The Search

A trademark search is a critical part of protecting your trademark rights.  By searching various databases of trademarks, you’ll know in advance whether someone else has already tried to register your mark (or a mark that’s similar enough to be a problem for you).  If you know these things in advance, you can save yourself a ton of heartache and expense.  Rarely a month goes by when I’m not contacted by a business owner who has made the very depressing and disruptive discovery that a trademark they’ve been using for months or years has a senior user in another state or jurisdiction.  Legal fights of any kind are never cheap or easy and avoiding them by doing your due diligence up front is always worth the cost.

There are several different levels of trademark searching that can be done.  The more thorough your search, the better.  A very common way to do searching is by using a professional search firm that will assign a search expert to your mark, formulate a complicated series of queries on multiple different databases (e.g., federal trademarks, state trademarks, common law trademarks, domain names, industry news databases, etc.), and then organize the search results according to how similar they are to your desired mark.  Searches of this type generally start around $600 for the search alone.  You should also assume that an attorney will need to carefully review the results and then offer you advice on what they mean in terms of the risks you’d be assuming by moving forward with use and registration of your trademark.  All told, a thorough search of this sort is likely to cost between $1,000 and $2,000 depending on the mark and the number of different products/services that you want to use the mark with.

There are also less thorough and, correspondingly, less expensive search options.  In particular, there are private, commercial trademark databases that include both federal and state trademarks and that can be searched for a fee of around $150.  You would typically want your attorney to do the searching of this type because they are familiar with the way the database query structures work and the way you’d want them to be constructed in order to get the best results.  Generally, the total cost of searching in this manner is around $500 – $700.

The Trademark Application

Filing an application for federal registration of a trademark is a relatively straight forward process — if you know what you’re doing.  Many a trademark applicant has fallen prey to the many different options available when filing a trademark application: Do you want to make a standard character claim or use a special form drawing?  What international classes of goods and services do your goods and services fall under?  Should you apply in your own name or some other entity?  Should you file an Intent-to-Use or Actual Use application and what are the benefits of each?  These are only a few of the many questions you must be prepared to answer when you file a trademark application.  If you make an error, your application will receive a refusal called an Office Action from the US Patent and Trademark Office and you’ll likely need to hire an attorney at that point to correct any errors made in the initial application.

The long story short is that a seasoned trademark attorney knows how to answer all of the questions you’ll be confronted with when filing a trademark application.  Given the right expertise, all the requisite information can be gathered, compiled, and then drafted into an application in relatively little time.  There is a very good reason that trademark attorneys exist and it’s the same reason that auto mechanics exist — you can pay a trained mechanic to fix your car in an hour or two, or you can try and study manuals for hours and hours and then try your hand and hope for the best (and then pay a mechanic even more to fix the damage you’ve done).  Prudent business owners will always trust their valuable business assets to a professional.

So, what’s the bottom line?  To file a single class (i.e., covering one “type” of good or service) in the United States, you should expect to pay somewhere between $1,000 and $2,000, inclusive of the official government fee and the requisite time of an attorney to prepare an file the application.  Many law firms, including mine, offer a fixed fee arrangement that will cover all the necessary work to file the application for a set cost.  This type of arrangement can help you to budget your expenses, but may not always be the best choice in every circumstance.  You should definitely discuss your particular situation with an expert attorney to see what the best arrangement would be for you.

Prosecuting the Application

Filing a trademark application is an important step, but ultimately not the only one required to register a trademark.  Once a trademark application has been filed with the US Patent and Trademark Office, it will be reviewed by an Examining Attorney.  Most of the time, the Examining Attorney will object to some portion or another of the application.  Examples of issues that might be raised are potential conflicts with previously registered trademarks, allegations that a trademark is merely descriptive (i.e., it doesn’t function as a trademark because it’s just a description of the goods or services with which it is used), claims that the description of goods or services is too broad, and any number of hundreds of other objections.  Responding to these objections can be very complicated and an understanding of the relevant trademark law is often necessary.  Suffice it to say, an attorney should almost always be employed to respond to an Office Action.

