Category Archives: Domain Names

Trademark Registration A Lack of Finality?

Trademark Registration – A Lack of Finality?

Trademark Registration a lack of Finality?Over half a million trademark applications are filed each year throughout Europe, and a memo of the European Commission indicates that as of March 2013 there were nearly 10 million trademarks listed in European registers.  Putting it mildly, the Commission notes that “The demand for trade mark protection is high”.  But if you consider the essential purpose of trademarks, a problem starts to emerge.

Are the Trademark Registers too Crowded?

At their most basic, trademarks are a way for consumers to tell the goods and services of one business apart from those of another.  In principle, trade mark rights can also last indefinitely.  So, if the number of trade marks registered continues to grow in this fashion, with every combination, and every permutation being snapped up, surely businesses will run out of words to use?  Some people worry that it is already difficult to find a good .com domain name, but what would be the impact if you faced an uphill struggle when looking for a brand name you could use in general?  What if all possible brand names were taken, what would you call your new business, or products?

Fortunately, even if the rate at which trademarks are applied for is set to increase significantly, this scenario is far from becoming a reality.  First of all, just to cover all possible combinations of letters and numbers with marks only as long as the word ADIDAS would mean every single human being on the planet registering at least 10 trade marks, and that doesn’t take into account stylised text, logos, sounds, colours, shapes or other types of trademark.  Of course, the scope of protection extends further than basic identity – the use of a similar word can constitute infringement of a registered trademark, so not every combination of characters need be registered before it becomes difficult to conceive something novel.  However, this becomes even less of a problem once you account for the fact that the same trademark can be registered by different owners who are not competitors, but even so, the cluttering of the trademark registers is undoubtedly a valid concern.

Trademark Revocation

That’s why the role of trademark revocation is important.  Trademark registrations are not immortal, and although it’s feasible to maintain them indefinitely provided that renewal fees are paid promptly, there are a number of grounds on which a registration might be challenged.  One of the fundamental grounds on which you might apply for revocation of a registered trademark is that it isn’t being used.  Richard Arnold QC put it like this:

“The purpose of revocation is to remove trade marks or parts of the specifications of trade marks where there has not been use.  It is there to serve a purpose in trade; it is the Lipitor that stops the arteries of commerce being blocked with the cholesterol of unused trade marks”

Broadly speaking, if a trademark is left languishing for a continuous period of 5 years, it is vulnerable to revocation.  So, out with the old (owner) and in with the new.  But this is far from the only reason a trademark might be struck from the registers.

As discussed above, the purpose of a trade mark is to help consumers distinguish the goods and services of one undertaking from those of another, and once a word becomes the common name for something, it can lose this ability to designate origin.  This process is referred to by trade mark professionals as genericide – once a trade mark becomes generic it loses its distinctive character.  Some common examples of genericide are Hoover and Escalator – both of which are brand names which have become accepted into general language.  Once this happens, trademark registrations are on shaky ground.

Although far less common, another basis for revocation of a registered trademark is the argument that it is likely to mislead the public, for example if the trademark suggests that products have a particular geographical origin, or a particular quality when in fact they do not.

Invalidation

Aside from revocation, registrations can also be declared invalid.  Whereas the impact of revocation is that the mark is removed from the registers, if a trademark is declared invalid it is treated as never having been registered at all.  Trademark applications occasionally slip through the net, and so a registration might be invalidated if later on, it is discovered that a similar or identical trademark was already registered by someone else, or because another business had built up rights in a conflicting trademark by using it.  Alternatively, having been reassessed the trademark could be deemed descriptive in retrospect, and therefore lacking the ability to distinguish the origin of goods and service.

Should I still try to Register my Trademark?

So, registration is feasibly indefinite, but there are no guarantees as it suffers from a lack of finality.  Does this mean it isn’t worth registering? Absolutely not. The key message here is that there is far more to registering a trademark than simply making it onto the registers.  All of the risks mentioned above can be managed by taking care at the outset.  By casting a critical eye over your trademark before applying for registration, an expert will be able to assess whether it might later be deemed descriptive, or deceptive, and a professional search will reduce the chances of conflicting rights turning up out of the blue later on.  They will also be able to advise you of ways to maintain your registration, for example by using the registered trademark symbol you may be able to avoid genericide, alerting people to the fact that the mark isn’t simply a common word but an indication that you are the source of the product.

To help avoid losing your rights you should also take care to make genuine use of your trademark.  The concept of genuine use is complex, and you might be surprised by some of the situations which don’t meet this test.  For example, a manufacturer promoted its clothes by giving away drinks labelled with its brand, and because the freebies were not distributed with the aim of penetrating the drinks market, it was not sufficient to maintain rights over the brand in that class of goods.  On a related note, it’s important that you take care to use the mark in the way it is registered, and if you do make a change, for example by altering the design of your logo, you should consider whether it’s necessary to file a fresh application for the variation.

