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The metaverse refers to an immersive digital world where users can interact with different spaces, people, and things using digital avatars. It creates virtual settings that mimic the real world where people can deal with, wear, and touch branded goods and services. In this setting, would the use of a trademark infringe the rights of the trademark owner for those equivalent goods or services in the real world? The question is yet to be answered by the courts, but definitely an important one for trademark owners to consider. Also, as the NFT (“Non-Fungible Token”) industry, which involves digital assets that can be used across different metaverse spaces, continues to flourish, should trademark owners start expanding their trademark filings to secure their trademark rights and presences in the metaverse?

Merriam Webster defines an NFT as a unique digital identifier that cannot be copied, substituted, or subdivided that is recorded in a blockchain and that is used to certify authenticity and ownership. In other words, an NFT is the digital version of a certificate of authenticity, embodied in the blockchain. A trademark can be “any word, phrase, symbol, design, or a combination of these things” that identifies and distinguishes the source of goods or services from competitors in the marketplace. Federal trademark law provides many protections for trademark owners, including the ability to sue for infringement where third-parties use their trademarks in ways that will likely confuse consumers about the source of the goods or services. Therefore, trademark laws protect brand owners, including brands that do businesses in the metaverse and businesses that sell NFTs, who can be protected by their registered trademarks when someone else uses the same or similar name or logo.

Although to most people the metaverse and NFT still represent mysterious new arenas of potential opportunities, there have certainly been signs of the momentum of their rising popularity. Therefore, trademark owners must be mindful of the potential for infringers, many anonymous and foreign-based, to prey on their trademark rights in the metaverse or using NFTs. 

Lately, there has been a trend of blockchain and NFT-related trademark filings by large global companies. For brand owners, particularly those well-known in consumer goods markets around the world, it seems wise to consider securing trademarks in the metaverse space to get their foot in the door, and as a powerful defensive strategy to combat infringers in the metaverse, especially in first-to-file jurisdictions where trademark squatting is prevalent and it is critical to file early. 

For example, Nike Inc. applied for a suite of new trademark applications in the US for some of its most well-known marks including NIKE, Just Do It, and the AIR JORDAN logo, covering various goods and services in classes 9 and 42, including downloadable virtual goods in class 9 and retail store services featuring virtual goods in class 42. Crocs, Inc. applied for a trademark in classes 9 for downloadable digital media, namely, digital assets, digital collectibles, digital tokens, and non-fungible tokens (NFTs); class 35 for retail store services and online retail services featuring virtual goods…provision of an online marketplace and registry for buyers and sellers of digital assets, digital collectibles, digital tokens and non-fungible tokens (NFTs); class 41for entertainment and amusement, namely, provision of online non-downloadable virtual goods for use in virtual environments; and class 42 Providing temporary use of non-downloadable digital media, namely, digital assets, digital collectibles, digital tokens and non-fungible tokens (NFTs). NBA Properties, Inc., applied for registration of NBA TOP SHOT for “Downloadable virtual goods, namely, computer programs for the creation and trade of digital collectibles using blockchain-based software technology and smart contracts, featuring players, games, records, statistics, information, photos, images, game footage, highlights, and experiences in the field of basketball.” Opensea, which calls itself “The largest NFT marketplace” filed for trademark registrations in Class 35 for services including “providing an online marketplace for buyers and sellers of crypto collectibles” and in Class 42 for services including “creation of online retail stores for others in the nature of web-based service that allows users to create hosted crypto collectible and blockchain-based non-fungible token stores.” 

As the examples above demonstrated, many businesses have existing trademark registrations for their goods and services, but trademarks specific to the metaverse and NFTs may be getting more and more important now. The United States Patent and Trademark Office (the “USPTO”, as well as other trademark offices around the world) places goods and services into different “classes” under which the trademarks are classified.  Most of these goods and services in “traditional” classes do not cover digital goods and services in the metaverse or NFTs (which the USPTO classifies in classes 9 and 41, amongst others). As a result, it is important that businesses consider filing for relevant trademark applications for their goods/services in the appropriate classes to receive the desirable scope of protection.

It can be argued that existing trademark registrations for physical goods or services may cover the digital goods or services in the metaverse, but there are currently no statutory laws or case law that can confirm such argument yet. There are some newly filed cases, like the lawsuit that Nike filed against StockX’s NFT collection “Vault” that contains Nike’s trademark, and the complaint Hermes filed against Mason Rothschild for its NFT collection “MetaBirkin,” but these cases have not yet been adjudicated by courts. Thus, if your company is thinking of expanding your business into the metaverse or NFTs, it would be worthwhile to consider filing for relevant trademarks in order to be protected against infringement in these new arenas.