Beyond Office Actions, there may be other procedural hurdles to achieving registration of your mark.  For example, if you filed on an Intent-to-Use basis, you would then need to prove that you’ve begun using your trademark.  Once the Examining Attorney has completed reviewing your application, it is approved for a publication period.  During that period, third parties may oppose the registration of your mark by filing a Notice of Opposition.  When this happens, you need to negotiate with the opposing party and either work out a settlement or proceed with the opposition process, which works much like, and can cost as much as, a federal litigation.

As you can see, there are many things that might go awry during prosecution of a trademark application.  It could also be the case that the application sails through the process with flying colors and little to no intervention is needed from an attorney.  Usually, however, at least some issues are raised during the process and some back-and-forth between your attorney and the US Patent and Trademark Office is necessary.  Because of the large amount of variance possible, it’s very hard to estimate costs of prosecuting a trademark.  A good ballpark, however, for an average U.S. trademark application, assuming no significant difficulties, is around $1,000 to $3,000 for the prosecution of the application (this is on top of the above-referenced costs to search for and file the trademark application).

Summary

For those who’ve never had a trademark registered before, the foregoing should give you a fairly good sense of the costs involved.  As with any legal matter, lots of things can happen to make costs greater or smaller than the “average.”  Finding an attorney whose expertise you are comfortable with and who is a good communicator will go a long way in helping you achieve sanity in your legal budgeting.

The cost of a single US trademark registration is only one small piece of the puzzle when considering how to protect the intellectual property of a growing business.  Trademark portfolio development, foreign protection, copyright, and patent protection are a handful of some of the other considerations you will face as a successful entrepreneur.  Nevertheless, a first trademark application is always a good starting point and the more information you have on the process, the better off you will be.

In short, the dispute at hand arises from Upper Deck’s printing and distribution of baseball cards showing players photographed in their MLB uniforms, absent any license from MLB Properties to do so.  Upper Deck does have a license to use players’ likenesses from the MLB Player’s Association, and it does not use MLB trademarks other than display of action photographs from MLB games.

A host of interesting trademark issues are raised by the dispute, and certainly both parties have a great deal to lose or gain with the results of the suit.  Beckett Magazine, a popular collector’s publication, has been closely following the case on their blog.  Beckett has also published some of my commentary on the case, and I’ll likely be working on something a bit more in depth as well.  For those wishing to view court documents directly, Justia is hosting most of them.

We will continue to update the Legal Guide and we hope it will long be the first and best resource for information on legal issues of interest iPhone app developers.  Please note that you may freely distribute the PDF version of the Guide, so long as no alterations are made to it.

Sections included in the guide are:

• Choosing an application name
• Reading and understanding the iPhone Developer terms and conditions
• Using third party services or materials in your app
• Using push notifications or in-app purchasing
• What are your terms and conditions?
• Protecting your copyrights
• Patents for apps?

As surely as the phases of the moon change, I see some post in the blogosphere about a joker who is trying to “trademark”* a common industry term.  Fear not, good friends, there is little to worry about in such cases.  I’ll attempt to explain why.

First of all, simply applying for a trademark means very little unless the application actually proceed to registration.  And, in 99% of the cases where the joker applicant in questions is attempting to usurp some common industry term, there will never be a registration granted.

For the most part, trademarks in the United States (and, indeed, in most other countries) apply only to those goods and services with which they are used.  There is an exception to this rule for trademarks like FORD and GOOGLE that have achieve what in trademark law to called “fame,” and owners of those marks may prevent others from using them on goods and services unrelated to their own offerings.  But this famousness exception clearly has nothing to do with some fool trying to get a trademark registration for a common industry term.

When a trademark applicant applies for registration of a trademark, they must specify what goods and services are (or will be) used in connection with the mark.  If the trademark (or part of it) has some significance in relation to the industry in which the goods or services are offered, or the goods or services themselves, the applicant is typically asked to state that significance.  When the trademark (or part of it) has some meaning in relation to the goods or services and the meaning is descriptive in nature, then the trademark cannot be protected under U.S. law.