Do you need to bother with trade marks?

Since writing my book, Legally Branded, a number of business owners have thanked me for making this fundamentally important subject of intellectual property (particularly trade marks) understandable.

Some entrepreneur friends have even  suggested I emphasise the risks, and danger of ignoring intellectual property advice.  However, I’ve always tried to steer clear of scare mongering as a tactic to raise the profile of intellectual property, preferring to work with those clients that “get” the importance of intellectual property.  Our clients are the ones that get it, even if they’re not in industries where IP is obviously critical to their success.  They value their IP from the moment they start their businesses as did our client Headspace, for example, who are doing great things to make meditation accessible.

I recently attended a meeting with a business owner whose mind was firmly made up that there was no point paying expensive lawyers to give advice on IP.  I had agreed to meet with him at the request of his marketing manager who understands the importance of IP and hoped that someone more aware of the ins and outs of IP may be able to persuade his boss.  However, this business owner’s views did not shift one bit as a result of our meeting mainly because he talked far more than he was willing to listen, and his mind was already made up.  So, I know better than to try to address those whose minds are already made up that they know all they need to know about IP.

This is for readers who are curious, or undecided

This post is for those who may be curious, or who are still on the fence about whether it’s worth bothering with trade marks.  While it’s never a good idea to generalise about who does or does not need IP, I will stick my neck out and say that if you’re a lifestyle business (by which I mean you’re aiming to earn a livelihood and are not trying to build a big business or one you can ultimately pass on or sell) you can ignore trade marks.  You’re unlikely to come to anyone’s attention, or pose a threat to existing trade mark owners such that they would want you to rebrand for infringing on their rights.  Even if someone did require you to rebrand, chances are it will just be an inconvenience to change your marketing materials and rename the business.  You won’t have a name that attracts business, so could rename the business without suffering a drop in activity.  Similarly, if you’re setting up a business and want to first see if it will take off, then you MAY, depending on your business idea, be able to use a temporary name, or take a chance with the name you want to use (provided you’re willing to change it if the advice is that you would do better to choose an alternative name), and see if you can get anything off the ground before worrying about trade marking.  But for everyone else, it would be really foolish not to get trade mark advice from a specialist lawyer on the name you’re using.

Trade marks may be revoked

Trade marks can be cancelled, so even if you’ve secured a trade mark registration it doesn’t mean you’re alright to use that mark.  That’s why it’s misguided to do your own registration work, just to save on legal fees.  You may end up getting a registration, but it may not be for a mark that is capable of generating brand value.  You may not have an adequate scope of coverage, so that although you’re registered, it may not protect you if someone were to challenge your rights.  For example, registering a logo with a totally descriptive name – that is, one that describes what the business does – is easy enough to secure.  However, it’s an extremely poor choice of branding.

The law protects businesses against various unfair competitive practices, and helps you fight off competitors who use similar marks to yours, but you have very limited recourse with a descriptive name.  Using a descriptive name or a name that is otherwise incapable of being owned by you as a trade mark, leaves you wide open.  You will lose business that may have been intended for you, and you will have a business that is far less valuable than it might have been had you selected a legally powerful name.  This is the reason you should always consult your own IP lawyer on any name your branding professionals help you to choose, unless they are willing to take responsibility for its legal effectiveness.

Keyword rich names probably best avoided 

Also, take a look at the blog I wrote about Google’s recent algorithm change, which makes it even more of a poor decision to use descriptive names now online.  The writing is on the wall, so I would avoid choosing keyword rich names too when branding your business online.  The slides from my talk at Make It Big in 2013 also discuss descriptive names more.

Get legal advice

Even though you get some protection in this country just by using a name, don’t let that lull you into a false sense of security.  For example, if someone registers a Community Trade Mark they can stop you using a name you’ve been using, or limit you to using it only in a certain geographical area.  Why court the vagaries of litigation with all the cost implications when you can secure your rights in a name you’re getting recognition with, by paying ten times less?

Trade marks and legal advice should not be dismissed as too expensive to bother with for anyone who has a viable business.  They are an investment, and are the foundation for licensing and other ways of monetising your products and services.  In particular, don’t wait till you have reached certain turnover targets, because trade marks are fundamentally relevant to any business that aspires to be more than a lifestyle business.  Your business name is what the law protects when competitors behave unfairly.  So, trade marking is good business practice and isn’t just about whether you intend to become a brand, or think that if you sold your company whoever bought it would want to use your brand name.

