Sunday, February 26, 2012

Chinese Company Owns iPad Trademark

In another twist in China's continuing unabashed intellectual property infringement, a Chinese company has registered the trademark "iPad" in China.  Its registration allowed it to have authorities seize the ubiquitous tablet from store shelves in Northern China.  The Chinese company is Proview Technology.

Apple is fairly aggressive in protecting its intellectual property--it has chased Samsung with patent infringement lawsuits all over the world.  Unsurprisingly, Apple filed suit in a Chinese court to reclaim its iPad name.  The Court rejected Apple's lawsuit.  According to Proview, Apple did not follow Chinese law, and therefore, it is confident in its ability to succeed in the numerous lawsuits Proview filed against Apple over the name.  Proview has filed the lawsuits all over China.

Apparently, Proview registered the iPad name in several Asian countries, Mexico, and in Europe as early as 2000.  Proview, a Taiwanese company that primarily manufactures  flat screen displays, sought to launch its own tablet under the name.  The launch proved unsuccessful and it owes creditors several hundred million dollars. Not to mention that Proview's chairman filed for bankruptcy. This means that Proview is looking to make money with these seizures.  Apple is enjoying world-wide growth in the tablet area.  Thus, it is a perfect target for a company like Proview to use the Chinese courts to extort settlement payments from Apple.  At least, that is my guess as to what Proview is doing. 

Given the value of the iPad name to Apple, Apple may have no choice but to acquiesce to Proview.  In fact, apparently believing in the strength of its position, Proview sued in a California state court accusing Apple of forming an company in England for the purpose of registering the "iPad" name for Apple.  Proview claims that such conduct by Apple is fraud based on Proview's allegation that the London company sought to purchase (not license) the "iPad" name from Proview.  Proview believes that the London company should have disclosed the fact that it was seeking the name for Apple or that the name would be used for a tablet computer.  Notably, this lawsuit is not framed as one involving trademark infringement.  It is definitely creative and keeps the matter out of Federal Court.

Clearly, Proview is seeking to get Apple to pay it ot settle these lawsuits. 

Monday, February 20, 2012

Chinese Consumers Are Losing Their Appetite for Fakes

As I blogged earlier regarding counterfeit wines, Chinese consumers, especially upwardly mobile ones, are consuming higher end goods.  Well, a recent article in the Wall Street Journal reports that some Chinese consumers are losing their appetite for fake or counterfeit items.  This is news given that the Chinese have been the headliners for intellectual property theft for quite some time.  Indeed, many a blog post on this particular blog discusses the rampant piracy and counterfeiting occurring in China.

According to the article, there is shift in tastes from the widely popular and available counterfeit goods to authentic goods.  The article, surprisingly to this author, states that 95% of women between the ages of 28 and 35 express that they would be embarrassed to carry counterfeit handbags.  What is surprising is that counterfeits seem to be a way of life for the Chinese, and therefore, consumers caring about authenticity of goods seems to be a non sequitur.  They manufacture most of the top goods (see Apple), and therefore, are able to obtain important information about those products in order to replicate them with much cheaper materials.  So, counterfeits seemed to be (and is) a part of the Chinese culture.  Nevertheless, as China's economic power grows, so does their taste for authentic goods.

This can be very good news for American companies because it opens another substantial market for their authentic goods and may lead to a change in attitude towards intellectual property by China.  Okay, that last part may be a pipe dream right now, but a girl can dream can't she?  The Wall Street article says that the change in attitudes by the Chinese consumers is encouraging American companies to expand into that market.  Of course, those companies should make such expansion cautiously given China's recent and immediate past with intellectual property.

Of course, given China's counterfeiting past, these companies would do well to make sure that they put into place a method or system for allowing consumers to differentiate between authentic and counterfeit.

Thursday, February 16, 2012

Who Owns a Twitter Account? The Employer or the Employee?

An employee starts a Twitter account on behalf of himself and his employer.  The Twitter account bears the name of the employee and the employer.  Over the years that the employee is employed at the company, the Twitter account takes off and he amasses several thousand follows.  When the employee quits, who gets to keep the Twitter account???

Well, there is currently pending a lawsuit in California over essentially these facts.  Noah Kravitz a former employee of which sells phones and manages a blog is the defendant in a legal battle over the Twitter account.  According to PhoneDog the Twitter account is a customer list, and therefore, is its intellectual property--namely, its trade secret.  As PhoneDog sees it, it invested the costs and resources in growing its fans and followers on social media.  This, so the argument goes, further builds PhoneDog's brand awareness.

So, who's account is it? Well, of course the answer is not clear.  Apparently, the dispute hinges on whether Mr. Kravitz opened the account for his benefit or that of his employer at the time, PhoneDog.  The facts are not clear cut, and that is probably why this has ended up in our court system rather than being resolved earlier.  Mr. Kravitz claims that he opened the account, linked it to his personal e-mail, and made both personal and professional tweets.  Shockingly, PhoneDog has no "Twitter Policy" to address this question.  PhoneDog has, by way of its pleadings, made these questions more pertinent than the ultimate question: can followers of a Twitter account be a trade secret?

For those of you who have read some of my earlier postings, you should recall that in order to qualify as a trade secret information must: (1) have value in being a secret to both the holder of the secret and its competitors and (2) subject to reasonable efforts to maintain the secrecy of the information.  Clearly, the list of followers is not a "secret" because they are easily determined. Indeed, PhoneDog appears to understand this point when it claims in its complaint that the password to the account is the "secret."

