Why Your Business Needs Trademarks: Protecting Your Intellectual Property

Ruth Binger

By Ruth Binger



registered trademarkAuthored by Ruth Binger with assistance from Sarah L. Ayers, contributor

Trademarks are a vital aspect of intellectual property, offering unique proprietary rights with several advantages. Unlike other forms of property, a brand or trademark can remain valuable indefinitely with proper care. In fact, trademarks tend to increase in value with use. They can be sold or licensed, making them reasonably liquid assets. Additionally, trademarks serve as powerful marketing shortcuts, influencing consumer purchasing decisions for a company’s goods or services.

However, there are misconceptions surrounding the protection trademarks provide. Incorporating, qualifying to do business, or reserving the business name with various Secretary of State offices provides limited brand name protection. The right to exclude others from using a similar name on goods and services is not automatically granted. Conduct a thorough trademark search of any new corporation or LLC name used to identify a product or service to determine the availability of a mark for your specific purposes and ensure the name does not infringe on another entity’s trademark.

Trademark registration is not mandatory to establish a protectable and exclusive right to a mark. Registered trademark remedies are injunctions and damages, but often the only remedy for an unregistered mark is an injunction. Under common law, trademark rights can be obtained within a specific geographic area of use. State trademark registration does not offer protection beyond these rights. Continue reading »

Investment Crowdfunding Will Be Legal But Will It Be an Improvement?

Corporate Law Practice Group

By Corporate Law Practice Group



In the JOBS Act adopted in April 2012, Congress required the Securities and Exchange Commission (“SEC”) to adopt rules legalizing (i.e., exempting from the requirement to register with the SEC) the offer and sale of securities by small business issuers (which cannot afford registered public offerings) using mass media, to-wit: the Internet, social media, etc. Historically, both state and federal exemptions required “privateness” and forbade “general solicitation.”

On October 30, 2015, the SEC, in a 686 page release, finally adopted rules (see pages 547-686) to allow investment crowdfunding (the use of mass media to make offers and sales to non-accredited investors, i.e., persons with less than $1 million net worth and incomes under $200,000 annually). The rules will become effective in April 2016.

Supporters argue that these rules simply bring the offering and sales of securities into the modern age of mass media and allow persons of limited means to participate in the great boom of entrepreneurship. Critics, on the other hand, point out that those are the very persons who are the least investment sophisticated and the most vulnerable to financial fraud.

What Was Available Before Investment Crowdfunding?

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Regulation Crowdfunding: Is It Right for You?

Corporate Law Practice Group

By Corporate Law Practice Group



To much ballyhoo, on October 30, 2015, the Securities and Exchange Commission (“SEC”) finally adopted rules to allow investment crowdfunding (which the SEC calls “Regulation Crowdfunding”). That is, it allows the use of mass media (Internet, etc.) (called “general solicitation”) to make offers and sales to non-accredited investors. Those are persons with less than $1 million net worth and annual incomes under $200,000. (Under present rules, general solicitation may be used only to solicit purchases from “accredited” investors.) The new rules will not become effective before April 2016.

“Regulation Crowdfunding”: A Method for True Investment Crowdfunding

Conceptually, allowance of general solicitation to solicit non-accredited investors is a sea change, in direct conflict with the basic investor protection philosophy of the SEC and state regulators since adoption of the Securities Act of 1933. The actual benefit of the new rules, however, is in some doubt. Continue reading »

Protecting Your Intellectual Property in a Wild World

Ruth Binger

By Ruth Binger



Your company is an “A” player and it has done everything right in the U.S. in protecting its intellectual property (“IP”). You have not just relied upon a “smile.” You’ve invented a unique product called Superstar® widget and it is not yet offered by your competitors. Vast amount of resources have been poured into the development of the Superstar widget. Prior to introducing the Superstar widget, you used due diligence and used the IP Awareness Assessment Tool on the U.S. Patent and Trademark Office website to identify what IP you have, if it has value, and if it can be protected under U.S. law.

Upon identifying your IP, the company retained capable attorneys who were successful in obtaining U.S. trademark registrations on the corporate name, non-functional design, and logo so customers could more easily identify the Superstar widget and its association with the company. Superstar widget packaging correctly evidences all registered trademarks.