Misunderstanding IP

There is a lot of misunderstanding about the relevance of IP, and huge generalisations are made about its costs.  But given that there are many different IP rights, of which trade marks are just one type, it’s foolish to dismiss them all as too expensive.  Knowing how to implement procedures to protect just one of these rights may be the critical element to your business success after all.

I think the problem is down to the complexity of IP law.  We are still in a transitional period between an industrial economy and a knowledge economy.   Consequently knowing how to deal with the physical things, the tangibles comes easy while intangibles that you can’t feel or touch, are less well understood. Intangibles are our knowledge, our brands, our digital content, and more.  By their very nature, they are easy to lose. Being transient, and non-physical, their legal significance can sometimes be overlooked or misunderstood.

Scrabulous and other high profile cases

The fact is that it can be difficult for lawyers to point out the benefits of IP except by pointing to situations where there have been well known incidents, such as with Scrabulous, which I discussed in a post recently.  Those of us IP lawyers who prefer to focus on the positives, won’t therefore want to keep pointing out the dangers, but I have outlined a number of scenarios in my book Legally Branded, which should help you better understand the risks.  Don’t assume that just because big businesses like Apple resolve their IP issues, that you will do so too.  People should know that for smaller businesses, the scenarios they hear about in the news about the Googles, Microsofts, Apples of this world would put them out of business because they would not have the resources to get themselves out of trouble.

So the moral is if you are a small business without access to huge sums of money to litigate your way out of  trouble then you absolutely need to make sure you avoid the problem in the first place by getting professional advice to register your trade mark.

Also, if you’re going to ignore IP protection, you need to know what you’re doing.  It could in some cases be rather like deciding not to bother with the foundations of a house you’re building.  In television programs like Grand Designs, the participants who overspend may end up not having enough money to do all the fine design details they had wanted.  Their  lack of funds means they have to compromise on the surface issues like designs.  They can’t compromise on the very structure and foundation of a building.  Unfortunately, the opposite approach happens in business when IP is ignored.  People can spend a fortune on the surface things like branding and websites while ignoring the fundamentals.

Distinguish IP from other legal work

While there are some legal issues you can and should skimp on in the early days of a business, IP isn’t one of them.  Note that IP is very often a contractual matter, and isn’t just about registrations.  So, take advice to see how to minimise your IP expenditure in a safe way if you think spending on IP may seem a waste.  Some business owners question any expenditure which doesn’t enable them to make money (such as learning a new marketing trick would increase their  chances of generating revenues).  However , think of IP as what enables you to keep the money you make, and in some cases to continue to earn revenues. So at the very least you absolutely have to take advice in order to develop your strategy for IP.

Your Brand and Your Domain Name

Choosing names that say what your business does on the tin may not be the best approach to choosing domain names online, despite it being an approach many businesses have adopted in the past.

Often, it seems like a good idea to follow in the footsteps of those who have gone before, taking what looks like the tried and tested approach.

However, whilst in the past descriptive domain names may have given businesses certain advantages online, recent changes to Google’s algorithm at the end of 2012 have done away with many of these previous benefits.

The early days of the Internet

When the Internet was young, and not unlike a small village with just one top shop, one grocery store, one pet store, and other businesses who were the trailblazers in their industry with a website, a tradition started of using descriptive names or phrases for domain names. People searching for these pioneering online suppliers could readily find them by using descriptive keywords to search for them, and search engines made the websites easy to find.  In those early days if you wanted to find a business chances are you would just type into your browser Books.com when looking for books or Hotels.com to find somewhere to stay and so on. Nowadays, less than 25% search in this way.

Google’s algorithm

As online business took off, and nearly every business put up a website, the online space became overcrowded.  A high ranking in search results grew to be the key objective of many businesses, as more and more of us turned to Google whenever we wanted to find a product or service, and so the practice of using descriptive domain names became entrenched because Google continued to give a preference to domain names describing what their potential customers were searching for. For example if you were called Jobs.com, you would be more likely to show up in the top results, assuming your website was otherwise well designed.

However, this led to marketers using “exact-match domain names” as a way to cheat the system, pushing low quality websites up in search result listings. With Google’s recent changes to its algorithm, Google has made it harder for sites to cut corners, ensuring that the focus is on quality and relevance. Today, Jobs.com does not even make the top 10 search results for a search for ‘Jobs’.

Brands over descriptive

Selecting descriptive names has never been good practice in branding, as these names do little to set you apart from competitors, but now with Google’s alterations to its algorithm, this method of choosing names is even more inappropriate.

