Search results for: patent troll

Barring any unforeseen setbacks, Wall Street is aflutter as Thursday marks the latest in social media IPOs – Twitter…and we all remember how well Facebook’s IPO went.

Pricing for IPOs involves an assessment of the company’s assets (including its intellectual property portfolio), liabilities, and current and potential revenue.  As many of you savvy marketing folks know, Twitter makes its money primarily through paid advertising on the site (promoted tweets) and by licensing its users’ public data for analytics.  Because much of  users’ tweets relate to TV shows, Twitter is working on ways to correlate TV show Tweeters and TV ads shown during the show to further engage consumers – and charging big bucks for those as-yet-unproven opportunities.

Unlike many of its internet-era contemporaries (Apple, Google, Microsoft, Facebook, Yahoo!), Twitter has invested comparatively little in intellectual property assets.   It has 24 active federal trademark applications and registrations; comparatively, Facebook has 92.  And we have already discussed some of the genericide risks Twitter faces with its twittering tweeters.  Their amended S-1 filing says little about the value of the Twitter brand and trademark assets, but certainly these filings are often skewed towards investment risks.  Notably, Twitter’s filing does mention the genericide risk.

Despite being a leader among tech giants in the development of tools for consumer engagement through social media, Twitter owns 9 issued patents and among its contemporaries has a rather unorthodox view on patent rights. While much of the media has focused on the “patent war” trend, particularly in the wake of Samsung v. Apple, Twitter pledged in 2012 to only assert its patents defensively.  They implemented a novel Innovator’s Patent Agreement (“IPA”) – agreeing to only use its patents for technology developed by its engineers as a shield, and otherwise having to request permission from the inventor in order to use the patent as a sword.   It also makes the patent effectively undesirable to so-called patent trolls or “non-practicing entities” as it is intended to apply for the duration of the patent, so even Twitter’s successors or assigns would need the inventor’s permission to use the patent offensively (a solution that perhaps Congress should consider for America Invents Act 2.0).  However, as one risky example it mentioned in its S-1 filing, should an inventor move to a competitor that infringes on Twitter’s patents, Twitter may not be able to assert patent infringement against the competitor and thus will be limited in their ability to obtain certain damages by having to resort to other claims, such as a trade secret or violation of contract provisions on the former employee.

While some may consider Twitter’s IPA to be a “patentally conscious”* hipster position akin to using a cloth grocery bag at the store,  Twitter may now have to use its shield of patents.  Much like Facebook’s scuffle with Yahoo! just before its own IPO, Twitter this week admitted to facing a similar challenge from a tech gorilla.  As Wired reported on Monday, IBM has asserted that Twitter infringes some of its patents and seeks a negotiated settlement (read:  royalty fees for a license).   These patents include claimed inventions relating to a method of using of shortened URL links to retrieve webpages (U.S. Patent No. 6,957,224:);  a method of displaying advertising to a user (U.S. Patent No. 7,072,849);  and a method of generating a list of common contacts between users (U.S. Patent No. 7,099,862).  Twitter’s own patent portfolio includes an invention relating to prioritizing tweets and other messages and refreshing a scrollable list of content items.

Despite this news, at last check, Twitter’s IPO share price increased from $17-$20 to $23-$25.

What do you think about (a) Twitter’s revenue potential and/or (b) Twitter’s views on its IP assets? Are you buying on Thursday?

*Yes, I made that phrase up.

 

Those of us that work in the field of intellectual property law have gotten really familiar with a species known as trolls.   I’m not talking about mythical Norse creatures.  I’m talking about patent trolls, trademark trolls, and copyright trolls.  To the uninitiated, these various species of trolls are essentially people and companies that attempt to profit through intellectual property rights by acquiring them and exploiting them exclusively through litigation.  They do not create anything themselves.

