Troy & Schwartz Attorneys-At-Law

Take Home Points

1. A distinctive registered trademark can become generic over time meaning it is no longer protectable as a registered mark. Such a mark can also be subject to cancellation.
2. Ceasing the opportunity to overcome negative press can alleviate bad press in the court of public opinion.

In 1978, the trademark TACO JOHN’S  was registered with the USPTO.  In 1989, the owner of the TACO JOHN’S mark received a registered mark for Taco Tuesday (Reg. No. 1572589).   In 2019, the current owner of both marks, Spicy Seasons, LLC, sent a cease-and-desist letter to Freedom Edge’s Brewery Co. for using the term “Taco Tuesdays” to advertise a taco truck that parks outside the brewery once a week.   Spicy Seasons had every right to do so as the owner of the registered mark, but Freedom Edge did not keep the matter private. Soon Facebook became the forum for litigating the matter in the court of public opinion via social media.

Then in March 2023, Taco Bell IP Holder, LLC, the owner of the TACO BELL mark and a competitor of Taco John’s restaurants, filed a petition with the Trademark Trial & Appeal Board (TTAB ) to cancel the Taco Tuesday mark on the grounds that the mark had become generic.  The cancellation petition is tongue-in-cheek and quite humorous.  For example, paragraph C under the Preface states: “The Registration potentially subjects Taco Bell and anyone else who wants to share tacos with the world to the possibility of legal action or angry letters if they say “Taco Tuesday” with express permission from the Registrant – simply for pursuing happiness on a Tuesday.  This violates an American idea: “the pursuit of happiness.”

Rather than participate in the cancellation proceeding, this month Spicy Seasons filed a Notice of Abandonment of the TACO TUESDAY mark with the TTAB, effectively ending the cancellation proceeding.  This business decision makes good sense for two reasons.  First, there was considerable negative press about Taco John’s “beating” up on small proprietors.  In doing so, Spicy Seasons seized on the opportunity to make amends in the arena of public opinion by announcing it was abandoning the mark and giving a substantial donation to Children of Restaurant Employees.  It also challenged Taco Bell to do likewise since they will not have to spend further legal fees on the cancellation proceeding.

Second and from a legal perspective, “TACO TUESDAY” has suffered from genericide because it has become too well known to still be identified with Taco John’s.  It is not unusual for an initial distinctive registered mark to become generic and lose its registered trademark status over time.   Two examples are:  DRY ICE (Originally a trademark of Dry Ice Corporation of America) and  ESCALATOR (Originally a trademark of Otis Elevator Company).   Once a mark becomes generic, it risks losing its ability to enforce its mark.  Not only has the term “Taco Tuesday” been used frequently across the country but the mark was also featured in the 2014 “The Lego Movie.”

Also note that the USPTO will not register a generic mark.   For example, a local store just calling itself “Boutique” for clothes would have no trademark rights to that identifier. The rationale for refusing the registration of generic marks is: since they describe common terminology for specific industries, generic terms are free to use by any brand owner in its development, marketing, promotion activities, etc.

In conclusion, Spicy Seasons chose to officially abandon its now-generic TACO TUESDAY mark.  Had  Spicy Seasons filed trademark infringement lawsuits, defendants could have sought cancellation of the mark by the court on generic grounds.

Waffle Wednesday anyone?

Have a question on obtaining a registered trademark nationally and/or internationally or enforcing your rights as a registered trademark owner? Contact us at 305-279-4740.  And check Susan’s reviews at www.avvo.com.  Be sure to check out our other trademark law blogs at www.troyandschwartzlaw.com.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

© 2023 by Troy & Schwartz, LLC

The blog provides a detailed analysis of the U.S. Supreme Court’s June 29, 2023 decision in Abitron Austria v. Hetronic International, a case which involves international trademark rights.   Justice Sotomayer’s concurrence, reading more like a dissent, is, in this commentator’s opinion, the correct legal application of the Lanham Act.

Quick Overview of Abitron’s Take Home Points:

1. More than ever before, trademark owners will likely need to protect their marks abroad by registering the mark in the countries in which the goods/services will be sold and/or even manufactured.
2. Contracts between U.S. companies and foreign parties need to clearly specify ownership and use of the relevant IP globally to clearly provide a contractual basis for trademark infringement liability related to conduct outside of the U.S.