Even before this algorithm change, the online environment that influenced people’s practices has been quietly moving on away from descriptive names, with users searching online being much more likely to opt to visit sites with recognised brand names. Rand Fishkin, a renowned online marketing expert and co-founder of SEOMoz, which helps websites get found online, summed up the point concisely in a recent blog post: ‘Unbranded sites may be losing significant amounts of traffic vs. their better-branded competition. Choosing a “keyword-match” domain seems like a worse decision than ever’.

We couldn’t agree more, and encourage readers to take care when choosing a domain name for products and services.  Choosing a distinctive name comes with a whole host of benefits, not least of which is the opportunity to own it through trade mark registration. It is also easier to deal with competitors who seek to copy your domain names. Do get in touch if this resonates with you, and you want to find out more about branding your business.

Is My Domain Name a Trademark and Should I File a Trademark Application to Protect It?

In deciding whether to file a trademark application to protect your domain name, the first step is to determine whether you use your domain name as a trademark.  If your domain name is only used as the Uniform Resource Locator (“URL”) (i.e., http://www.example.com) to indicate an address on the World Wide Web, then you are not using your domain name as a trademark.  Conversely, if you are using your domain name as an indicator of the source of the goods or services you provide, then you are using your domain name as a trademark.  If you are using your domain name both as a URL and as an indicator of the source of the goods or services you provide, then you are still using your domain name as a trademark.

Examples for kinds of use of domain names

Some examples should help clarify this.  If you go to Dell’s website , you will see Dell’s logo in the top left hand corner of the website, which consists of the word DELL in blue inside a blue circle.  There is no logo or trademark for DELL.COM.  In other words, Dell is using DELL as a trademark but not its domain name DELL.COM even though its website is located at http://www.dell.com.  Therefore, it is no surprise that, when you conduct a trademark search at the U.S. Patent and Trademark Office, Dell has not filed a trademark application to register DELL.COM.  On the other hand, if you go to Amazon’s website , you will see Amazon’s logo in the top left hand corner of the website, which consists of the words AMAZON.COM with a yellow arrow underneath it.  Amazon clearly uses its domain name as a trademark.  Therefore, it is no surprise that, when you search trademarks at the U.S. Patent and Trademark Office, Amazon has filed a trademark applications [Q: one or more – “a” or plural applications?] to register AMAZON.COM.  This may go without saying, but when a domain name is used as a trademark, the initial portions of the URL address for the domain name (http://www.) are not included in the mark.

Using your domain name as trademark

If you are using your domain name as a trademark, then you must decide whether your trademark is capable of being registered.  In this regard, trademarks consisting of domain names are really like any other trademark because you have to ignore the top-level domain (“TLD”) in the analysis.  Therefore, you will essentially ignore the .COM, .NET, .INFO, etc. portion of your trademark (in fact, the U.S. Patent and Trademark Office will make you disclaim the exclusive rights to the TLD in your trademark application).

In order to determining whether your domain name is capable of being registered, you must evaluate whether your domain name is distinctive once the TLD is ignored.  While distinctiveness is a legal term of art in trademark law that cannot be covered in great detail here, there are essentially three categories of distinctiveness when it comes to trademarks.  First, there are trademarks that are inherently distinctive.  Second, there are trademarks that are non-inherently distinctive but can acquire distinctiveness.  And third, there are designations that have no distinctiveness and can never acquire distinctiveness.

Inherently distinctive trademarks include fanciful trademarks, arbitrary trademarks, and suggestive trademarks.  Fanciful trademarks are words that are invented and do not exist in language (e.g., Xerox).  Arbitrary trademarks are words that exist but that have nothing to do with the goods or services provided under the trademark (e.g., Apple for computers).  Suggestive marks suggest a characteristic or quality of the goods or services but do not directly describe it (e.g., Greyhound for bus services suggests speed).

Non-inherently distinctive marks that can acquire distinctiveness over time include descriptive marks.  Descriptive marks directly describe a characteristic, ingredient, or quality of the goods or services being provided under the trademark.  For example, HEALTHY CHOICE for nutritious foods would be descriptive.  Such descriptive types of trademarks cannot be registered initially.  Over time, however, as the trademark owner sells and advertises its goods or services under the trademark, the descriptive trademark can acquire distinctiveness if the consuming public begins to associate the trademark with the owner.

Generic terms are designations that have no distinctiveness, can never be distinctive, and can never function as trademarks.  For example, AUTOMOBILES for cars could not be a trademark because it is the generic term for cars.

In conclusion, if you are using your domain name as a trademark and if your domain name (without the TLD) is inherently distinctive or if it is descriptive but has acquired distinctiveness as a result of long-term use, then your mark is capable of being registered and you should seriously consider filing a trademark application to register it, noting that there are other requirements for registration that are not discussed here, such as your domain name not being confusingly similar to a prior registered or pending trademark.