It is also hard to see how the password to the account containing the customer list is the actual trade secret.  Ultimately, this will be a very expensive lesson to PhoneDog.  I suspect that PhoneDog has or will shortly develop a policy regarding social media and/or put a clause regarding it in their employment agreements.  Such a policy will most likely set out who owns which accounts and make sure that employees use the company's social media accounts for company business.  Every small business should learn from PhoneDog's mistakes.  With technology advancing, it is imperative that companies seek to review the new technology and try to anticipate any issues that may arise from the company's or an employee's use of the new technology.  Then, the company should work to use policies and contracts to avoid the pitfall that that ensnared PhoneDog.

Saturday, February 11, 2012

In-N-Out Burger Copied in China

As if the Chinese counterfeiters were bad enough, a company should also protect themselves against employees and former employees.  Apparently, some former employees took the concept from In-N-Out Burger to Shanghai, China.  With the Chinese showing an affinity for McDonalds Big Macs and Burger King Whoppers, some former employees of the Irvine-based In-N-Out thought they would try their hand at bringing In-N-Out to China.  The problem was that they did it without the blessing of In-N-Out and copied In-N-Out's trademarks and trade dress (and may have taken some trade secrets).

This is just another reminder that a company should protect itself against intellectual property theft by its current and former employees.  Depending on the company's size and intellectual property, the ways to protect against such theft varies.  Usually, it will start with an intellectual property audit (see earlier post) and result in building an intellectual property plan tailored to your company. 

Monday, February 6, 2012

Speaking of the Super Bowl and Branding . . .

In 2016, the NFL's big game will be its 50th.  If the NFL maintains its use of Roman numerals to denote the number, then that Super Bowl will be Super Bowl "L."  Yes, "L" as in "Loser" or the "L-word."  Not a connotation that the macho NFL will necessarily want.  It is not like it is the sexy Super Bowl "XXX" of 1996 or the suggestive Super Bowl "LIX" of 2025.  According to a recent Wall Street Journal article, the NFL is already starting to think about the unfortunate use of "L" for its 2016 game.  My prior post makes clear that the NFL takes its "Super Bowl [insert Roman numeral]" brand very seriously.

The NFL has a few years to come up with a solution.  Will it abandon the Roman numerals for that year? Will it embrace the "L" in a manner similar to the way that World Wrestling Entertainment did after losing a trademark action to the World Wildlife Fund?  After losing, WWE (previously known as "WWF") ran advertisements saying: "Get the 'F" Out" as a way to embrace the change from "WWF" to "WWE."  A good example of making lemonade out of lemons, in my opinion.  Will it try to utilize the "L" with something else (e.g. the location of the game)?  Will it try to give the "L" a different association than the current one? 

With the NFL's astronomical popularity and television ratings, its decision with regard to the 50th Super Bowl will have an impact on its viewers.  I can't wait to see what the NFL does with this one.

Saturday, February 4, 2012

Aggressive Trademark Policing Can Expand Your Protection and is Like Winning the "Super Bowl"

A while ago, a friend of a friend asked me for some advice regarding a cease and desist letter their organization received from the owner of the trademark "Iron Man" (World Triathlon Organization).  Their organization held team races which used the term "Iron Man" descriptively (i.e. to denote that the race would not include any substitutions, so that each person on the team had to "iron man" the race).  Not surprisingly, when I looked into this matter, it was easy to see that the trademark owner was using its superior resources (it is a big company) and stable of high-paid attorneys to shut down anyone from using the term whether it was in a trademark sense or not. The trademark owner went after every person/entity trying to use the term for their goods or services despite the goods and services having no relation to those promoted by WTO.  In one instance, WTO challenged the use of "Iron Man" in association with scientific measuring instruments causing the registrant to abandon its application.  Not sure how measuring instruments can be confused with triathlon-related activities, but clearly WTO does not want anyone to use "Iron Man."

My advice to this small organization was to just give up using the term because litigation would financially ruin the organization and there was no doubt that World Triathlon Organization ("WTO") had the resources to see the litigation out to its conclusion.  While legally, there was a strong argument that the small organization was not doing anything wrong, testing that theory would undoubtedly take years and hundreds of thousands of dollars in litigation costs.
Remember, trademarks are supposed to identify source and not confuse consumers, but not to take words or phrases out of the lexicon.  That is to say, a person should be able to use a term to describe a product even if the term is the trademark of another (e.g. I am wearing Nike shoes).  As long as the person or entity is not inferring that it is a sponsor or affiliate of the trademark owner, then from a strictly legal sense that should be okay.

Unfortunately, some companies, like the owner of "Iron Man" aggressively fire off cease and desist letters, oppose trademark registrations, or file lawsuits to those using their trademarked name legitimately.  The most recent example of this is the NFL's aggressiveness in not allowing those not authorized by the NFL to use the term "Super Bowl."  Look at the advertisements from companies not from "official sponsors" of the event, they will advertise deals for the "big game" or "super" savings, but will not use the term "Super Bowl."  That is because the NFL polices any such use and has the means to drive many of the smaller entities out of business with litigation, or make life miserable for the bigger companies who'd rather spend their money on promotions or building their business and not litigation.

As a trademark attorney, I advocate strongly for my clients to ensure that their rights are protected.  But, on the other side sometimes legality should give way to reality so that my clients can continue to grow their businesses.