In any event, it appears that Mississippi has itself a troll problem in the form of William Faulkner’s Estate.  The estate has apparently launched a number of lawsuits against companies that have, in various forms, made passing reference to Faulkner’s works in commercials and movies.  Two examples include: (1) a suit against Northrop Grumman and the Washington Post for a Fourth of July ad which lifted the Faulkner quote: “We must be free not because we claim freedom, but because we practice it”; and (2) a suit against Sony for a quote in the movie Midnight In Paris, “The past is not dead! Actually, it’s not even past.”

These suits appear to have been brought by Faulkner Literary Rights, LLC. The article linked previously seems to indicate that Faulkner’s daughter is the current owner of Faulkner Literary Rights, LLC.  Unfortunately, copyrights live well beyond the life of the author, so its common that heirs can simply exploit rights while simultaneously tarnishing the legacy of the original author.  Sadly, I think this is one of the biggest tragedies of our copyright system–and that’s saying something, given some of the ridiculous provisions in American copyright law.

The business partnership between Yahoo and Facebook is kaput.  Yahoo sued Facebook in the first major patent lawsuit in the social networking technology field earlier this month.  Yahoo alleged that the growth experienced by Facebook “has been based in large part on Facebook’s use of Yahoo’s patented technology.”  The case involved allegations related to ten patents and seeks injunctive relief and treble damages.

In an interesting turn, Facebook purchased 750 patents from IBM that related to software and networking.  How this purchase will affect the lawsuit is still unknown.  It may forge a settlement.  Has anyone heard of any recent instances where patents have been purchased to settle or avoid a lawsuit?

I recently read an article in Forbes magazine about a company that purchases patents as investments.  The company is called Intellectual Ventures—or IV for short.  It was founded by former Microsoft Chief Technology Officer Nathan Myhrvold.  The company has filed lawsuits against big companies alleging patent infringement based on the purchased patents.  These actions, according to Forbes magazine, have resulted in “a few pricey licensing deals.”  Ironically, it has been rumored that IV was initially set up at the behest of Bill Gates to help defend Microsoft against patent trolls.  It remains to be seen if the company could also be a place where parties in disputes could come to purchase patents to avoid lawsuits.

Toward the end of last week, a couple of friendly ironmongers (John Welch and Ron Coleman) had an interesting dialogue on Twitter, with some great insights about creativity and the law.

John noted that copyright’s requirement of “originality” is not the same as the requirement of “novelty” in patent law. Ron then weaved in some nice insights about creativity and trademark.

The heady discussion led me to rediscover a blog post of mine from more than nine years ago dubbed: The Paradox of Brand Protection: Knowing When to Hit the Consumer Over the Head.

If you can get past the congested text from this beginner’s first few weeks of blogging, it’s actually worth a complete read for the content, but for now, here’s an excerpt with some better spacing:

“I often remind branding professionals that trademark law rewards their creativity. Some seem to perk up with this subtle encouragement. After all, everyone likes to be rewarded, right? Well, one of the unobvious rewards for creativity comes in the prompt timing of when trademark ownership begins.

Being able to own and enjoy exclusive rights on “day one”—meaning, either the first day of use, or even before first use, upon the filing of a federal intent-to-use trademark application—is a big deal in the world of trademark and brand protection. In fact, timing can be everything.

Even a single day can be the difference between having the right to exclusivity and owning nothing at all (except perhaps, the losing end of a lawsuit and a pile of product and packaging ordered to be destroyed).

On the other hand, when rights are not available on day one, you may have an uncontrollable situation; one where competitors and others have an opening to copy or mimic before enforceable rights attach, and in some cases, these actions can make it difficult, if not impossible to obtain exclusive trademark rights at all.

So, the timing of when trademark rights are acquired is quite important, and those in the business of creating brands play an important role in when those rights may come to be.”

Those remarks aren’t ideally suited for the character limit in Twitter, but I’m thinking they reinforce Ron’s point that priority of trademark rights can be impacted by creativity/novelty.

As to my above remarks about federal intent-to-use trademark applications, I’m also mindful of this little dialogue shared with Ron a few years back, but nowhere near nine years ago.

So, the good news for the day is that the law, especially intellectual property law (copyright, patent, and trademark) does reward creativity, in a variety of ways, and each in their own way.