The article is a guest blog by attorney Bruno Tarabichi. Bruno Tarabichi is an experienced trademark attorney in the USA. Visit trademark-sentinel.com for more information about his trademark services.

How To Protect Your Intellectual Property Rights Even In A Recession

A Business’ IP is often the most valuable asset it generates.  So just neglecting to protect your IP in these recessionary times when budgets are tight can have adverse and long term implications—especially if there is a time limited window within which your IP may be registered.

To avoid a large hole in your IP portfolio when trade picks up, it’s important to be savvy during these tough times, and manage your Intellectual Property actively by either taking advice on strategy, or having an IP audit if you have an IP portfolio.

IP Audit

An IP audit is a great way to review your domain, trade mark, design or patent registrations. It will look to identify ways in which you may consolidate your portfolio or make savings. If you’re lucky, there may even be unexpected surprises, such as product licensing opportunities that may have been overlooked.

An IP audit helps in prioritising those IP rights that add value, whilst weeding out non-essential or redundant ones by letting them lapse or consolidating them to avoid paying renewal fees.

Strategic consultation

If you are a smaller business, consider having a strategy consultation. With the access to information that the internet has opened up, it is easy for SMEs to assume that they do not need to pay for advice.  So they will often do their own research, decide whether they need to register a trade mark, or design, and then buy that service.

Often the opportunity to find out about other IPR protection, such as trade secrets, or copyrights is missed, as is the possibility of establishing from an experienced practitioner whether there are alternative ways of achieving your desired objectives.  These could well be more cost effective.

For example, we often find that SMEs are really keen to protect their logos with trade marks, but are less concerned about trade marking their name.  Yet protecting the name is generally far more important, and there are other ways of protecting logos which are missed.

OBIS – Do Your Own IP registrations?

Proper advice, combined with doing your own registrations, could be a cost effective way forward during these recessionary times. Our product OBIS which was released in beta last month enables you to do some of your own legal work under our overall guidance.

This includes trade mark and design registration. DIY may not appeal to everyone, but if the alternative is to fail to protect essential IP, then it is preferable to not securing essential registrations. Using an assisted self help system such as that available on OBIS is better than simply doing your own registration by using the IPO’s assistance.  The IPO is very helpful, but will not check your form to pick up some of the glaring mistakes I have seen SMEs make when they file their own trade mark applications.

Product naming

Another useful step to reduce outgoings during these tough times may be to put in place a policy to guide your marketing team when selecting product names. Some name choices may reduce clearance costs.

Failing to have proper trade mark searches is a serious risk which no business should run. However, it may be feasible to opt for less extensive searches if they would be good enough to guard against the risk of infringing on the rights of others. By consulting an experienced intellectual property lawyer, you will be able to put in place a search strategy for your business which will be appropriate to the risks in your industry, and to the type of product you are releasing.

Other brand protection measures not to be neglected

Other basic preventative steps you may want to consider to reduce your legal exposure are to register your name on popular social networking sites, and paying relatively small sums to have company and trade mark watch services in place which will help you catch problems early and avoid more costly litigation later.

Remember too that a patent only gives you a right to stop others using your invention. Consider whether you have all the necessary permissions you need to make your product.

The key is to make your investment in IP go as far as possible, taking steps now to protect it, and avoid problems instead of having to overcome them later.

NinjaVideo.net, TVShack.net and other Domains Seized

Last week nine websites that allowed people to download or stream TV programmes and films for free were closed down (see here), their domains seized by the US federal government.  These sites included tvshack.net, Movies-Links.tv, FilesPump.com, Now-Movies.coms along with five others.

These sites were  targeted as part of a new initiative, aimed at combating Internet counterfeiting and piracy, and were selected because they allowed visitors access to films such as Toy Story 3 and Prince of Persia: The Sands of Time, which have only recently been released in the cinema.

Many of these sites allowed viewers to watch films taped by camcorder in the back of cinemas, in poor quality and often with audio tracks out of sync with the video.  It is argued that websites like these cause considerable damage to the film industry, as people who might otherwise pay to see films in the cinema, are able to watch them for free online.

John Morton, the assistant secretary from the U.S. Immigration and Customs Enforcement (I.C.E.) explained the new initiative, saying, “We are dedicated to protecting the jobs, the income and the tax revenue that disappear when organized criminals traffic in stolen movies for their own profit”.  Kevin Suh, Vice President of Content Protection for the Motion Picture Association of America, called this action the “largest takedown of illegal movie and television websites in a single action by the federal government” (See here) The government has decided to  severely crackdown on all websites that show pirated American movies, and is prosecuting the owners of these sites. They say that if any of these sites resurface, they will again take action. The US government is primarily targeting websites distributing cinematic content, but may also begin to target sites enabling illegal game downloads.