Seeing how this works in action, someone may very well wish to use the term SEO as a brand name for baked goods.  In that case, the term SEO has no relation whatsoever to the goods offered, so the trademark would not be rejected for descriptiveness.  Someone applying for registration of the mark SEO in connection with services that are clearly related to advertising generally and search engine optimization in particular, has got some problems on their hands.  It doesn’t matter one bit of the applicant claims (whether true or not) that the term SEO as they use it stands for something else — that is completely irrelevant.  The only question is whether consumers in the relevant industry would recognize the term in question and, if so, then does the term as recognized describe some aspect of the relevant goods or services identified in the application?

In the case of an application to register the mark SEO for services clearly having everything to do with search engine optimization, there is little to no hope that a registration will be granted.  Further, playing games with the US Patent and Trademark Office by arguing that you mean something else when you use the acronym SEO, even though it is obvious that your services are directly related to search engine optimization, is not going to win you any favors.

Lastly, I’ll also add that any discussion over who the first person was to coin the acronym SEO is moot.  Trademarks are not like copyrights or patents — being first to “coin” a phrase means nothing.  You have to use a trademark in connection with goods or services, in a non-descriptive way, in order to obtain rights in the trademark.  When some term becomes a widely known concept in a particular industry, the cat is essentially out of the bag — nobody will ever really be able to hold trademark rights in that term, within the relevant industry, because nobody within that industry would ever see the phrase and think it was a trademark rather than the term having a recognized meaning.  There’s still that possibility of SEO brand apple pies, however.

*For those of you who still use “trademark” as a verb, I’ll do my part on behalf of all trademark attorneys and tell you to stop doing so.  One does not “trademark” something.  One uses a trademark and thereby accrues trademark rights.  Often times, when people say that someone is trying to “trademark” something, they tend to mean that someone is trying to prevent everyone else from using that term in any way whatsoever — this is actually not possible under the law.  One can try to register a trademark, but that is a very different thing.

The best and most critical message from the story, and from any tale of a trademark dispute, is:

“For a company like this, the brand name is pretty much everything,” he said. “We don’t have an invention that’s ours that we sell to people. All we’re selling is the name of the company.”

I would add that even if you have a great invention and the patents to go with it, your brand name and the reputation it garners is likely to be one of the most important, if not the most important, assets of your business.  This is more easily comprehended if you think of all the customer service, marketing, support, networking, and business development that goes into creating an association in your customers’ and potential customers’ minds between your business and quality of product or service that you deliver — all of this is wrapped up in your trademark and would largely have to be rebuilt if you were forced to change it.

To be sure, trademarks are more important to certain kinds of businesses than others.  Any business that sells a product or service to a retail customer base, where purchase price is small and decisions are made relatively quickly, ought to be especially careful about trademark selection and protection.  But any company that would like to avoid getting the news that they’ll have to change their name or their product’s name should spend the time and effort in clearing and protecting their marks from the get go.

Given the popularity of the iPhone app store and the still-exploding growth of development activity around it, we thought it would be useful for developers to get a sense of some of the legal pitfalls to avoid in creating a new app.

The iPhone Developer Legal Guide is available for download here.

This week, news of LaRussa’s withdrawal of his lawsuit has been made public.  This, before any real activity in the case was undertaken.  LaRussa’s camp claims that his objective of having the offending account removed was accomplished and, accordingly, the lawsuit was no longer necessary.  Critics say that the lawsuit was never meritorious and was withdrawn before having to spend time and money substantiating the claims.

For observers who have their own online businesses that allow user comments or other content, this lawsuit is a good reminder of a few things.  One is that there is, on the books at least, a fairly good set of protections for publishers of user data that may run afoul of the law.  As mentioned above, the CDA (Section 230) provides such protection for non-IP claims.  For copyright related claims, the Digital Millenium Copyright Act provides its own safe harbor provisions that also employ a “notice and take down” procedure that requires publishers to respond to complaints received from content owners.  However, despite these protections, third parties certainly may threaten and even file lawsuits against online publishers of user content.

