Startup Company Names Make the First Brand Impression to Your Customers

Startups have begun to adopt quirkier and quirkier names in an effort to begin to build their brand right away.  What you may not know is that Yahoo and Google led the way.  Yahoo stands for "Yet Another Hierarchical Officious Oracle" and Google is a mis-spelling of googol the number with 100 zeroes after a one.  Then came Flickr and Tumblr.  Now the names are getting even wackier.  There's Mibblio, Kaggle, Shodogg, Zaarly, Spotify and a whole bevy of others. 

One reason for these types of names is that it helps branding and marketing.  There are several categories of marks with each category giving the trademark owner stronger or weaker protection.  Those categories from strongest to weakest are:  “arbitrary/fanciful,” “suggestive,” “descriptive,” or “generic.”  A coined phrase or made up word would be arbitrary/fanciful and provide the broadest protection because there are no other similar words like it.  A suggestive mark is one that suggests rather than describes a characteristic of the goods/services it represents.  For example, the trademark “Apple” for use with computer-related products would be suggestive.  A descriptive mark is one that merely describes the nature, quality, or character of the goods.  For example the mark “Red Fruit” when applied to an Apple Farm’s product would be descriptive. Generally, in order to obtain trademark protection for this type of trademark, the owner will need to prove that its mark has “acquired distinctiveness/secondary meaning.”  This means that the owner will have to show that consumers actually associate the descriptive mark with the owner’s goods/services and not view it as a description of the product. Finally, a generic term is the common name of a product.  It cannot serve as a trademark at all.  Some famous trademarks that have become the generic term for the product include “Thermos,” “Linoleum,” and “Escalator.” Thus, this trend by startups to create words puts these trademarks at the higher end of the trademark spectrum.  They also help avoid issues with trademark infringement with other companies. The more made up the name, the stronger the trademark.  As with any name or trademark, the object of the exercise is to be sure create a name or a trademark that conveys some meaning to the consumer. In addition, a good trademark should be memorable for the consumer.

Another reason is that these companies need a web address that is easy to remember and recognize. As you may imagine, most of the good or short ones are already registered.  It also helps to have shorter names to make it easier for potential customers to remember.  Commonly, the company will choose a mis-spelling of a word, mash two or more words together, or find some other way to come up with a name that is unique and still conveys a message to the consumer about that company's products or services.

Some companies will use an algorithm to create one word from two or more words. However, it is important to understand how the new name looks or sounds because in some cases the look, sound, orconnotation when actually read or spoken may be unfavorable. 

Overall, this can be a very good trend for strengthening a startup’s trademark.  I cannot tell you how many times my clients have clung to trademarks that were descriptive, rather than suggestive or arbitrary/fanciful which meant that those clients had to work harder to get consumers or potential consumers to associate their trademark with their goods/services.  One downside to this trend, though, is the promulgation of similar types of names.  For example, how many items came out with names that start with “i” after Apple came out with its “iPod” products? 

It is always important to pay attention to your brand and try to “get it right” the first time.  A company does not necessarily want to change its branding image mid-stream (a la go from Research In Motion or RIM to Blackberry). 

$ 675,000 for Downloading 30 Songs Illegally

The First Circuit upheld a $ 675,000 award against an individual who illegally downloaded thirty songs.  As you may know, the minimum amount of statutory damages allowed by the Copyright is $750 per infringement. The maximum is $30,000 per infringement. However, in the case of "willful" infringement, the Copyright Act provides for statutory damages "of not more than $ 150,000 per infringement. 
 

The lower court in the Sony BMG v. Tenenbaum case, awarded plaintiff $ 22,500 per infringement.  Mr. Tenenbaum appealed claiming that such an award was excessive, and therefore, violated his due process rights.  Arguing that the First Circuit should apply a punitive damages analysis to determine the propriety of the award, Tenenbaum sought a determination that the award was excessive.  The First Circuit declined to review the award under a punitive damages analysis.  Instead, it gave deference to the statutory damages set forth in the Copyright Act.  Using this analysis, the First Circuit, in order to find the award violated Tenenbaum's due process rights would have to find that the award was "so severe and oppressive as to be wholly [disproportionate] to the offense and obviously unreasonable."  The punitive damage analysis would have most likely yielded a favorable result for Tenenbaum. 

 

This begs the question, how is it that the award of $ 22,5000 per downloaded song is reasonable or not disproportionate to the offense?   According to the First Circuit, it thought that the purpose of the statutory damages was to discourage "wrongful conduct" and provide compensation for injury.  Undoubtedly, plaintiff will also seek to recover its attorneys' fees from Mr. Tenenbaum.  Thus, Mr. Tenenbaum's downloading of a couple of album's worth of music will probably cost him a pretty penny.   

