms for what appear to be otherwise merely descriptive phrases. For example, the mark FPO (For Print Only) used in connection with a blog concerning the production of printed projects immediately conveys information about the nature of the blog. And LB Little, Brown and Company where Little and Brown could be two individuals’ surnames; thus, immediately conveying information about the individuals and not necessarily perceived by the public as an identification of source for the goods or services.

Acronyms, on the other hand, may not be merely descriptive because consumers have to pause and think how the acronym relates to the goods or services on which the acronym is used. Registration of an acronym on the Principal Register allows the trademark owner to get broader rights in a phrase that might otherwise have to be registered on the Supplemental Register. These broader rights provide security to the eventual registration of the full phrase because the acronym can be asserted against other confusingly similar full phrase marks used in connection with related goods or services. Additionally, the acronym provides support for the eventual registration of the full phrase. 

So, if a marketing plan includes the use of a phrase that is likely to be considered merely descriptive of the goods or services, consider incorporating an acronym into the mark. The acronym may provide the protection necessary to smoothly register the full phrase.

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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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