Analysis

U.S. trademark law is governed by the Lanham Act (“Act”).  The Lanham Act was enacted at a time when international commerce was far less common than it is today. Sections 1114(1)(a) and 1125(a)(1) of the Act specify remedies for trademark infringement.  The former section pertains to situations when a person without the consent a trademark registrant uses in commerce a reproduction, counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offer for sale, distribution, or advertising of any goods or services or in connection of such use is likely to cause confusion, cause a mistake or deceive with a registered is used in commerce.  The latter section pertains to situations where any person, who on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device or any false designation of origin, false, or misleading description of fact or false or misleading representation of fact is likely to cause confusion, cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person as to the origin, sponsorship, or approval of his or her goods.

Registered marks are enforceable under the laws of the country in which they are registered.  As for infringement activities, neither of the above referenced Lanham Act sections define what is meant by “in commerce.”  That is, does “in commerce” pertain to infringing activities of a U.S. registered mark only in the United States for a U.S. registered mark? Or does it “in commerce” include commerce within foreign jurisdictions?

The underlying case involved Hetronic’s radio remote controls, which are used to operate heavy-duty construction equipment, such as cranes.  An agreement between Hetronic and Abitron allowed Abitron to make and sell Hetronic-branded products that contained genuine Hetronic parts. In 2015, Hetronic sued Abitron and its affiliates in Oklahoma federal court, alleging they breached the contracts by making and selling products with unauthorized parts.   The district court awarded Hetronic a permanent injunction blocking Abitron from further infringement worldwide.  The jury’s $96 million dollar award was upheld by the Tenth Circuit Court of Appeals even though Abitron had argued that 99.98% of its infringing sales happened abroad.

In affirming the district court, the appeals court found that a significant amount of Abitron’s foreign sales of the infringing products ended up in the U.S. and Hetronic provided evidence that these sales caused confusion among U.S. customers and “even Abitron Germany’s own U.S. distributor.”  In finding for Hetronic, the appellate court also stated that the fact that only a small percentage of Abitron’s products made it into the U.S. was irrelevant.  “Otherwise, billion-dollar-revenue companies could escape Lanham Act liability by claiming millions of dollars of their infringing products from entering the U.S. represented only a fraction of their sales.”  The opinion also emphasized that the Lanham Act applied because Abitron “diverted tens of millions of foreign sales from Hetronic that otherwise would have ultimately flowed into the U.S.”

Abitron appealed to SCOTUS arguing that the Lanham Act is not applicable when infringement occurs outside of the U.S. for a U.S. registered mark and does not cause likelihood of confusion within the U.S.  Arbitron again emphasized its “small” percentage of U.S. sales.

SCOTUS construed the “in commerce” references in Sections 1114(1)(a) and 1125(a)(1) as providing no express statement of [the Act’s] extraterritorial application beyond U.S. borders or any other clear indication that [the Act] is one of the ‘rare’ provisions that do apply abroad. Having found that the Lanham Act provisions are not extraterritorial, SCOTUS next determined whether Hetronic’s claims involved domestic (i.e., in the U.S.) conduct.  According to the majority, Arbitron’s use in commerce (i.e., conduct) was not in the U.S.  As such, there could be no likelihood of confusion in the U.S and the Tenth Circuit’s decision was thus vacated.

Justice Sotomayer’s concurring opinion argued that the analysis should actually include a two-pronged approach.  She agreed that there is no indication that the Lanham Act’s “in commerce” provision has an extraterritorial reach.  However, a “domestic application of the statute can implicate foreign conduct in prong two of the analysis so long as the plaintiff proves a likelihood of confusion domestically.”   She concluded that the case should be vacated not because of the majority’s reasoning but because the Tenth Circuit and the district court did not apply the proper two-prong test.  As she emphasized, for a plaintiff to prevail on the second prong of such an analysis, the plaintiff must offer proof of likelihood of confusion by U.S. consumers as a result of the defendant’s extraterritorial infringing activities.  The majority’s statement that such a test would open the floodgates for confusion by the lower courts in applying the Lanham Act is thus misplaced.  Instead, the majority’s conduct-focused test on remand is improper because that test “is not supported by either the Lanham Act or this Court’s traditional two-step extraterritoriality framework.”