We’re looking forward to continuing this discussion, among many others, with those interested, at the upcoming Meet the Bloggers XIV unofficial INTA event near INTA in Seattle next month.

During the official portion of the INTA program, I’ll be reflecting on the impact of a creative legal theory that consumed lots and lots of lawyers’ hours (billable/non-billable) for a quarter century.

And, finally, let’s not forget about Duey’s little friend, right over here:

 

 

Nearly everyone in the IP community is talking about the hilarious viral Velcro music video released last week. Hat tip to Patently-O, Martha, and Brett. The “behind the scenes” video is here.

We’ve spoken before about nervous trademark types, behind the scenes doing their level best, and taking steps to try to avoid unwanted genericide of the trademarks they are charged to protect:

“Nervous, I say, because these types of advertisements frequently are designed to help prevent unwanted genericide of a trademark. The idea generally is, let’s show and create a record that we are educating the public about our trademark rights and hopefully deterring misuses that otherwise might find their way into the public eye and influence the relevant public’s understanding of a term or symbol as being generic and part of the public domain, free for anyone to use, even competitors.”

Velcro has been on our Genericide Watch list, and Wikipedia notes it is a trademark frequently used as a generic term. So, hats off to Velcro for letting their attorneys’ hairs down on this one.

And congrats to Penn Holderness and the rest of the WalkWest creative team, for helping give the impression in the Velcro video that at least some nervous lawyers can still have a sense of humor.

Julie Barry, Director of Global Brand, Velcro Companies, explained the Velcro video in this way:

“We’re here in North Carolina, shooting our ‘We are the World’ video which is an educational video explaining to folks details about the Velcro brand trademark and why it’s important that people refer to the mechanical fastener as ‘hook and loop.'”

Actors posing as lawyers, flanked by real Velcro lawyers, appear agitated at times, imploring listeners to not say Velcro, but instead “hook and loop,” or “our trademark will get killed,” “we’ll lose our circle ®,” and “our trademark goes away.” At the same time, Velcro is fully admitting the “First World” melodramatic nature of this worst case scenario and unfortunate situation.

Maybe it’s just me, but I’ve never heard of a “hook and loop” fastener before now, so the video certainly accomplished that bit of education. I’d be surprised, however, if the video moves folks to embrace the stiff and clunky six syllable “hook and loop fastener” generic phrase, over Velcro.

Perhaps what follows is one small example of where I’ve captured “at least some of the sparks” spinning from my mind’s eye, so please bear with me, but as I watched and listened to the Velcro video more times than I’d like to admit (kind of an addictive musical hook), the rapid repetition of “hook and loop” triggered thoughts of “hook and ladder,” then “chutes and ladders,” and how ladders can lead up to rewards while chutes can take you for a ride straight to the bottom:

Given those stark alternatives, given how a brand that deteriorates to the point that its primary meaning is perceived to be more generic than it is perceived a brand (is not a brand at all, under the law), and given a trademark owner’s understandable desire to try and influence and build up the primary brand meaning among the relevant consuming public, it’s worth asking whether the humorous Velcro video helps to move that critical needle. In other words, does it act as a ladder?

We’ve cautioned before that a brand designed to launch an entirely new category must also spend valuable time and effort in creating and donating to the public, an acceptable generic term that the public easily can embrace, so when the applicable patents expire and exclusivity is lost, the trademark doesn’t travel straight down the chute to genericness:

“Brand owners launching a new category of product or service do well to design a simple generic category name too.”

“Remember how it took Rollerblade an entire decade to come up with “in-line skates”?  Before that, the generic name it adopted at the USPTO was “boots equipped with longitudinally aligned rollers used for skating and skiing,” leading to a multitude of generic Rollerblading misuses.”

Is “hook and loop” going to get the job done? Will it help prevent a death by a thousand cuts?