You made a wise expenditure on patents and the company has received patents on the Superstar widget process. Further, copyright registrations with the U.S. Copyright Office have been obtained on your website, web video, and associated software and you are giving notice to the world of your ownership by using the appropriate symbol of “©2012 Company.” Continue reading »

SEC Finally Proposes Rules to Allow Crowdfunding

Corporate Law Practice Group

By Corporate Law Practice Group



Not quite ten months late, the Securities and Exchange Commission (SEC) on October 23, 2013 proposed rules to allow entrepreneurs and other small businesses to advertise investments in their companies on the Internet and in other general venues, and to allow persons other than wealthy investors to purchase those investments. Congress, in the JOBS Act signed by President Obama on April 5, 2013, had told the SEC to propose such rules by December 31, 2012. (In fairness, the SEC was faced with great pressures from numerous quarters, including the legislators themselves, concerning the content of the rules, which made that deadline impossible to meet.)

This type of investing, called “investment crowdfunding,” was illegal, and will remain illegal until the process of review, amendment and adoption of final rules is complete. The SEC has asked the public for comment on the proposed rules within 90 days. At least a few months of further processing after that 90 day period will be required before the rules are final. Continue reading »

False Economy: Why Saving a Few Dollars on Legal Fees Now Can Cost You Big Later

A. Thomas DeWoskin

By A. Thomas DeWoskin



 

 

  • You’re about to sign a lease for your company’s new premises. Should you have a lawyer review it, or save the money?
  • You’re about to sign an employment agreement with your new employer. Should you have a lawyer review it, or save the money?
  • You and your best friend are going to start a new business. Should you have a lawyer advise you, or get the forms off the internet and save the money?

Both in jest and with some seriousness, business people, especially entrepreneurs, tend to view lawyers skeptically. Their perception is that lawyers run up fees, make simple transactions complicated, and sometimes cause deals to fall apart completely with all of their questions.

This is a short-sighted view of how attorneys can help you and your business. Experienced business minds understand that lawyers, when properly used at the beginning of a transaction rather than later after problems have developed, can be problem avoiders. And a problem avoided can be big money saved.

In the lease situation above, for example, your lawyer would be sure that you signed the lease in such a way that only your company, not you personally, would be liable. She might negotiate a provision that you don’t pay any rent while the space is being readied for your occupancy or for reduced rent if the landlord doesn’t provide promised services. An experienced attorney has seen a lot of leases, and knows the traps they often contain.

Lawyers aren’t deal breakers. Their job is to point out the potential risks in a transaction so you, the client, can decide whether those risks are worth the potential benefits of proceeding. If the risk/reward ratio isn’t to your liking, then YOU break the deal. If the risk is acceptable, then you proceed. In either event, you have made the decision in an informed and practical manner. You are in control; your lawyer, like all of your professional service providers, works for you. Your attorney’s role is to provide advice, share wisdom and insight, and help you make the business decisions. Continue reading »

U.S. Supreme Court Backs Resellers in Physical Goods Copyright Case

Ruth Binger

By Ruth Binger



Suppose you plan to buy a large supply of Disney books from an overstocked Barnes & Noble retailer in Taiwan, and then offer your employees the opportunity to purchase the books at a deep discount as gifts for Christmas.  You reason that if the employees don’t buy up all of the books, you can always sell the remainder to a discount book chain or on the Internet.

You are approached by the human resources department manager and advised that Disney is very litigious about protecting its copyrights. Because your company is not an authorized seller for Disney products, the manager fears losing an infringement lawsuit.

Fortunately, your legal counsel is familiar with this issue. Upon learning that you intend to make the initial purchase from an authorized Disney retailer in Taiwan, counsel advises that your company is protected by the “First Sale” Doctrine of the Copyright Act.

And the U.S. Supreme Court agrees. In Kirtsaeng v. John Wiley & Sons, the Court held that a legally obtained copyrighted work can be imported into the U.S. and resold without permission from the copyright owner even if it was manufactured and sold overseas. The ruling applies to sale of physical, tangible works and not digital works that are licensed and not easily resold because of license agreements. The Court explained that in a complex and interconnected world, buyers, sellers, and retailers should be able to import and sell products without having to search out the copyright owner to determine if the U.S. copyright owner approves of the sale.

The facts are simple.  Kirtsaeng, a Thailand citizen, moved to the U.S. to study mathematics at Cornell University, and entered a Ph.D. program in mathematics at the University of Southern California. Continue reading »

10 Best Practices for Protecting Your Company’s Trade Secrets, Internet Access and Good Will

Ruth Binger

By Ruth Binger



The exponential growth of technology has created amazing efficiencies in how businesses operate. Such cost savings come with a cost and companies need to continuously adapt to the ever changing opportunities and vulnerabilities. In 2020, it is predicted that over 5 billion people will be using the Internet, and within the next decade 6 billion people will have a constant connection to the Internet. The growth of your business is inextricably combined with the growth of the Internet.