In reaching its conclusion, the Court did not rely on its decades-old previous decision on the Lanham Act’s extraterritorial reach in Steele v. Bulova Watch Co. Inc., 344 U.S, 280 (1952). That case involved both domestic conduct by a U.S. citizen and the likelihood of domestic confusion.  The Steele case involved a San Antonio, Texas resident who purchased unfinished Bulova watches and took them to Mexico for finishing.  When he learned that Bulova had not registered its mark in Mexico, he obtained a Mexican trademark which was later cancelled by the Mexican trademark agency.  His watches, sold in Texas and Mexico, were of inferior quality.

The Steele Court held that, “[w]here as here, there can be no interference with the sovereignty of another nation (because the defendant no longer had a Mexico-registered trademark), the District Court, in exercising its equity powers, may command persons properly before it to cease or perform acts outside its territorial jurisdiction.”

The Supreme Court in Abitron noted that the Steele and Abitron cases involve a different set of facts; in Steele, the plaintiff’s “in commerce” conduct within the U.S. was clear.  Even so, unfortunately, the Abitron decision now seemingly immunizes all trademark infringement that originates abroad regardless of whether that infringement (“the conduct”) also causes adverse effects (a damaging result”) in the U.S.   The various circuit courts of appeal had relied on Steele v. Bulova to develop different tests for applying the Lanham Act extraterritorially.  Will these courts now need to reevaluate their tests in light of the Arbitron decision?

Moreover, the Arbitron decision arhttps://www.law.cornell.edu/uscode/text/15/1125guably misses the Lanham Act’s point: that the focus should be on whether consumer confusion (the result) ultimately occurs in the U.S., not whether the defendant’s use (the conduct) was abroad or domestic.  SCOTUS in essence has established a bright-line test, overturning over 60 years of jurisprudence from the various circuits since Steele.  If the defendant’s use in commerce occurs abroad, then no claim can seemingly now be made under Abitron.  Yet with our global economy, the possibility of extraterritorial infringement has increased dramatically including promoting the importation of counterfeit goods into the U.S.  Abitron, as a foreign infringer, may not have intended that its problematic goods ever end up in the U.S., but some did as the district court case found.

The Act’s Section 1125(b) does cover importation of imported counterfeit goods (goods marked or labeled in contravention of the provisions of Section 1125(b) wherein such goods are not to be imported into the U.S. and may be seized by customs and border patrol.  The port of Miami alone seizes millions of dollars of counterfeit goods on an annual basis.  Obviously, the manufacture of such goods is an extraterritorial activity.  But here, the Act clearly is intended to prevent a U.S. effect from happening in the first place.   Unfortunately, foreign counterfeiting of major U.S. brands continues to be a significant problem particularly in the areas of electronics, pharmaceuticals, and fashion.  The Arbitron opinion may well make it more difficult for U.S. companies to enforce their trademarks and stem the flow of counterfeit goods into the U.S. (which happened with Arbitron’s counterfeit products as the jury found) when such items make it past customs and border control.

Conclusions

After Abitron, trademark registration strategies even by smaller companies should consider the possibility of registration in appropriate foreign jurisdictions.  For example, had Hetronic had an Austrian registered mark or an EU registered mark, it would have had an action for trademark infringement in Austria or any EU member country where the infringement occurred.   Please also see the take home points presented at the beginning of this blog.  Contact Susan at 305-279-4740 for a complimentary consultation on international trademark registration strategy.  We liaise with law firms abroad to protect our clients rights on an international basis.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

© 2023 by Troy & Schwartz, LLC

Key Points: 

1. Product packaging and product design may qualify for trademark protection as trade dress. However, different sections of the Lanham Act apply.
2. Product packaging may be granted trademark registration under the Lanham Act on inherently distinctive grounds if the other requirements for trademark registration are met.
3. A product design may be granted trademark registration under Section 2f of the Lanham Act on the basis of widespread public recognition (i.e., acquired distinctiveness) over a period of years if the other requirements for trademark registration are met.
4. The Trademark Trial & Appeal Board held that the Guitar-Shaped hotel/casino qualifies for trademark protection as being inherently distinctive because it is akin to product packaging and the shape is unique in the “hotel and casino” services industry.