“Hook and loop” is certainly more of a ladder, even a rescue “hook and ladder,” than the extreme generic identification of goods found in the first Velcro trademark application from 1957:

“NOTION-NAMELY, A SYNTHETIC MATERIAL SOLD IN RIBBON, SHEET, OR PIECE GOODS FORM, SAID MATERIAL HAVING COMPLEMENTAL PARTS WHICH ADHERE TO EACH OTHER WHEN PRESSED TOGETHER AND ADAPTED FOR USE AS A CLOSURE, FASTENER, OR BUTTON FOR CLOSING GARMENTS, CURTAINS, OR THE LIKE”

And, unlike Rollerblade who seriously delayed in donating a bite-size generic category term to the general public (“in-line skates”), Velcro seems to have been fully invested in “hook and loop” going all the way back to at least as early as 1975. Query whether the entry of the “hook and loop fastener” phrase closely tracks the lapsing of the patents (as the video mentions) “forty years ago.” If so, perhaps it still came twenty years too late?

Either way, I’m seriously wondering whether Velcro’s tongue-in-cheek reference to a “scratchy and hairy fastener” might be more easily and readily embraced by today’s general public as the generic alternative to genuine Velcro branded products.

I’m also left thinking that the video begs the question of who is the intended audience. In other words, who are the “folks” that Velcro would like to reach with this creative video?

I’ve always thought of Velcro as more of a B2B brand, but in researching this post, I see that I’ve missed some of their general consumer products, like general purpose straps, general purpose plastic bags, children’s toy blocks, adhesive cement, medical splints, and hair rollers, for example.

Contractual efforts are probably the most effective way of controlling how the Velcro trademark is used by those who purchase authentic product from Velcro and incorporate Velcro fasteners into their own consumer products. And, when it comes to competitors who might be inclined to misuse the Velcro trademark, the cease and desist letter, and/or lawsuit is probably most effective.

So, perhaps the general public is the intended audience of this educational effort. If so, I’m not sure the effort anticipated how many in the general public don’t like to be told what to say and do.

Moreover, let’s face it, the video’s referenced “trademark laws being broken,” aren’t being broken by the general public speaking about the brand or a competitor’s alternatives to the brand. Nor are they being broken by the media who reports and writes about all kinds of things and happens to use “velcro” in lower case and in a generic sense.

I do seriously hope the video will strike the right chord with these important audiences, as they will have a significant impact on whether the brand is able to climb the ladder of distinctiveness and fame or slides down the chute to genericness.

For those still with me and wondering, while I’ve questioned the seriousness of the risk for genericide when intentional and controlled brand-verbing is involved (and the 9th Circuit’s recent decision affirming the survival of the Google trademark appears to validate the difficulty of bringing a trademark all the way to the ground zero), the Velcro mark seems different, as the generic uses don’t involve verbing, they go straight to nouning and naming what the product is, by the way, a far more efficient name for a “hook and loop” or “scratchy and hairy” fastener.

Which of the present options are most likely to roll off the tongues of those who matter?

-Martha Engel, Attorney

Instagram recently released a new feature called Instagram Stories, which allows users to curate a collection of photos or videos of moments to share with friends for them to view, but then it disappears after a day.  The thing is Snapchat, a competing photo sharing app, already had a feature called Stories, which allows users to curate a collection of photos or videos of moments from the past day to share with friends for them to view.  Mashable has a nice post comparing the two features and identifying some of their differences.

So, can Instagram have Instagram Stories and call it that when Snapchat Stories already exists?

The answer, as it often is in the law, is “it depends.”

On the trademark side, neither Snapchat nor Instagram seems to have filed a trademark application for their respective Stories marks, with or without their house brand.  Notwithstanding that though, Snapchat has been using Stories since at least 2013 and would have prior trademark rights to STORIES over Instagram, which was just released this year.  However, they would only have those rights if STORIES actually functions as a trademark, rather than being a generic term.  A trademark can be generic if it becomes the common word or term used to identify a particular product or service regardless of source.  Examples of this include aspirin or elevator.   Trademark owners risk their trademarks becoming generic by their own improper use of the mark, like by using the mark as a noun rather than an adjective next to a generic term for a product (e.g. KLEENEX® tissues).  They can also become generic by failure to properly police the use of the mark by consumers or the media.