Of course, the courts do not ever consider any mitigating factors.  For example, what if after downloading those 30 songs, Mr. Tenenbaum purchased 100 more from the same or similar artists which he would not have purchased had he not liked the thirty songs so much in the first place.  Or, whether Mr. Tenenbaum may have purchased the songs after downloading them?  (Most likely he did not, but what if?). 

While I am all for protection of one's intellectual property, including copyrights, it seems to me that the statutory damages provision of the Copyright Act leads to misuse and abuse.  This is especially true since a copyright registration is probably the easiest of the three (patents, trademarks, copyrights) to obtain.  Seems to me that the better approach to determining the statutory damage amount would be to run it through a punitive damage analysis.  That way, the courts may have greater flexibility in taking into account whether the infringer is a "career" or "professional" infringer or just someone like Mr. Tenenbaum.  

Until then, if you are downloading songs or other copyrighted material, do so from iTunes or Google Play (or other similar application, store, site) and only after paying for it. 

Electronic Arts Can Be Sued by Amateur Athletes

A while ago, I posted about litigation in the Northern District of California between college athletes and video game makers over the use of the athletes' likenesses in their games.  That case is now before the Ninth Circuit.

Well, the Third Circuit, just ruled that, Ryan Hart, a quarterback for Rutgers from 2002 to 2005, can maintain a lawsuit against Electronic Arts ("EA") for misappropriation of his likeness.  The Third Circuit reversed a lower court's ruling that the First Amendment (the Right to Free Speech) protected EA's depiction of amateur or college players in EA's video game. 

As you can expect, the whole purpose of EA's "NCAA Football" game is to make it as close to real life as possible.  In doing so, EA "copied" Mr. Hart's jersey number, height, weight, helmet visor, and other accessories worn by Mr. Hart during a game.  While this may make the game more interesting for the video game consumers, it was exactly why the Third Circuit found that the First Amendment did not protect EA from Mr. Hart's lawsuit.  According to the Third Circuit, EA had to show that it had somehow significantly "transformed" the identity of Mr. Hart.  In deciding against EA, the Third Circuit said that:  "[t]he digital Ryan Hart does what the actual Ryan Hart did while at Rutgers: he plays college football, in digital recreations of college football stadiums, filled with all the trappings of a college football game.  That is not transformative."

The Court in the Northern District of California agrees with the Third Circuit.  Now, the question is will the Ninth Circuit also agree? If not, then the Supreme Court may take up the issue at some point to resolve the circuit split.  As always, stay tuned for more.  

Kate Upton First Rejected by Victoria's Secret Upset That It Is Now Using Old Photos of Her

Apparently, a few years ago and prior to her becoming "famous," Kate Upton modeled some of Victoria's Secret's clothes.  At the time, Victoria's Secret decided not to use those photos because Victoria's Secret said that Ms. Upton's look was "too obvious."  According to the model booker for Victoria's Secret ("VS"), VS would not use her photos because she resembled "a footballer's wife, with too-blond hair and that kind of face that anyone with enough money can go out and buy."  Ouch!

Well, apparently VS had a change of heart because they used those very same photos in a recent catalog.  Hmmm? Anyone smell the tug of exploitation now that Ms. Upton has become more popular? So, apparently, when she is lesser known, she is not good enough for VS, but now that she is more popular, VS does not mind using photos of a "footballer's wife."

I would be willing to bet dollars to donuts that Ms. Upton is pretty much SOL with any claims against VS.  Usually, companies like VS will require models to sign a release giving up her rights to those photos and giving them to VS.  I cannot imagine that there would be terms in the contract that would provide Ms. Upton with any rights to those photos, but stay tuned. 

Right On Cue, the Supreme Court Recent Patent Ruling Proves My Point

By now, I am sure that you have read about the Supreme Court's recent ruling that DNA is not patentable.  As a teacher of intellectual property, one of the first things I teach with regard to patents is that matter occurring naturally are not patentable.  Yet, the United States Patent and Trademark Office issued a patent to Myriad Genetics, Inc. for certain genes.  Are you scratching your head trying to figure that out? Well, apparently, so was the Supreme Court and that is why that there is a huge need to revamp the patent application process. 

What I find most amazing about this case is that it actually had to reach the U.S. Supreme Court for a decision.  How can it be that an examining attorney can issue a patent for something that occurs naturally?  This is simply a prime example of how the system fails and why an overhaul is necessary.  Intellectual property is big business and costs hundreds of thousands, if not millions of dollars in research and development--not to mention litigation. 