Lastly, a word of caution for any trademark owner thinking about expanding their business into the metaverse and NFT industries, be cautious when using any third-party trademarks or copyrighted work in an NFT (be careful when your logo was created by an independent contractor!). If any third-party’s brand name, logo, copyrighted work, or product is used in connection with creating an NFT, written permission (proper license) from the owner must first be obtained, or else you risk putting yourself in legal hot water. 

 

This post is the part II of our last blog post “4 Secrets to Building Your Best Brand (Part I).”

In addition to start using your trademark as early as possible to obtain important trademark rights and start selling goods or services across state lines with your trademark to allow it to be regulated by the Trademark Act, here are two more secrets to help you build your best brand!

  • DON’T INFRINGE ON OTHERS’ MARKS

Trademark Infringement means a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees.

For example, situations like these:

When evaluating whether two trademarks are confusingly similar, courts in the U.S. actually look at between nine to thirteen different factors to determine whether there is confusion that will cause trademark infringement. So when lawyers create trademark search reports, we look at those different elements and provide an analysis to prevent our clients from infringing others’ marks.

The two most important factors of this analysis are the following:

  • The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation, and commercial impression.
  • The relatedness of the goods or services.

The greater the similarity between marks, the less related the goods or services have to be in order to support a finding of likelihood of confusion. Therefore, if two marks are identical or virtually identical, the respective goods or services need not be as close to finding a likelihood of confusion.

 Other factors of this analysis include: 

  • The similarity of established, likely-to-continue trade channels.
  • The conditions under which and buyers to whom sales are made, i.e., “impulse” vs. careful, sophisticated purchasing
  • The number and nature of similar marks in use on similar goods 
  • The existence of a valid consent agreement between the applicant and the owner of the previously registered mark  
  • The fame of the prior mark
  • Nature and extent of any actual confusion
  • Concurrent use without evidence of actual confusion: length of time and conditions

Before you apply to register your trademark with the USPTO, you should search the USPTO’s trademark database – Trademark Electronic Search System (TESS) to see if any trademark has already been registered or applied for that is: similar to your trademark, used on related products or for related services, and live.

  • BE THE OWNER OF YOUR MARK

Copyrights are generally owned by the person who created the works of expression. Therefore, if you are not the creator of your trademark you may not be the actual owner of the mark!

If you are not the actual creator of a creative work, then the only way that you can acquire exclusive rights to the work is by having a signed and legally sufficient writing transferring some or all of those rights exclusively to you or your business. If the creative work is created by an employee in the course of his or her employment, the employer owns the copyright. If it is your independent contractor that created the work, then it depends on whether the independent contractor signed a written agreement stating that the work shall be “made for hire,” or enter into an assignment agreement with you.

It is important to note that, under California law, including a work made for hire clause in an independent contractor agreement with an individual will cause the California-based independent contractor to be considered a “statutory employee” under California’s workers’ compensation, unemployment insurance, and disability insurance laws.

Therefore, when you are creating your trademark, make sure you are the exclusive owner of your mark/logo when you hire an independent contractor to create it, by using work for hire agreement or a copyright assignment agreement and don’t forget to address potential worker classification issues!

If you need help with registering a new trademark with the USPTO, contact us today to discuss your trademark protection strategies with an experienced trademark attorney. Schedule an appointment with us to have a free initial consultation. 

“…branding is the process of attaching an idea to some object, or to a service or organization.”

– Rob Walker

Trademarks are the legal expression of brands. Trademarks are generally words, phrases, logos, and symbols used by producers to identify their goods. However, shapes, sounds, fragrances, and colors may also be registered as trademarks.

Here are four trademark secrets to help you build your best brand: 

  • BE THE FIRST TO USE IT 

Unlike China and European Union countries, United States follows the first-to-use trademark system, under which marks that are actually used in commerce first are assigned trademark rights and given priority in their territory of use. Under first-to-use trademark regimes, being the first to apply for trademark registration does not guarantee priority to the Applicant. Thus, in the U.S., prior use of a mark as a trade name, prior use analogous to trademark or service mark use, can establish proprietary rights.

These proprietary rights are based on common law. A trademark can be established solely through use in commerce in a specific geographical area. Business names, logos, and phrases that are regularly used–even though they have never been federally registered–can all be considered common law trademarks in the U.S. Therefore, the Trademark Act allows for cancellation of Principal Register registrations based on prior use of a confusingly similar mark, by one who “believes that he is or will be damaged by the registration.”  The petitioner of such cancellation only needs to use their mark in some way that creates an association in the minds of consumers between the mark and the petitioner’s goods, which is a lower standard than the “use in commerce” standard required for trademark registration.