There could also be some issues for Instagram on the patent side.  Snapchat owns at least U.S. Patent No. 9,026,943, which has the following claim:

1. A computer implemented method, comprising:

allowing a user to access a user-controlled social network profile page with posts in a specified order;
permitting a user to traverse an interface element across the posts in the specified order to establish a set position for the interface element;
providing access to posts on a first side of the set position for the interface element to define a viewable profile; and
blocking access to posts on a second side of the set position for the interface element to define a non-viewable profile, wherein blocking access to posts includes blocking access to posts observed by social network members associated with the user, while the user has access to posts on the first side of the set position and the second side of the set position.
If Instagram’s Instagram Stories feature practices each and every element of this claim, it would infringe Snapchat’s patent, assuming of course that the patent is not somehow invalid – a defense that would certainly be brought by any alleged infringer.  It’s also possible that Instagram designed its Instagram Stories feature around claims of Snapchat’s portfolio, which may explain why the order of displaying friends’ posts to a user is different and other differences between the apps.
Instagram is owned by Facebook, which has a history of mimicking features of Snapchat in its applications as this article from 2014 discusses (see this 2016 update as well).  We’ll have to wait and see if this is the final chapter of this ongoing saga between social media app giants.

Medical marijuana is currently legal in 25 states, including four states that have also legalized recreational use (Alaska, Colorado, Oregon, and Washington). On Nov. 8, California voters will have a chance to make their state the next to legalize recreational use. As a dollar amount, Forbes estimated that Colorado’s marijuana industry was worth $1 billion. In light of these statistics, it is odd that marijuana is still considered a controlled substance and illegal under federal law. However, the Trademark Trial and Appeal Board issued a decision yesterday that reminds us of the odd conundrum that marijuana-related business owners find themselves.

The Lanham Act has long prohibited the registrations of trademarks in connection with illegal goods or services. The Lanham Act requires that that an applicant make “use in commerce” of the trademark in order to be eligible to receive a trademark registration. The Board and courts have interpreted the language to require “lawful use in commerce.” Consequently, if the use of a mark violates the law, the Trademark Office will likely refuse registration of the mark.

The applicant in the Board’s recent decision operates a retail marijuana store called “Herbal Access” in Washington State. As evidence of use, the applicant submitted a screenshot of its website and of its Facebook page, which included an image of the store. The application did not include a reference to marijuana, but instead identified the services as “retail services featuring herbs.” The Examining Attorney refused registration of the mark, concluding that the applicant was using the mark in connection with unlawful activity. The Examining Attorney reasoned that the term “herbs” was broad enough to include marijuana and, in any event, the applicant’s specimen and website confirmed that the applicant did in fact sell marijuana. The applicant appealed to the Board.

The Board affirmed the Examining Attorney’s decision to refuse registration (decision available here). While the “unlawful use” doctrine is not a new phenomenon, the Board addressed in some detail the applicant’s attempt to tiptoe around the use of the marijuana in the identification of services description. The Board first noted that it agreed with the Examining Attorney that “herbs” was broad enough to include marijuana, so the attempt to carve out illegal services failed.

However, the Board’s analysis is equivocal as to what would happen if the identification of services undeniably excluded illegal activities. The Board reaffirmed the principle that it must focus on the goods or services as identified in the application. However, the Board also reasoned that the Board should consider the services or goods that the applicant is actually selling. Yet the reference to this evidence is in the context of assisting the Trademark Office “to ascertain that the word ‘herbs’ in the description of services encompasses marijuana.”

Even if a federal registration is out of reach for marijuana business owners, there are alternatives. Each individual state has its own process for registering trademarks, usually modeled after federal law. Until Congress attempts to clarify the conflicting laws regarding the use of marijuana on a national level, the door to the U.S. Patent and Trademark Office will likely remain shut for marijuana activities.