Again, the purpose of intellectual property laws is to encourage creativity, not stifle it.  Allowing a company to have exclusive rights to a gene necessary for researching potential cures for cancer, or any other types of diseases (ailments) stifles inventiveness.  Let's hope that this ruling spurs some sort of re-tooling of the patent system. 

Patent Trolls Beware!!

One of the purposes behind intellectual property laws is to promote innovation, creativity and a company's good will.  In order to achieve this, intellectual property laws allow persons or entities to protect their intellectual property against misappropriation, misuse, or copying by others.  As with all good intentions, there will always be those who decide to "game" the  system for their own benefit.  See my recent posts regarding the now infamous, Prenda Law Firm.  As shown by the exploits of Prenda, there are copyright "trolls," as well as patent "trolls."  A patent troll is typically defined as an entity who purchases patents with no intention of supporting the development of technology or produce goods.  The main (or sole) purpose of purchasing the patents is to collect fees by way of settlement of threatened or actual litigation. 

Everyone, except for maybe the trolls, agrees that trolls are bad for businesses and intellectual property because they essentially extort money from businesses by filing lawsuits.  Patent litigation is probably one of the most expensive types of litigation around--and "generic" litigation is not cheap at all.  For a long time, there was a collective "what can you do?" feeling about patent trolls.  Even though, according to a study by the White House, patent defendants paid approximately $ 29 billion to troll-like plaintiffs in 2011 with a fraction of that amount being put back into research and development for new innovations or creations.  According to Santa Clara University Law Professor, Colleen Chen , about 61% of all patent lawsuits in 2012 were brought by troll-like plaintiffs.  While I admit that I am all for attorneys getting paid, it does make more sense for companies to use their resources towards further innovation rather than paying for frivolous intellectual property lawsuits. 

Now, the Obama administration appears ready to try to tackle the problem. Recently, the administration provided a plan by way of legislative proposals and executive actions to limit, if not eradicate, the patent troll.  For example, one proposal makes it easier for victorious defendants to collect their attorneys' fees for frivolous patent lawsuits.  Another proposal seeks to protect end users (who are the type of small-time victims preyed upon by Prenda Law Firm in the copyright context) from patent infringement litigation.  In my opinion, the biggest aspect of the administration's plan is to reform the way patents are issued.  Many of the patents used as swords by the trolls are not very well written and probably should never been issued in the first place.  For example, the patent office does not always issue a patent that describes the actual process by which the goal of the invention is reached.  Instead, it issues the patent for the goal (not the process).  Thus, these "goal" patents allow a patent troll to foreclose any other way to achieve that same goal, even if that alternate way is more inventive or different.  However, by requiring the patent to describe the process of achieving the goal, then other innovative types may avoid patent infringement claims by trolls by inventing another process of achieving the goal. 

Indeed, earlier in my career, I worked on a patent case where the patent was so vague and broad that the "owner" of the patent asserted it against several different types of technologies (including those that did not exist at the time the patent was issued) which were obviously not the point of the patent.  Many of the patent attorneys and experts working that case agreed that the patent was not very well written and was easily abused.

It is easy to see how the perfect storm of lax scrutiny of patents by the United States Patent and Trademark Office and those who seek to take advantage of that laxity created these trolls.  It is high time to banish the trolls to under the bridges where they belong.  Hopefully, these initiatives by the administration will help achieve some of its goal of eradicating patent trolls. 

Can Your Boss Read Your Work E-mail?

Okay, show of hands . . . how many of you use your work e-mail account for both business and personal communications?  That is what I thought, quite a few of you. Well, I would recommend that you be very careful to separate the two.  With so many free e-mail accounts available, sign up for one and use that for your personal stuff.

If you insist on using your work e-mail, then be mindful that your boss can monitor your communications--as long as they have a valid reason for doing so (i.e. no snooping for snooping's sake).  A boss may monitor e-mails with an employee's consent or, again, if there is a legitimate purpose for monitoring them in the ordinary course of business. Oftentimes, consent would be in a document you sign upon hiring or in the employee handbook.  Some legitimate business reasons include checking productivity, illegal use, or to avoid liability issues related to your communications "on behalf of" the company (by virtue of your use of the company's e-mail).  

You, as an employee, should review any your employer's e-mail policy.  Also, be careful about what you write or send.  In other words, use common sense about what you transmit using a company's e-mail address.  All too often, e-mail is a source of great consternation because people seem more at ease typing things that they would not say publicly.