A major difficulty associated with these efforts is that the nature of the Internet makes it very difficult to control what the public access. Whilst the U.S. Government may have taken control of these domains, the websites can just pop up  at a different location using a different domain name. In fact, TVshack.net have already moved their website to another domain, TVshack.cc. So, while this move is effective to some extent, it is unlikely to be successful in eliminating online copyright infringement by itself.

In trying to control access to content on the Internet, the US Government seems to be fighting a losing battle. As with many similar efforts against the distribution of drugs, and unlawful music downloads, trying to stop illegal movie downloading is proving to be a near impossible task.

Copyright infringement is clearly a problem that everybody is trying to find the best way of tackling.  In the UK Ofcom is currently consulting on how to give effect to measures introduced in the Digital Economy Act 2010 aimed at reducing online copyright infringement.  It’s new draft code proposes that copyright holders could require Internet Service Providers (ISPs) to write to subscribers telling them their accounts have been associated with copyright infringement.  ISPs will need to keep lists, and provide lists of repeat infringers in anonymised form to right holders on request.  Personal details can then be obtained from the ISPs using a Norwich Pharmacal order.  The consultation is open till 30 July.

Why You Should Care About building Your Business on A Solid Foundation

Last week I suggested questions to ask your business lawyer.  But let’s accept it – legal isn’t as much fun as working in your business, or marketing it.  Legal stuff just isn’t sexy.

So, if like millions of other entrepreneurs, you are tempted to ignore the legal stuff, or to write it off as a lower priority in your limited start up budget, think again.  Remember the foundation of your home isn’t sexy either, but that’s not to say that without it your home would crumble beneath you.

Why starting up too soon can be the wrong move

It’s common when you’re starting up in business to want to focus on actually getting started so you can begin marketing your products or services.  In the rush to sort out business cards, a website, telephone, email, premises, and the like, it’s all too easy to forget that the right time to consult a lawyer is BEFORE you do these things.

It is the exceptional entrepreneur who hasn’t already got their website under way before they come to see us.  Some even have an e-commerce site nearing completion, have already chosen a name, settled on their domain name, incorporated a company, commissioned a logo design, before even thinking about finding an Intellectual Property and Internet lawyer.  Usually they turn up for guidance about Intellectual Property rights, such as trade marks, or because they realise they need some website terms.  However what they are really after is legal documentation – and even then almost as an afterthought.

The idea that a lawyer might be able to add considerable value in getting you started up on a more successful footing isn’t there for the majority of start ups.  What a pity.  Because with the experience of life, business, and the law that many of us lawyers have, there are useful tips and know-how  we can pass on about how to start up in business or online successfully.

Risk of Infringing Trade Mark rights of others

Although to some extent this impatience to get up and running quickly is understandable, remember that starting too soon could get you off wrong.  You may then have to spend as much time again putting right your early mistakes.

For example, the sort of distractions you may face flow from choosing a name that may be someone else’s registered trade mark.  If you’re LUCKY this will come to light quickly after you start your business when you will have invested little more than a website, business cards, email address, and other marketing materials.  What will be involved is to effectively start over with a new name, and new marketing materials.  In the next blog post in this series, I’m going to share with you the story of how this actually happened to me personally.

The longer you continue investing in a name that you cannot own, the more serious will be the repercussions for your business if someone else has trade mark rights in your chosen name.

Equally problematic is setting up with utterly descriptive and non distinctive names.  A descriptive name may give you a marketing short cut in those early days when nobody knows you exist and what you do.  But what a waste of time it is to build up a business let alone an online brand using an utterly descriptive name.

Risk of getting a website you have to scrap

Another risk is that of ending up with the wrong sort of website.  It is not unknown for people to have to start over with a new website once they turn their attention to getting it seen in the search engines. That is often when it is discovered the structure of the site is not effective for indexing by the search engines.  You then find your time and money and resources going in to having a new site built, instead of towards search engine optimisation.

Given that websites are often the biggest item of expense for start ups, and involve complex technology, it is surprising that so many people commission them without first taking legal advice.  If you end up with a flash site, when all you asked for was a good looking site, or an ecommerce site that alienates your potential buyers because it is so difficult to buy from, or other unsuitable website, then such a mistake could literally wipe you out.  The cost of a replacement site may be affordable for you, but the lost opportunity to get proper business benefits from your site should not be discounted – and the lost time in putting it right, could mean you run out of money before you can recover from this early mistake.