Therefore, an important secret to building your best brand is to start using your trademark as early as possible, because prior users are afforded important rights under U.S. trademark law – including common law trademark rights and the priority to cancel a federal trademark registration.

  • SELL ACROSS STATE-LINES

The scope of federal trademark jurisdiction is commerce that may be regulated by the U.S. Congress. Article 1, Section 8, Clause 3 of the U.S. Constitution is what is often referred to as the Commerce Clause, which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.  The importance of selling across state-line is thus created by this need to ensure a trademark registration is within the scope of federal trademark jurisdiction.

The USPTO requires a proper filing basis for all federal trademark registrations. The trademark applicant’s mark must already be used in commerce or registered with a bona fide intent to use the mark in commerce. Intent to use means that you haven’t started using your trademark in interstate commerce, but you have a bona fide intent to do so within the next three to four years. Although you can apply to register your trademark with an intent-to-use basis, you cannot actually register your trademark until you show that you’ve started using it in commerce and you file the proper TEAS form and pay the required additional filing fees. When registering your trademark with the USPTO, you’ll need to provide evidence that you’re using it in commerce. You’ll need to submit a specimen showing how you use your trademark. 

Therefore, another secret to building your best brand that is protected nationally under the federal trademark law is to start selling across state lines and prepare the proper specimens to serve as evidence of your trademark use in interstate commerce. If you are using your trademark in conjunction with the sale of physical items, you may place the trademark directly on the product or on the product’s packaging, displays, tags or labels, etc. Or the trademark must be used on documents associated with the goods in connection with its sale, such as an invoice. On the other hand, if you are using the trademark in conjunction with offering specific services, the trademark must be used in a sufficiently obvious way with the marketing materials (website, pamphlet, ads…) of the services.

Submitting specimens that will be accepted by the USPTO is not as straightforward a task as it sounds. There are many rules that the specimen must comply to.  For example, it is important to note that advertising material is an acceptable specimen only for services, but not for goods. Moreover, any webpage specimens must include the URL and the date the page was accessed or printed, otherwise, the specimen will be rejected by the USPTO. Additionally, a specimen that shows a trademark used in a purely ornamental or decorative manner is likely not an acceptable specimen. For example, a slogan or logo emblazoned across the front of a t-shirt, hat, or tote bag would not be acceptable because consumers would likely perceive the slogan or logo as merely an ornamental or decorative element rather than as a trademark indicating the source of the shirts, hat, or tote bag. However, consumers may perceive a small word or design on such goods, like a small discrete animal logo on a shirt front pocket, as a trademark.

 

[To be continued in Part II]

 

 

Interested in learning the secrets behind building the best brand? Join us for this FREE webinar and learn about how to build a successful and legally protectable brand! If you are thinking about building a brand, you cannot miss this!

It is the new year and a lot of us resolved to work out more and get stronger. But don’t limit your strength training to just your muscles–your trademarks deserve a little boost as well!?

Why is trademark strength important?

U.S. trademark law recognizes a spectrum of distinctiveness that provides a sliding scale of trademark protectability. Judge Pierre Leval defined trademark strength as the amount of “legal muscle” possessed by a given mark.

The stronger the mark, the more uses the trademark owner may exclude from the marketplace through a trademark infringement or dilution action. Stronger marks are able to exclude more similar marks from the marketplace. Such increases can happen along two fronts: “appearance” of the trademark and the “goods or services” the trademark protects. The stronger a registered trademark is on the “appearance” dimension, the less similar the look, sound, and spelling a third-party’s mark must be in order to risk being excluded by the registered trademark. The stronger a registered trademark is on the “goods or services” dimension, the less similar the goods or services offered by a competitor using the same or similar marks must be in order to risk being excluded by the registered trademark.

A trademark’s relative strength or weakness will also have a direct bearing on its performance in the market. A mark that is highly distinctive functions as a strong mark, identifying the owner as the source of the covered products or services. When a mark is not distinctive or it may already be used by others on or in connection with different products or services, the mark is considered weak.

Therefore, trademark strength is extremely important for trademark owners as it has a strong impact on the value of the trademarks to their owners. It is generally easier and less costly for a trademark owner to acquire and enforce exclusive rights in a strong trademark that is distinctive and unique than one that is descriptive or highly diluted, i.e., widely used.

How is a mark’s strength or weakness gauged?

The relative strength or weakness of a trademark may be gauged by placing the trademark on a spectrum. The types of trademarks discussed below range from the strongest to the weakest.

