As e-commerce businesses have taken off, so have more issues arose relating to use of others’ intellectual property. We’ve already talked about how intellectual property like trademarks can be a delicate situation between businesses trying to protect their rights but trying to avoid upsetting their customers.
So-called patent trolling (generally speaking, this is where a company holds patents but doesn’t use them other than to try to get licensing fees from other companies) has been around for a while, but more recently, we have been seeing what could be called a form of trademark trolling. Basically, these are instances of trademark owners bullying other businesses, not really to prevent consumer confusion, but more so to end some kind of competitive business practice they don’t like (usually against direct competitors or companies selling their competitors’ products).
Take a look at this case between Multi Time Machine, Inc. and Amazon. Here, we have a watchmaker, who does not sell its watches on Amazon.com, suing Amazon for presenting consumers who search for their watches on Amazon.com (usually by entering searches like “mtm special ops”) with results of watches that are similar to MTM. (MTM has registered trademarks for MTM Special Ops and MTM Spec Ops.) Additionally, MTM was unhappy that Amazon failed to indicate to these customers that no results were found when searching for MTM products.
Naturally, Amazon wants to have the appearance of a store that has everything someone could want available for sale, and when it doesn’t have exactly what you were looking for, it wants to offer you the closest product to it. The court in this case referenced the situation where someone at a restaurant asks for a Coke and is instead offered a Pepsi. After all, is the situation in this case that different from walking into a department store and asking for a particular brand watch and the salesperson directing you to similar watches? Whether they tell you they don’t have that specific brand or not, you would probably figure it out pretty quickly by the absence of the brand name you were looking for on the products you were shown and the existence of different brand names in their place. Or perhaps the internet is different from this example, and companies like Amazon are trying to confuse customers into purchasing their alternatives under the guise of being made by MTM. Either way, the primary concern in trademark law is whether or not there is a likelihood of consumers being confused.
Ultimately, the court did not find MTM’s arguments persuasive and determined that there was no likelihood of confusion between MTM’s products and Amazon’s alternative offerings as search results. However, MTM appealed the case to the 9th Circuit, who recently heard oral argument on the matter.
Trademark rights are designed to prevent consumer confusion in the marketplace. We don’t want consumers to be confused about who makes the product they are buying, so we don’t let companies use the same or confusingly similar names on their products, especially if they are selling similar products.
If your business is thinking about using another company’s trademark, even for comparative or other purposes, it is a good idea to talk it over with a knowledgeable attorney. If you need help regarding trademarks, do not hesitate to reach out to the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at firstname.lastname@example.org.
Business is business, and the law is the law. Sometimes the combination of these two are unavoidable, even necessary, such as when it comes to business entity formation, contracts, licensing, permits, and the list goes on. In today’s electronic and technology-driven economy, intangible or intellectual property is becoming even more valuable than ever. When it comes to businesses, a lot of this comes down to their brand, their name, their slogans, which often use trademark protection to solidify and help protect these intangibles.
Trademarks as a system, were fundamentally designed to help avoid consumer confusion. That is ultimately the purpose. Trademark rights and protections are designed to prevent other businesses from coming up with products that use other business’ names, phrases, and sometimes even look and feel, sound, or color, which can cause consumers to buy something they thought was made by someone else because they were confused. Imagine a world without trademark protection. You’d probably never know for sure if those shoes with the Swoosh on them were actually made by Nike or not!
In an interesting local trademark story, a while back, Longmont-based craft beermaker, Left Hand Brewing Company, tried to register the trademark for the word “Nitro” as it relates to beer, after it came out with its Milk Stout Nitro beer. This is not the first time we have talked about craft brewery trademark issues, and it likely won’t be the last. Craft brewery trademark disputes are becoming more and more common.
In this case, the company wanted to use the word Nitro to distinguish its nitrogenated beers. It may seem like a harmless thing to do, but boy did it bring the company a lot of trouble. Other companies took action when they saw Left Hand trying to trademark the word, maybe you’ve heard of some of them, they include the makers of Budweiser, Samuel Adams, and Guinness!
Left Hand claimed it was doing it to prevent a bigger beermaker from ultimately registering the trademark, but due to the legal action from other brewers and the upset from the craft beer community over Left Hand’s actions, the company ultimately withdrew its efforts. Craft beerdrinkers were upset that Left Hand was trying to essentially “own” the word Nitro as it relates to beer. Other brewers use nitrogen in their products too, and being such a clear choice for a descriptive word, it only makes sense to use it to differentiate it from traditionally carbonated products.
Let this be a lesson. Whenever your business is thinking about asserting intellectual property rights or trademarks over something, it is important to think of it not only as a legal decision but a business decision as well. Businesses must think about how these actions will impact their competitors and how they might respond. Additionally, the way existing and potential consumers of your business’ products may respond to the news is critical to consider too.
Even if you may have a valid legal claim to something, it may not always be the best business decision to pursue it to the fullest. Cost-benefit analysis is key to situations like this, and it is clearly a good idea to consider both the business and legal ramifications of the different courses of action available to you. Branding is about more than logos, names, trademarks, etc. It is about the image your portray as a company, and a growing component of that is how litigious the company is, especially if it can be perceived as an “unfair” or “unnecessary” use of the legal system.
If your business needs help regarding a trademark, other intellectual property, or other business legal needs, do not hesitate to reach out to the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at email@example.com.