Discussion

Registered trademark protection is routinely sought for brand names,  logos, and slogans.  A less well-known but still powerful type of trademark protection involves trade dress.  The Lanham Act protects trade dress if it serves as the same-source identifying function as a trademark.   Trade dress is defined as the design and shape of the materials in which a product is packaged.  The design and shape of the product itself may also be considered a form of trade dress.

Depending upon the circumstances, trade dress may be granted trademark registration if it is inherently distinctive on its “face.”  Section 2f of the Lanham Act applies where a generally-not-protectable trademark has acquired trademark protection eligibility (secondary meaning) due to widespread public recognition of the mark as a brand and/or with the long and continuous use of the mark.

Those readers who live in South Florida or have visited the area have likely driven by or even visited the Seminole Tribe’s Hard Rock Hotel and Casino with its guitar-shaped facilities.  On May 25, 2023,  in In re Seminole Tribe of Florida, the Trademark Trial and Appeal Board (TTAB), in a precedential opinion, held that the Tribe’s three-dimensional building in the shape of a guitar (part of the Tribe’s Hardrock Casino and Hotel) is inherently distinctive.  The building’s shape is thus eligible for trademark registration for the Tribe’s casino services under international classification (IC) 41 and hotel, restaurant, and bar services under IC 43.   Application SN 87890892, available at www.uspto.gov, describes the mark as a “three-dimensional building in the shape of a guitar” and includes a black and white drawing.

In finding in favor of the Tribe, the TTAB relied on the U.S. Supreme Court’s decisions in Two Pesos, Inc. v. Taco Cabana, Inc. and Walmart Stores v. Samara Bros.  Both cases were trademark infringement lawsuits involving unregistered trade dress marks. Two Pesos involved an infringement lawsuit for the usage of Taco Cabana’s distinctive trade dress featuring the décor of a Mexican restaurant.   The Supreme Court held the “proof of secondary meaning is not required to prevail on a claim in an action for infringement of unregistered trade dress under § 43(a) of the Lanham Act where the trade dress at issue is inherently distinctive. . .”   Taco Cabano’s trade dress was found to be inherently distinctive and subject to protection as a common law trademark.

In Wal-mark Stores, the Supreme Court further clarified its trade dress jurisprudence by distinguishing “product design” trade dress from “product packaging” trade dress.  Here, Samara Brothers sued Wal-mart for selling knockoffs of the plaintiff’s garments, a line of spring and summer one-piece seersucker outfits featuring decorative appliques.   The Court found that the garments represented “product design” trade dress wherein a product’s design is distinctive, and therefore protectable, only upon a showing of secondary meaning.”  In reaching its decision, the Court distinguished the “product packaging” trade dress or “tertium quid” at issue in Two Pesos, from the “product design” trade dress at issue in Samara Bros.  The Samara Court further stated that the décor trade dress in Two Pesos is either product packaging, which is normally taken by the consumer to indicate origin, or some tertium quid that is akin to product packaging and has no bearing on the present case.

The distinction between product design and product packaging makes sense on the basis of trademark law’s consumer-focused purpose. As Justice Scalia stated in the Samara opinion:

It seems to us that [product] design, like color, is not inherently distinctive.  The attribution of inherent distinctiveness to certain categories of word marks and product packaging derives from the fact that the very purpose of encasing it in distinctive packaging, is most often to identify the source of the product.  Although the words and packaging can serve as subsidiary functions . . . their predominant function remains source identification.  Consumers are therefore predisposed to regard those symbols as indication of the producer, which is why such symbols “almost automatically tell a customer that they refer to a brand,” . . . and “immediately signal a brand or a product source. . . .”

In re The Seminal Tribe at 11 quoting Samara.