  • Fanciful or Coined Marks. A fanciful or coined mark is at the strongest end of the spectrum because it is inherently distinctive. Such a mark consists of an invented word that is a combination of letters that has no meaning. For example: GOOGLE for online services, PEPSI for soft drinks, ROLEX for watches, and XEROX for copiers. Since a fanciful or coined mark has no inherent meaning, in the beginning, a bigger effort in terms of advertising is necessary in order to educate the public as to the relationship between the invented word and the owner’s product or service. However, these marks enjoy the broadest scope of protection against third-party use.
  • Arbitrary Marks. An arbitrary mark is composed of a word or words that have a common meaning in the language of the relevant jurisdiction; however, that meaning is unrelated to the goods or services for which the mark is used. Arbitrary marks, such as CAMEL for cigarettes and APPLE for computers, are considered highly distinctive in identifying and distinguishing products or services. As with fanciful or coined marks, the public must be educated as to the association of the arbitrary mark with the relevant product or service, but the scope of protection obtained is very broad.
  • Suggestive Marks. A suggestive mark gives consumers some sense of the nature of the products or services that a business will provide without actually describing the product or service. A suggestive mark is one that requires “a mental leap from the mark to the product”, or, “the consumer’s imagination, thought, and perception to reach a conclusion as to the nature of the goods or services.” Variety Stores, Inc. v. Wal-Mart Stores, Inc., 888 F.3d 651, 662 (4th Cir. 2018). Examples of suggestive marks are AIRBUS for airplanes and NETFLIX for streaming services. Suggestive marks can possess an inherent element of sales appeal and will require less education of the public than coined or arbitrary marks; for this reason, generally, suggestive marks are entitled to less-extensive protection.
  • Descriptive Marks. In general, a descriptive mark is a word (or words) that merely describes a product or that contains ingredients or attributes that are too weak to function as a trademark. An example of a merely descriptive mark would be COLD AND CREAMY for ice cream. Such a mark is very unlikely to be granted registration, as the phrase merely describes an attribute of the product. Words that merely describe an attribute, feature, end result, or use of the product, or the persons employed in its production, generally are not granted trademark protection. Merely laudatory terms such as “best” or “quality” also are generally not registrable. In some jurisdictions, surnames are treated as descriptive marks. What is initially a descriptive word may later become protectable as a trademark if it acquires secondary meaning. In other words, if a descriptive word is used and advertised exclusively as a trademark for a sufficient period of time, it may, in addition to having the primary meaning that is descriptive of the product, come to identify the mark as being associated with a single source of origin for that product. An example of a descriptive word that has acquired a secondary meaning and become protectable as a trademark is SHARP for televisions.
  • Generic Words. A generic word can be thought of as the common name of the product or service in question—for example, “clock” is a generic word for timepieces. Such words can never be appropriated by a single party as trademarks for the products or services they signify, since the public perceives and uses them solely as common nouns or terms. Generic words or phrases are not registrable or protectable in relation to the products or services they signify.

How to select a strong trademark?

As a trademark applicant, you should try your best to come up with a strong new trademark that is inherently distinctive. The strongest types of trademarks are (1) fanciful or coined marks, such as EXXON for petroleum products, KODAK for photography company; and (2) arbitrary marks, such as AMAZON for retail services, APPLE for computers, SHELL for gasoline, and BLACKBERRY for cell phones. 

There are many resources online that can help you with the naming process of your brand. For example, what we found on this website: https://guide.onym.co/ or the books like “Brand Thinking and Other Noble Pursuits.” Check out our other blog post on how to choose a business name here

If you need help with determining your proposed trademark’s strength, contact us today to discuss your trademark protection strategies with an experienced trademark attorney. Schedule an appointment with us to schedule a free initial consultation! 

Did you know that color, sound, scent, and hashtags can be protected by trademarks? 

Traditionally, trademarks are words or symbols used to identify the source of a product or service. Most trademarks are word marks such as COCA-COLA; or design marks/logos such as ; and slogans, such as Coca-Cola’s “It’s The Real Thing.”

However, the list of things that can be registered as trademarks under the Lanham Act is actually very broad. There are practically no limitations to the subject matter of registrable marks, so long as the mark is capable of acting as an identifier of source, whether because it is inherently distinctive, or it has acquired distinctiveness and the mark is not functional.

Here is a list of non-traditional trademarks: 

Color Mark

The registrability of a color mark depends on the manner in which the proposed color mark is used. Color takes on the characteristics of the object or surface to which it is applied, and the commercial impression of color will change accordingly. Color marks are never inherently distinctive, and cannot be registered on the Principal Register without a showing of acquired distinctiveness.