Below are 10 best practices for your businesses to consider as you move forward:

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Is This by Consent? Changes to Missouri Supreme Court Rule Affect Use of Non-party Subpoenas

David R. Bohm

By David R. Bohm



Part of a series on issues related to Manufacturers, Distributors and International Trade

A major change involving subpoenas to non-parties has hit the business world in the state of Missouri.

A new amendment to the Missouri Supreme Court Rules now requires non-party record custodians to physically appear at deposition to produce subpoenaed items, unless all parties to the litigation have agreed that the subpoenaed party may produce the items without appearing.

The amendment changes the prevailing practice where parties send out subpoenas to third parties with a letter explaining that they will be excused from appearing at deposition if they produce the requested items along with what is known as a business records affidavit.

Rule 57.09, as amended, now requires parties to first obtain consent from all other parties to the litigation before a subpoenaed witness may produce documents without attending the deposition. This agreement must be communicated to the witness in writing. Absent this agreement, a witness must appear to produce subpoenaed items at deposition.

What does this mean to you? If you receive a subpoena, you may only produce the documents to the party serving the subpoena without appearing at deposition if that party represents to you in writing (e.g., in a letter) that all other parties have consented to production of the docume

nts without need for you to appear at the deposition. Such a letter should protect you from allegations that you improperly produced records by mail, instead of bringing the documents to the deposition. You do not need to see the actual agreement. If you have any questions as to whether you can simply mail the documents, instead of appearing at deposition, you should either call your attorney for advice or simply wait and bring the documents at the time and place designated in the subpoena.

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To Prevail on a Trademark or Unfair Competition Claim There Must Be a Likelihood of Confusion

David R. Bohm

By David R. Bohm



Part of a series on issues related to Manufacturers, Distributors and International Trade

In order to prevail on a claim of trademark infringement under the Lanham Act (the federal trademark law), a common law claim of trademark infringement, or a claim of unfair competition, a plaintiff is required to show that the infringing use be “likely to cause confusion or to cause mistake.” 15 U.S.C. § 1114(a).

In Sensient Technologies Corp. v. Sensory Effects Flavor Co., 636 F.Supp.2d 891, 899 (E.D.Mo. 2009), the Court set out determine whether such a likelihood of confusion existed. To make the determination, the Court

“… [considered] six nonexclusive factors.” Everest Capital Ltd. V. Everest Funds Management, LLC, 39 F.3d 755, 759 (8th Cir. 2005). These factors are:

“(1) the strength of the owner’s mark; (2) the similarity of the owner’s mark and the alleged infringer’s mark; (3) the degree of competition between the products; (4) the alleged infringer’s intent to ‘pass off’ its goods as the trademark owner’s; (5) incidents of actual confusion; and (6) the type of product, its cost, and conditions of purchase.”

Luigino’s Inc. v. Stouffer Corp., 170 F.3d 827, 830 (8th Cir. 1999).

Step One in the determination of a claim of trademark infringement involves the strength of the owner’s mark. If a mark is generic, it is entitled to no protection. If the mark is descriptive (which is the weakest category of protectable marks), it is only entitled to protection where the mark has developed secondary meaning; i.e., where the mark is widely recognized as identifying the source of the goods.

A generic term can never function as a trademark because it refers to the common name or nature of the article. Id. A generic term does not identify the source of a product, but rather indicates the basic nature of the product. See id…. “Because a generic term denotes the thing itself, it cannot be appropriated by one party from the public domain….” Likewise, descriptive terms are generally not protectable because they are needed to describe all goods of a similar nature. Such a term describes the ingredients, characteristics, qualities, or other features of the product…to be afforded protection, then, a descriptive term must be so associated with the product that it becomes a designation of the source rather than a characteristic of the product. Schwan’s IP, LLC v. Kraft Pizza Co., 460 F.3d 971, 974 (8th Cir. 2006).

 

“A strong and distinctive trademark is entitled to greater protection than a weak or commonplace one.” SquirtCo v. Seven-Up Co., 628 F.2d 1086, 1091. (8th Cir. 1980).

Strong marks are those that are suggestive, fanciful or arbitrary, with the last classification (essentially made up words) being the strongest.

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