In finding for the Seminole Tribe, the TTAB held that the Guitar Design is akin to product packaging and inherently distinctive for the services specified in the application. The TTAB also emphasized that trademark eligible trade dress must be unique in the relevant industry, in this case the hotel and casino industries.  Here, the TTAB cited its 2015 decision in In re Frankish Enters. Ltd. which involved the trade dress of the “fanciful, prehistoric animal design” of the cab of monster truck exhibitions.  Finding that the monster design was akin to product packaging and therefore inherently distinctive, the Frankish Enters. Board also emphasized the uniqueness of the applicant’s monster truck design which was readily distinguishable from all other monster truck designs of record.   In re Seminole Tribe of Florida at 16.  Similarly, the uniqueness of the Guitar Design in the hotel and casino service industries makes it inherently distinctive on its face.

Side Note:  The examining attorney had approved registration of the guitar-shaped hotel under Section 2f but the Seminole Tribe sought registration on inherently distinctive grounds rather than on acquired distinctiveness grounds.  Either way, in this particular case, the distinctive shape of the hotel clearly made it eligible for both types of registration.  There may be some strategic legal reasons for seeking registration of  product-package trade dress involving an obviously inherently distinctive design even where 2f registration would be granted.  Trademark attorneys should discuss such strategies with the client since appeals do cost money.  In another May 2023 hotel trade dress case, the TTAB held that a rectangular-shaped hotel could not be registered even on 2f’s acquired distinctiveness grounds. .  In re Palaci Del Rio, Inc.  See application SN 88412764 for a drawing of the hotel.  A comparison between The Seminole Tribe’s guitar-shaped hotel and the rectangular-shaped hotel clearly demonstrates why the Seminole Tribe’s hotel was accorded protection as being inherently distinctive.

In conclusion, trade dress is another avenue for obtaining trademark protection and building brand recognition.  One thing to note, however, is that trademark registration will not be granted if the trade dress has an associated  functionality.   Click here for a blog on trade dress and functionality entitled “From Medical Test Tube Caps to Bourbon Bottles – Getting a Grip on Trademark Functionality.”

THANK YOU FOR YOUR INTEREST IN THIS BLOG. AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

Copyrighted 2023

Intellectual property law is a complex area of the law.  Contact us for a complimentary consultation on protecting your inventions, creative works, brands, and proprietary information through patents, copyrights, trademarks, trade dress, and trade secrets or our litigation services involving intellectual property disputes.   We represent both individuals and business entities.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Services Creed:  Conscientious, Rigorous, Energetic, Empathetic, and Diligent legal services. 

Introduction

Intellectual property assets (patents, copyrights, trade secrets, and trademarks) can be sold, assigned, or licensed by the IP’s owner.   For companies, IP ownership issues may arise where steps are not taken to ensure that any IP created by or developed by an employee or independent contractor will belong to the company or hiring party.   Such issues could have a devastating effect on the company under a variety of scenarios as discussed below.  As such, every employee of a company should be required to sign a confidentiality and IP assignment agreement as a condition for employment.  Such an agreement obligates the employee to keep confidential the proprietary information of the business, both during employment and after the employment ends.  The agreement also ensures that any inventions, ideas, creations, business plans, logos, brands, trade secrets, copyrightable works, or services developed within the scope of his/her employment during the term of employment belong to the company and not the employee.

Similarly, all independent contractors should be required to sign a confidentiality/non-disclosure agreement.  If their efforts on the company’s behalf could result in an IP asset(s), the independent contractor should also be required to sign an IP assignment of rights agreement.   Examples  of IP-related works often developed by independent contractors are: APPs, software programs, prototypes, formulations, websites and logos.

Of all the four types of IP, ownership issues involving copyrights are arguably the most misunderstood as the result of the copyright law’s work made for hire doctrine as defined in 17 U.S.C. § 101.

Copyright Ownership as the Result of a Work Made For Hire

Copyright law may seem deceptively simple compared to patent and trademark law especially with regards to the registration process.  Where copyright law can get particularly complicated for the unwary, however, is in the area of copyright ownership.  Under U.S. law, the creator or author of the work is the owner of the copyright.  But what happens if the work was created by and employee in the scope of his/her employment or by an independent contractor who was hired or commissioned to create the work?

Regarding an employer-employee relationship, the work is generally treated as a work made for hire wherein the employer (and not the employee) is deemed the author and owner of the work.  The forms for federal registration of a copyrightable work include a section addressing ownership secured on the basis of a work made for hire.