Color, whether a single overall color or multiple colors applied in a specific and arbitrary fashion, is usually perceived as an ornamental feature of the goods or services. However, color can function as a mark if it is used in the manner of a trademark or service mark and if it is perceived by the purchasing public to identify and distinguish the goods or services on or in connection with which it is used and to indicate their source. 

Sound and Scent Mark 

A sound mark identifies and distinguishes a product or service through audio rather than visual means. Sound marks function as source indicators when they “assume a definite shape or arrangement” and “create in the listener’s mind an association of the sound” with a good or service. Some famous sound trademarks include the iconic ticking of 60 Minutes’ stopwatch that CBS trademarked and the sound of a lightsaber, FYI, is described as “an oscillating humming buzz created by combining feedback from a microphone with a projector motor sound.”

Some scents that are protected by trademarks include the scent of Play-Doh, which is described as “a unique scent formed through the combination of a sweet, slightly musky, vanilla-like fragrance, with slight overtones of cherry, and the natural smell of a salted, wheat-based dough;” and the “flowery musk scent” in verizon stores.

A trademark applicant that wishes to register a sound or a scent trademark is not required to submit a drawing if the mark consists only of a sound, a scent, or other completely non-visual matter.  For these types of marks, the applicant must submit a detailed description of the mark.

Hashtag Mark

A “hashtag” is a form of metadata consisting of a word or phrase prefixed with the symbol “#”. Hashtags are often used on social networking sites to identify or facilitate a search for a keyword or topic of interest. 

As hashtags became increasingly more popular on social media, in 2013 the United States Patent and Trademark Office (USPTO) recognized hashtags as registrable trademarks “only if [the mark] functions as an identifier of the source of the applicant’s goods or services.” The addition of the term HASHTAG or the hash symbol (#) to an otherwise unregistrable mark typically will not render it registrable.

Some examples of hashtag mark the USPTO has granted registration include: 

#EVERYDAYMADEWELL for “online retail store and retail store services in the fields of clothing, footwear, bags, sunglasses, jewelry, watches, and fashion accessories”

#HOWDOYOUKFC for “restaurant services

#THESELFIE for “photography and videography equipment, namely, remote shutter releases

Unique challenges applicants of non-traditional trademarks face

Federal registration of trademarks generally confers certain benefits to the trademark owner However, non-traditional trademarks face unique challenges that traditional trademarks don’t face in registering with the USPTO. Non-traditional trademarks can take longer and cost more to register and in addition to the distinctiveness and non-functionality hurdles, challenges exist in clearing the marks for registration due to the complexity involved in searching Non-traditional trademarks on TESS; fulfilling technical requirements for registration involved in providing the appropriate drawing and specimens for marks that are not easily depicted on paper; and the unique unpredictability due to a lack of successful precedents to provide guidance. Even if it is registered, a non-traditional trademark may be difficult to enforce. Furthermore, the inherent challenges in searching non-traditional marks make it hard to monitor infringement of the mark. 

If you need help with your non-traditional trademark, contact us today to discuss your trademark protection strategies with an experienced trademark practitioner.

When starting a company, your brand is of your most valuable assets. However, an often overlooked area of creating and launching a brand is trademark protection.

Entrepreneurs often wonder whether it is worth filing for a federal trademark. While you establish some rights the moment you start using a brand, there are significant advantages to registering your name, logo, or packaging design.

Here are nine advantages to filing for and obtaining federal trademark protection on the Principal Trademark Register:

  1. Prima facie evidence of validity and the registrant’s ownership of the mark.
  2. Constructive nationwide use of the mark.
  3. Federal court subject matter jurisdiction over infringement and other trademark claims without a showing of diversity or minimum amount in controversy.
  4. Statutory remedies for federal trademark infringement claims, including, under certain circumstances:
    • treble damages; and
    • recovery of attorneys’ fees and costs.
  5. Constructive notice of ownership, which eliminates the defenses of good faith use and innocent adoption.
  6. The right to use ® and other notices of federal registration.
  7. After five years the registration may, subject to limited exceptions, become incontestable and be deemed conclusive evidence of the owner’s exclusive rights to use the mark.
  8. A registration may be recorded with US Customs to stop the importation of infringing, counterfeit, and gray market goods.
  9. A registration may provide a basis for registering the mark in foreign countries.

Not all trademarks will qualify for the Principal Register. However, understanding your options and the best ways to register and protect your brand is a worthwhile investment. Contact us today to discuss your brand protection strategies with an experienced trademark practitioner.

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