 

-Martha Engel, Attorney

My home state of Minnesota prides itself primarily on three things:  our ability to withstand our winters, our 10,000 lakes, and our dearly beloved Prince.  While we take a beating when it comes to our sports teams, all of his purple life we had Prince.  Just like you might do for your neighbors, he opened his Paisley Park doors to any one of us to come hang out and dance until the wee hours of the morning.  Minnesotans kept a respectful distance from him and honored his desire for privacy, even though Paisley Park borders a well-traveled highway in the western suburbs.  Maybe it was just that we all knew we weren’t cool enough to talk to him, but honestly what would you even try talk to him about?!?   After I moved out of the state for college, Prince was often a symbolic rock when I was feeling a little homesick.   When my freshman year roommate decorated her side of the room with dozens of photos of my two least favorite things (Brett Favre in a Packers uniform and Dave Matthews) to mark her territory, I blared Prince from my side of the room.   When the Vikings “set a new mark for futility” and lost the NFC to the Packers, Chappelle’s True Hollywood Story skit about Prince aired.  My Wisconsin-born friends suddenly found being from ‘Sota to not be so pitiful.  “Where is Lake Minnetonka?”   “Did he really have parties like that?”  “Wait, he still does?!”

Prince’s death last week rocked Minnesota pretty hard.   That cool, funky vibe that emanated from his small 5’2″ frame felt noticeably absent in Minneapolis over the weekend.   His aura made you want him to drop some insane, sexy, humorous, wise, out of this world one-liner on you (pay attention heirs, I hope a desk calendar compilation of these is forthcoming).  As much as the world may have been surprised by stories coming out of Minnesota about our state’s relationship with him, I was equally surprised by the extent of all of the Prince tributes worldwide.   As the video from the SNL 40th anniversary party makes clear, even the cool people at the lunch table thought he was too cool for them.  When you grow up thinking of him as your neighbor who floats on purple smoke, threw great parties, and oh also happened to be a musical genius, I never really noticed the true extent of his international stardom.

While he was known for his privacy, he also was known to be strict about his copyrights in his works – probably even more so than Kanye West.  But…he did not have a will,  which means the ownership of his copyrights in his works will certainly be called into question.  The copyright term for an individual’s work is “the author’s life plus an additional 70 years.”   Assuming that he owns them personally, rather than as an asset of some corporate entity, that would give his heirs ownership rights in these works for another 70 years.  The ownership of the copyrights in his songs, and what “heirs” get to lay claim to them, is certainly going to be a hotly contested battle.

And then there are the trademark rights for a guy who once was only referred to by a symbol or The Artist Formerly Known As Prince.  Even before it was confirmed by a judge yesterday that Prince had no will, his trademark filings gave subtle hints that maybe his affairs were not fully in order.   All of the applications that I found appear to be owned by Paisley Park Enterprises.  The maintenance filing for his registration for PRINCE (registered after his Love Symbol period) for “entertainment services, namely, live musical and vocal performances by an individual” was not filed when due in 2004, so that registration was cancelled.  It was refiled in 2005 by a different firm, and again the maintenance filing was not timely filed and so that registration was cancelled in 2013.  It was refiled in October 2014 by yet another firm and just scheduled to publish two days ago.  Meanwhile, his iconic “Love Symbol” is handled by yet another firm — that seems to have even handled simple recent filings in paper filings, which is a rather unusual practice in the last few years due to a preference for electronic filings by the USPTO.  It makes you wonder what actually was going on behind the scenes here.

With one more verse to the Prince IP story, I need another piece of your ear.  You see not only was Prince a musical genius, he was also an inventor of this keyboard design and had a design patent for this, which expired a few years ago.

princeWho will end up owning Prince’s IP rights – and controlling his legacy – remains to be seen, but as I just overheard someone say while I  finished drafting this post “the people of Minnesota should own it.”

 

 

–Jason Voiovich, Chief Customer Officer, Logic PD

Who among you is surprised that Snoop Dogg was among the first to create his own marijuana brand? Or that the distinguished list of early entrants includes Willie Nelson and Melissa Etheridge? Like me, you are probably not shocked. Recreational marijuana is “legal” in four states. Medicinal use is permitted in over 30. And the change is happening fast.