Make sure you understand websites and the possibilities first

The majority of businesses commissioning a website do not have a clue about the choices and considerations that determine the right site for them.  They rely on snatched conversations with web designers instead of getting proper independent advice.  A website is a bundle of Intellectual Property rights.  So it’s important to understand the ramifications of the contractual arrangements you reach with your web designers, as this can have long term implications for your business.

If you know deep down that you’re not paying enough attention to the legal stuff – and for some of you this reluctance may be partly down to a fear of legal fees, or simply be a perception that legal is boring – then resolve to consult a business lawyer immediately.  You do know the legal framework on which you build your business matters, so stop distracting yourself with the next thing that will keep you from seeing what’s been staring you in the face all along.

British Library Course

We cover the issues discussed on this blog in more depth as part of our workshop at the British Library Business and Intellectual Property Center, follow this link to find out more. The next course is on 5 August.

What Next?

Register for the Free Teleconference to find out about our new system for assisting online businesses to access legal help at prices all SMEs can afford.

This post is part of a series, to view all of the posts in this series, please click here.

How to Pick a Winning Name

In the early days of the internet when the web was like a small village which has just  one bread shop, one toy shop or one other type of store, it was understandable that businesses were drawn to names like toys.com or books.com or hotels.com as business names not just as domain names.  But with the crowded marketplace that the web has become, why would anyone want to choose such non distinctive names for their business?

Now don’t get me wrong.  These are great domain names because they’re fantastic for generating  traffic.  But as business names they suck.  Why?  Because you can’t get exclusive rights over such names by way of a trade mark.  See Hotels.com case which recently failed to get a trade mark despite having traded with this name for some 20 years.  Sure you can register the name with a logo, but that effectively protects the logo rather than giving you a monopoly over the name.

Failing to secure a trademark over a word means that you can’t stop others using the word to attract business.  So, you set yourself up with an inadequate name for brand protection.  This inevitably affects the brand value too.

Imagine if Google had named itself searchengine.com.  Would it have the name recognition and brand it now enjoys?  Of course not.  The fact that it has become one of the world’s top brands today, has quite a lot to do with the distinctive nature of the name itself.

Reading the Law Society Gazette about the aspirations of a new grouping of Law Firms QualitySolicitors one of my first thoughts as a trade mark lawyer was ‘what a poor choice of name’.  Then I had a look on the trademark registers and sure enough they have had to abandon their application for the word mark, and console themselves with a logo trade mark which is currently being advertised.

They won’t be able to stop me or anyone else bidding on Google adwords for the term Quality solicitor.  If they aim to become THE first household name as a solicitors brand, they should immediately rebrand and drop this misguided name.  The sooner they find themselves a distinctive name the better for them.  Michael Scutt also has advice for them in his article here.

When you start out in business or in any venture at all  begin as you mean to go on.  Assume that you will be the next major brand in your industry, the next Google, Amazon, or Nike.  One thing you will notice about each of these, is the distinctive nature of the brand name they have chosen, unrelated to their target market, but memorable.  If you choose a name that describes your business there would be nothing standing in the way of competitors providing similar services, under a similar name, and you would be one provider amidst a whole host of others.  If you rebrand at that time, think of all your wasted advertising expenses in becoming known under your descriptive name!  You would then have to spend even more letting people know about your new name.  Getting it right at the beginning has to be the answer.

Branding is extremely important in business, and if only more businesses appreciated the need to consult a trademark lawyer before settling on their name.  They would then know how important it is to do everything in their power to choose a distinctive, memorable name, and to protect it.

Google doing nicely from typosquatting

Google

Googol?

Harvard University researchers in a recent study, estimate that Google could be making $497million a year from the practice known as ‘typosquatting’ according to ZDNet

How does typosquatting work?

Typosquatters register domain names, usually a well-established trade mark, in bad faith to gain a commercial advantage. This usually involves holding the domains in a portfolio for web advertising revenue. The function of the domain is to attract traffic and generate click revenue.  The revenue is by way of a commission from Google or other search engines. Although the amounts per click may be quite low, for a high volume site the numbers soon mount up to large figures.

Pay Per Click advertising

The reason the revenue comes from Google or other search engine is that these will feature their advertisers’ Pay Per Click ads on the ‘content network’ (those of their advertisers that have not opted out of the content network distribution).  These include sites run by cybersquatters, who receive payment whenever someone clicks on the ads.

The way Pay Per Click works is that in order to get their ads listed high in Google’s or other search networks’ paid search results advertisers bid on keywords.  So, if the amount being paid per click for a keyword like “computer equipment” were $3.06, then Google or other search engine would keep the entire amount if the click on the advertiser’s ad came directly from the results displayed on its own pages.