Regarding an independent contractor relationship, the work may qualify as a work made for hire providing two conditions are met pursuant to the Copyright Act (Act).  First, the work must fall into one of the nine enumerated types of works specified in the Act.  Second, the independent contractor and the hiring party must have also both signed an agreement agreeing that the work to be created is a work made for hire.  If both of these two requirements are met, the hiring party is deemed as the owner of the work created by the independent contractor.

Note the difference between works made for hire by an employee versus those made by an independent contractor.  In the latter case, the type of works qualifying as work made for hire are limited by statute and a written assignment agreement is required for all such “statutorily” defined works made for hire.

What happens if the work created by the independent contractor does not fall into one of the nine enumerated types of works in the Act?  An assignment of rights agreement executed by the independent contractor will be required for the hiring party to “honestly” claim copyright ownership as the claimant in a copyright registration application.

Why the Distinction Between and Employee and an Independent Contractor Is Important

Take the scenario of software developers who are often hired as independent contractors by startup companies.   Software can be copyrighted, but software is not one of the enumerated types of works qualifying as a work made for hire work by Independent Contractors.  Therefore, even with a written agreement stating that the software is a work made for hire, the hiring company will not actually own the copyright to the developed software under the Act even though the software developer (independent contractor) was paid to create the software.   That is, the software developer may well still be the owner of the software despite the work made for hire agreement.   On the other hand software development companies such as Microsoft Corporation that have employees dedicated to developing software are the owners/authors of any copyright-related rights in the software under the work made for hire doctrine.   See the U.S. Copyright Office Records for Microsoft Corporation’s registered copyrights where Microsoft is listed as the author of the work as the result of an employer work made for hire.

Copyright ownership issues as they relate to independent contractors may remain hidden and then arise: 1) when a business is being sold and the sale involves intellectual property (IP) assets such as copyrights; 2) in a copyright infringement lawsuit; 3) or a business is being evaluated by venture capitalists or other investors or is involved in an M&A transaction.    The buyer of IP assets will want assurance that the IP assets are indeed owned by the seller so that they may be effectively assigned to the buyer by a written instrument signed by the seller and the buyer.   A deal could fall through if the seller cannot prove to the buyer’s satisfaction that it – the seller – is the owner of the copyrights and therefore has the right to transfer ownership to the buyer.

As for a copyright infringement lawsuit, standing is a requirement for bringing a lawsuit, namely that the plaintiff is the true copyright owner.   A defendant in a copyright infringement lawsuit may be able to use “lack of ownership” as a defense if the work was created by an independent contractor and the work does not qualify as a work made for hire under the Copyright Act.  That is, ownership remains vested in the independent contractor and plaintiff does not own the copyright it claims is being infringed under the law.  The author of this blog has successfully used lack of ownership of the registered work as grounds for dismissing a copyright infringement lawsuit.

As for scenario #3, the buyer’s due diligence team will also be looking for these agreements with employees and/or independent contractors to ensure that the copyrights (and all of the company’s IP) is owned by the company.

Ensuring the Legally Sufficient Transfer of a Copyright by an Independent Contractor

What steps can be taken to ensure the proper transfer of copyright-related rights from an independent contractor?  Where the work(s) to be created clearly fall into one of the nine enumerated classifications specified within the copyright statute, the  hiring company should require the independent contractor to sign an agreement wherein the work(s) to be created is designated as a work made for hire with all associated copyright-related rights belonging to the hiring party.  This agreement should be executed by both the company and the independent contractor before work on the project commences.

Copyright ownership can also be transferred by an assignment of rights.  For her clients, the author includes an assignment of rights provision within all work made for hire agreements with independent contractors as a precaution to cover the situation where the created work may be found to not qualify as a work made for hire after all.  Thus, if for whatever reason the work should not qualify as a work made for hire because, e.g., it does not fall into one of the nine enumerated categories, the hiring party would still own the copyright as the result of the independent contractor’s assignment of rights to the hiring party.   17 U.S.C. § 201(d)(1).  Any such assignment needs to be clear as to the rights being conveyed and the nature of the underlying works.     For a good discussion of how important an assignment of rights provision may be where the work made for hire conveyance by an independent contractor fails, see Capital Concepts, Inc. v. Mountain Technology Corp., et al., WL 6761880 (W.D. Va. 2012).  In our software development example, the assignment agreement should also state that the independent contractor is assigning any and all patent and trade secret rights to the company since software may also qualify for these types of IP protection.  That is, the company/individual hiring an independent contractor needs to ensure that it is the owner of all potential IP rights emanating from the independent contractor’s work.