For publishers of user content, the potential risks are many.  The best advice is to foster a community that is unwelcoming of illegal activity of any kind.  Beyond this, a site’s terms and conditions should certainly allow for summary termination of accounts for any illicit or even “ojbectionable” activities, as defined by the site owner.  If and when a threat does come, experienced legal counsel should be relied on for determining whether a claim is baseless or solid, and quick actions should be taken, if necessary.

Terms and conditions for websites have an interesting but short history. Such things were not commonly needed until use of the web became popular among average consumers in roughly the first half of the 1990s. Further, things did not get particularly tricky for drafters of such terms and conditions until the appearance of highly dynamic web services. Users began contributing data as a major feature of sites, and, ultimately, just about every kind of commerce or social activity transpiring in the real world could be found online. As things stand now, the terms and conditions of a website might ultimately be the single most important legal document that a company has drafted — certainly could be strongly argued for user generated content sites such as Flickr or YouTube, and by extension Facebook, which offers many similar functions as those sites.

As terms and conditions have become more complicated and increasingly vital to the value structure of companies, another phenomenon has been simultaneously brewing: consumers are more informed and smarter about legal issues that effect them. From the by-the-second blogging of the now infamous SCO/Linux lawsuits at Groklaw.com to the rise of the site that “broke” the Facebook Terms of Use story, Consumerist.com, it is very clear that consumer-facing legal documents face much higher scrutiny now than ever before.

From one perspective, the unnamed lawyer that drafted Facebook’s now defunct amendments was doing precisely the right thing — changing an agreement to give even greater rights to her client (i.e. Facebook). But the reality is that even if Facebook was within its legal rights to make the changes that it did (this point is up for debate, but we’ll give them the benefit of the doubt for the sake of argument), it was clearly not the right business move. So what was? And what is the right move for web services that may be drafting their first ever terms of use and expecting to utilize user generated content?

The answer for Facebook, or for any other web company, is not to simply weaken their terms of use to the point that no user would ever object. Rather, the answer is to craft terms of use that strike a reasonable balance between the broad rights a company would like to have if they were operating in a vacuum and the much more specific set of rights needed to actually operate a site on the day the terms of use are drafted. The idea, of course, is that the middle ground will safely protect the author company’s rights in view of projected expansion in scope, functionality, or business model. The key in drafting such a document is making sure that the terms writer has a very clear understanding of the business of the company , including the specific operation of the technology employed to conduct that business. An increasingly useful mantra that I try to instill in my clients is that the more their business model depends on content or activity of users to create value, then the more likely it is that those customers will read and try to understand your terms of use; accordingly, the more important it is that you draft terms with the expectation that it will receive and withstand such scrutiny.

A corollary to the foregoing is that changes made to terms of use mid-stream should be made with particular care. In the recent Facebook situation, what is most curious is that the land grab for rights would occur apparently without such concern. The attempts by Facebook to justify their changes by general platitudes along the lines of “we need these rights to operate” makes one wonder why they thought their old terms of use was so deficient. Alas, the protestations of Mark Zuckerberg that we simply ought to trust him did not pass the smell test, nor would similarly vague justifications be useful in justifying a company’s overbearing grant of rights to itself.

The lessons here are:

Take your website terms and conditions seriously, and recognize that they should be tailored to the specific operation and needs of your business. Slapping in the most egregious version you (or your lawyer) can find from some behemoth company’s website is probably going to cause headaches.

If you wish to change your terms and conditions in a material and adverse way (as respects your users), consider the messaging that will accompany such changes and be prepared to justify them — both you and your counsel should believe in the necessity of such changes. Assume that users will actually read your terms of use (and that they will do so with the assumption that you are trying to screw them).

Although not discussed in this article, privacy policies for websites taking in user data are also extremely important to get right. Many states, including Massachusetts, have rapidly evolving laws concerning the protection of personalized data, so keeping on top is not easy. Just like rights grants or other important provisions in a terms of use, privacy policies must be carefully drafted to ensure that everything you want or need to do is permitted, while avoiding the “land grab” approach of taking everything you can from your users.