For us advertising hacks, we’re nothing if not opportunists.

I’m not going to wade into the “should pot be legal” debate. But should pot be branded? Trademarked? Addressed by the FTC? Now that’s something I can put in my pipe and smoke!

Now, before you think you’ve stumbled across a munchie-fueled million dollar idea, there’s already a marketing agency launched to specialize in marijuana marketing programs. (And yes, I checked. And yes, Cannabrand is based in Denver. And no, I’m not shocked.) As tempted as I might be to make a joke about a group of stoners in the ad business (and wonder aloud if that’s any different than any other agency), this ad team seems quite sharp.

I wish Cannabrand the best of luck.

Branding marijuana faces a number of significant challenges. It’s got all the issues of the modern pharmaceutical industry, combined with the stigma of the “War on Drugs”, limited access to capital, and a nearly nonexistent corporate infrastructure. (I’d argue UAV/drone manufacturers face different issues, but the same underlying problem, but that’s a different story).

How challenging is it? Oh, my stoner friends, let me count the ways!

Let’s tackle the trademark issue first.

Marijuana remains a federally controlled substance. The US Patent and Trademark office isn’t going to play ball here and grant his Dogg-ness a trademark on his brand of buds. Might there be an angle for “smoking” paraphernalia? Perhaps, but it’s severely limiting. From what I understand (and legal guys, sound off below to correct me if I’m wrong), Mr. Dogg would have little recourse in federal court if another party used his name or likeness to market their brand. There’s a state agency angle to play here, but then there’s that whole “interstate commerce” issue. Like I said, complicated.

What about the Federal Trade Commission?

Most people forget that advertising speech is held to a higher standard than regular speech. Advertising speech must be true. That doesn’t mean it can’t show its subject in the most favorable light, but advertisers cannot make demonstrably false claims. As my friends in the pharma industry know, there’s a special circle in hell dedicated to complying with FTC guidelines on legal drug marketing. Many other industries have their own special hoops to jump through. Again, because marijuana is a controlled substance, there are no specific guidelines on truth in advertising. Suffice to say, once that day comes the industry will likely be subjected to the worst version of pharma’s rules, combined with alcohol’s rules, combined with tobacco’s rules, with a side of “don’t market this to kids” for good measure. I’ll reiterate: Complicated.

Complicated yes, but to me it is not all that interesting.

The real story is the challenge behind the cannabis branding strategy. Because of the tawdry image of marijuana, it hasn’t received rigorous mindshare from brand strategists. That is about to change. We’re not going to figure it all out here, but we can begin to apply some semblance of methodology that can help us understand the issues.

If we apply a basic segmentation analysis, three markets immediately emerge: Counterculture, Medicinal, and Transformational.

Cannabis Market #1: Counterculture

The Counterculture market is exactly what you think it is. It’s what you call a “made” market, meaning that the market already exists, is now opened to commerce, and brands are rushing to fill the void. This is the appeal of the Snoop Dogg, Willie Nelson and Melissa Etheridge celebrity endorsements. Recreational users will instantly recognize these brands as “credible” – it will take other non-celebrity brands time and money to catch up. The objective here is to grab market share quickly.

Cannabis Market #2: Medicinal

The Medicinal market also is pretty straightforward. Again, it is a “made” market, legal (at least to some degree) in a majority of the country. Brands competing here need to duke it out in the existing herbal supplement market with all of its challenges.