We are proud of the legal services we provide to our business and entrepreneurial clients on all matters related to intellectual property law including trademark law.  Contact us at 305-279-4740 to discuss any questions related to IP including ownership questions.   

Troy & Schwartz, LLC

Attorneys-at-Law

Miami, Florida  (305) 279-4740

Where Legal Meets Entrepreneurship™

This blog is for informational purposes only and does not constitute legal advice.

© 2023 by Troy & Schwartz, LLC

Selecting a company name or a name for a new product is no easy task.  Both types of names have the potential to become the company’s valuable intellectual property assets, i.e., valuable brands.  A haphazard name selection process, however, may result in legal problems and/or prevent registration of the name as a trademark or service mark with the United States Patent & Trademark Office.  Clearly the last thing a new startup needs is a legal dispute involving the alleged infringement by its product name or company name of someone else’s registered trademark.   Also, the “wrong” name may well prevent its registration as a trademark or service mark.  Registered marks generally have substantially more value than unregistered marks.

Anybody who has been involved in a lawsuit understands that they are costly, stressful, and can take on a life of their own.  A registered trademark owner may of course give you the chance to comply with an initial cease and desist letter.  However, the company’s compliance will generally require it to stop using the mark and transfer any domain name rights, etc.  The upshot?  The company will have to start over in the branding process.

The following tips are intended to get your company off and running with a viable company and/or product name.

1. Do a Google search on the name to see what other companies may already be using the same or a similar name.
2. Do a search of your state’s corporate or limited liability company records in the states where the company will do business to see if anyone is using the same or similar name. Also check the state’s registered trademark records since some companies do obtain state-registered marks.  For Florida, this information can be found here.
3. Do a search of the U.S. Patent & Trademark Office (USPTO) for federal trademark registrations of your proposed company/product name. Do not think that merely changing a letter in your proposed name or reversing the order words in a multi-word work will save you from a legal dispute with the owner of the registered mark or prevent trademark registration issues.  Clearly if you plan to file a trademark registration application for your company/product name with the USPTO, you should select a name that has a solid chance of meeting the USPTO’s trademark registration requirements.  This means that your mark must not be confusedly similar to a registered mark, generic, or merely descriptive of the goods or services provided under the mark.
4. Do a search of domain name registrar websites such as GoDaddy.com to see if the domain name you want is available. Not only are domain names a necessity in today’s e-commerce world, but domain names also may have associated trademark rights.  Therefore, a minor change in the registered domain name, e.g., by registering the plural form (ABCS) of the registered domain name (ABC) could result in a trademark dispute.   The registration of a dot com domain name in particular could signal potential trademark issues.
5. The best company/product name is one that is distinctive and memorable for both branding purposes and obtaining valuable registered trademark rights.
6. Come up with at least three names you like and get the reactions of trusted individuals.
7. If you plan to have a logo designed, ensure that there is a contract in place assigning all of the logo creator’s intellectual property rights to your company.
8. If you are a non-US company planning to expand into the United States, note that US trademark law will apply to you.  In the United States, common law trademark rights are recognized.  Additionally, trademark registration requires usage of the mark in interstate commerce at the time of registration.
9. Watch out for cultural implications involving your mark if you plan to register it in other countries.
10. Consult with an intellectual property law attorney up front to avoid costly problems.  A good attorney will discuss potential problems with your proposed names.   A thorough mark knockout search should also be considered.

We are proud of the legal services we provide to our business and entrepreneurial clients on all matters related to intellectual property law including trademark law.  Contact us at 305-279-4740 to discuss your questions on trademark law matters.   Doing things right the first time in selecting a company/product name and building your brand could save you some real legal headaches and a lot of money down the road.  

Troy & Schwartz, LLC

Attorneys-at-Law

Miami, Florida  (305) 279-4740

Where Legal Meets Entrepreneurship™

This blog is for informational purposes only and does not constitute legal advice.

© 2023 by Troy & Schwartz, LLC