But if the ad is sub-contracted out to others who are part of the wider content network, then these third party sites will display the ad too.  So if the click on the advertiser’s ad comes from a third party’s page or website then Google or whichever other search engine has the primary contract with the advertiser, would share the $3.06 with the click farmer, as they are sometimes called.

Click farming

The model specifically depends on the small number of surfers (15-20%) who type a url into a web browser rather than entering the name into a search engine. So, if a common mistyping of a brand’s url is entered into the browser, this “direct navigation” traffic (as opposed to indirect traffic through a search engine like Google) goes straight to the page at which the domain is “parked”(that is the place the domain address arrives at), or to its website if there is one developed, as there sometimes will be.  Then ads relevant to that brand will be displayed on the page in question. 

Example of typosquatting

So, for example, if the typosquatter has registered ‘micresoft’ and  by accident when you are seeking information from Microsoft, you type into your web browser “micresoft.com”.  Instead of going to  Microsoft’s page you reach a website populated with related keywords – possibly selling computers or software. The domain owner, (sometimes referred to as a “click farmer”) would collect revenue each time you clicked on one of the featured ads, while Google or other search engine, would also take their cut from the advertisements.

The difficulties that have arisen between trade mark owners and registrants of certain domain names have been some of the main reasons giving cybersquatters a bad name, and it is interesting how online businesses such as Google are profiting from what is direct trade mark infringement by the cybersquatters.  Until the trade mark owner takes action to recover the domain name from the typosquatter, money is made from the ‘wrong’.  Also interesting is that while the typosquatter might receive a claim in damages from the trade mark owner, Google seems to get away scott free, although there were moves last year by litigants in the USA to claim against Google. Do any readers have more information about that?

Legal Services Act 2007

Nowadays, when high street businesses like Spec Savers offer a choice of designer frames for prescription glasses, it’s easy to forget what the opticians market looked like before it was deregulated.  In those days there was little choice, and opticians dispensed NHS prescription glasses.

The legal Big Bang augured by Clementi’s  Legal Services Act 2007 is nowadays preoccupying many law firms who are wondering what the market for legal services will look like come the end of 2011.  That is when the main changes are expected to come into effect.

These will allow law firms and other businesses to apply for a licence to operate as “alternative business structures” (ABSs).

This will mark the beginning of a significant transformation in the way legal services are provided to consumers. While traditionally the provision of legal services has been an activity reserved to qualified practitioners, the ABS will permit non lawyers to have an equity stake in law firms, and may even lead to the flotation of some law firms on the stock market.

The ABS is also designed to foster more innovative ways of meeting consumer demand for legal services. The thinking is that such deregulation will allow more efficient and cost effective services for consumers.

It is widely believed that high street law firm doing conveyancing, probate and wills, and similar work is going to be the first to suffer from these changes.  However, no law firm will be immune.

It is difficult to see how the introduction of multidisciplinary practices (MDPs), able to provide businesses with a comprehensive range of services incorporating guidance on legal issues alongside commercial solutions, is NOT going to lead to a significant change for all types of law firm.  The very increase in choice and competition in the market for consumers, is bound to have an effect on every type of law firm.
Azrights is considering its position, and how to respond.  Currently, we are exploring the possibility of combining forces with graphic designers and web developers and internet marketers in order to provide a one stop shop to start ups requiring websites, identity creation, and assistance with names – company, domain and trade mark names.  They also need to understand the many areas of law that we handle, such as copyrights, designs, patents, as well as commissioning websites.

We are also focused on delivering innovative cost effective solutions.  One way we are doing this is in introducing more multimedia into the way we deliver our legal services.  For example, during trade mark registration, we often find that despite explaining legal principles in simple plain English letters, some of our trade mark clients either do not read the letters closely enough, or for some other reason do not grasp key issues about the  law and procedure.

When time is money, the need to re-explain points to lots of different people, becomes expensive.  But on the other hand, clients who purchase a fixed price trade mark registration service might take a dim view if we were to try charging them for extra time just to have something explained to them so they can provide further instructions, such as about how many classes they will proceed with.

So, for us, it was a logical step to deliver some of our explanations by video and podcast.  This works for us because it takes far less time to produce one podcast or video than to explain something ten times over.  As people differ, it stands to reason that some will be more receptive to receiving information through the spoken word rather than through written content.  So, a fairly easy change in fact revolutionises legal services, because it reduces the need for one to one consultancy time, while delivering more value to the client.

I would love to hear what others think about the changes being brought in by the Legal Services Act and our response to it as touched on here.