Cannabis Market #3: Transformational

If that’s where marijuana marketing and branding stops, it will be incredibly disappointing. The true opportunity is creating a transformational branding strategy. This is nothing less than rehabbing the image of marijuana after nearly a century of being labeled as a pariah. This is a “make” market, meaning there is tremendous risk (and corresponding reward) for whatever brand can convince the average person they should roll a joint with dinner. That the NCAA should allow a “Marijuana Bowl”. That you should be able to buy buds at Target.

sweetspotI think the trick there will be to dial back the “naughty factor” just enough. Not quite Snoop Dogg, but not Budweiser either. Noted psychologist Wilhelm Maximilian Wundt and his “Wundt Curve” model can help us here. If you look at it, it makes sense. Any target audience craves novelty, newness, and naughtiness – but not too much of any of those things. Too little and the brand is boring. Too much and it’s repellant. I’ve always thought of the Wundt Curve as the “Goldilocks Curve”. Cannabis needs to be just naughty enough!

Will it happen? Who knows. Until then, what can you do besides sit back, grab a bag of Doritos, and watch.

ShawBarrellThis isn’t the first time we’ve written about brand owners who shoot themselves in the foot with their advertising. And, I’m sure it won’t be the last.

As we’ve discussed before, touting the function of a product design feature can kill any hope of owning non-traditional trademark protection in that feature.

The latest example from the Trademark Trial and Appeal Board (TTAB) relates to a claimed mark consisting of “a three-dimensional configuration of external helical fluting around a gun barrel.”

Here, the TTAB seized on the brand owner’s website content touting function in this way:

“[T]he unique appearance of our Helical Fluting provides the discriminating shooter with a barrel that not only looks great but is up to thirty percent more rigid than a similar barrel with Straight Fluting. Helical fluting provides additional surface area for improved cooling, improved barrel harmonics, and helps counteract rotational torque, giving the shooter greater shot consistency.”

While there was much discussion and debate about whether the Applicant’s utility patent actually disclosed the claimed trademark feature (when present, no trademark protection is possible), there was much discussion and debate about the presence of an arguably controlling design patent (normally considered totally consistent with non-traditional trademark protection), and there was much discussion and debate about the existence of other competing designs in the marketplace, from my perspective, it’s hard to explain away the Applicant’s own advertising:

“Applicant’s website clearly touts the utilitarian advantages of its rifle barrel configuration design (‘Helical fluting provides additional surface area for improved cooling, improved barrel harmonics, and helps counter act rotational torque, giving the shooter greater shot consistency.’).”

“Applicant specifically claims on its website that its ‘patented helical fluting’ provides an improvement of ‘up to thirty percent rigidity versus straight fluting.’ Thus, while Applicant mentions a ‘unique appearance’ to the fluting in the same passage on its website, it also clearly claims the same specific utilitarian advantages identified in the patent, i.e., more rigid, lighter, improved cooling, etc.”

In the end, the TTAB pointed both barrels at Applicant’s trademark claim, finding functionality, and affirming the USPTO Examining Attorney’s refusal to register the claimed “external helical fluting around a gun barrel” trademark:

“[B]ased on all of the record evidence, we find Applicant’s proposed rifle barrel configuration mark is principally dictated by utilitarian concerns. With respect to the Morton-Norwich factors in particular, Applicant owns a utility patent demonstrating and claiming the utilitarian purposes of its fluted design; Applicant extols these same virtues in its advertisements; and Applicant’s design is considered superior to other barrel fluting designs. With these findings and viewing the record in its entirety, we conclude the proposed rifle barrel configuration mark comprises matter that, as a whole, ‘is essential to the use or purpose of the article or … affects the cost or quality of the article,’ as contemplated by Inwood, and thus is functional and not registrable on that basis.”

So, pointing to a “unique appearance” or saying it “looks great” won’t save the day, when what follows is fatal in terms of functionality. This fatal flaw is a bit reminiscent of the Bawls energy drink example we wrote about a while back, where the collection of bumps on the bottle not only “looks cool,” but is also there to provide a “non-slip-grip.”

It is also reminiscent of Toyota’s front “spindle” grille, self-explained as a “dashing visual feature,” but then also like this: “Its trapezoid-like shape assists the flow of air into the engine room.”

The gun barrel case serves as another good reminder of the importance of having your favorite trademark type review ad copy and website content before going live.

Bottom line, if you want to forever own a design feature as a trademark, treat it like one.