What is a naked trademark license?

If you have a trademark and enter into licensing agreements where you do not oversee and monitor the manner in which your mark is used by the licensees, you risk a "naked license." Having a naked license means your trademark is no longer valid, because it no longer is source identifying.

If you have a mark and want to license it to others, make sure you enter into licensing agreements negotiated at arms' length. If you let other companies use your mark without conditions, it will result in a naked license.

Wordmark trademarks and design mark trademarks.

Service marks, certification marks and collective marks are regularly called "trademarks." Each of these categories of marks contain wordmarks and design marks. A wordmark does not contain a logo or design. It is simply the word being claimed as a trademark. A design mark contains the logo or design of a mark. For instance, "Nike" is a wordmark. The Nike "swoosh" is a design mark. Both wordmarks and design marks are protectable under trademark law. Getting federal trademark protection on your company's wordmark does not mean your design mark is protected. Getting protection on your design mark does not mean your wordmark is protected. You would need to register both to protect both.

One design mark might be confusingly similar to another design mark but the wordmarks of the two might be dissimilar. Likewise, a wordmark might be confusingly similar to another wordmark but the design marks of the two might be dissimilar.

Does Fake Bo Pelini violate the real Bo Pelini's rights of publicity?

Rights of publicity protect a person's exclusive right to license their likeness to whom and on what terms they choose. This is at the heart of the NCAA student-athlete likeness antitrust litigation, because intercollegiate athletics may be the only place where this right is irrevocably transferred to the NCAA and its member institutions.

Fake Bo Pelini is a Twitter account designed to poke fun at the real Bo Pelini's sometimes surly and obstreperous nature. If the Fake Bo Pelini generates money from the use of Bo Pelini's likeness, he could be violating Pelini's rights of publicity. This does not appear to be the case.

The "Bo Pelini Foundation" is a registered trademark, but "Bo Pelini" is not. If "Bo Pelini" were a registered trademark or it was used on or in connection with goods or services, Pelini could not sue for trademark dilution, because Fake Bo Pelini is a parody account. If Fake Bo Pelini was not a parody and "Bo Pelini" were a registered trademark or used on or in connection with goods or services, then Pelini could sue for trademark dilution.

On trademark dilution: the Barbie example.

Trademark infringement results when a defendant uses a confusingly similar mark to a plaintiff's mark. Trademark dilution results when a defendant uses a mark in a way that lessens the distinctiveness of a famous trademark, regardless of a likelihood of confusion. This is a clear example of trademark dilution: an iPhone game that allows users to give plastic surgery to an overweight Barbie.

There are two types of trademark dilution: blurring and tarnishment. Dilution by blurring occurs when a defendant unauthorizedly uses a mark on dissimilar products and services than the famous mark, slowly reducing its distinctiveness. A hypothetical example of this would be a company providing mufflers under the brand name of "Nike." Obviously, consumers would not think that Nike mufflers were associated with the athletic shoes and apparel company, but allowing Nike mufflers to operate would lessen the distinctiveness of the Nike mark over time. Dilution by tarnishment occurs when a defendant uses a mark in unsavory contexts, for instance in an iPhone game where users give Barbie plastic surgery.

On generic and arbitrary trademarks: the Candy Crush example.

The developer of the Candy Crush game for mobile devices recently sought a federal trademark registration for "Candy." The article illustrates many common issues when registering a trademark over an existing word that would be generic when used on or in connection with the good or service it literally describes. For instance, "Candy," when used in games for mobile devices, is not unlike "Apple" when used with computers and like technology. If "Candy," were used in connection with candy, it would be generic and incapable of trademark protection. If "Apple," were used in connection with apples, it would also be generic and incapable of trademark protection.

Basically, a generic mark is one you would see in a cartoon or sit-com when a character is using a good. When you see a television character drinking beer, the can often says "Beer." When you see the character drinking cola, the can says "Cola." When you see the character eating chips, the bag says "Chips."

The "12th Man" trademark dispute between the Texas Aggies and Seattle Seahawks.

According to Texas A&M University's trademark application with the U.S. Patent and Trademark Office, the school has used the "12th Man" trademark in commerce to refer to its football fans continuously since 1922. The NFL's Seattle Seahawks, who began playing football in 1976, recently began referring to its fans as the "12th Man." As you would expect, this caused a dispute between the two over who owned the "12th Man" mark.

It is simple: Texas A&M owns the mark. The school used the mark in commerce before the Seahawks. The school did not file for the 12th Man mark until the 1990s, but this was still before the Seahawks began using the mark.

Accordingly, the Seahawks license the trademark from Texas A&M. If Texas A&M did not either license the mark to the Seahawks, or did not file an infringement action or seek an injunction to prevent the Seahawks from using the mark, Texas A&M would risk a naked license. This means the school unintentionally abandons the mark and loses its rights in it.

What do I need to do to start a business?

To start a compliant business, there are a number of things you must do. You need a company name that does not infringe another person or company's trademark. You need to form a business organization to provide limited liability to your company. You need separate bank accounts for your business affairs to maintain limited liability. You need to create an operating agreement or bylaws to provide the ground-rules for the day-to-day operation of your business.


You need to get a tax identification number from the federal government. You need to get set up with an accountant. You need to get any applicable licenses, depending on the type of business you have. You need to determine whether you will have employees, independent contractors or franchisees. If you have franchisees, you may need to file an irrevocable consent to service of process with the secretary of state, depending on the state in which you are located.


On an ongoing basis, you may need to develop confidentiality or non-disclosure agreements for employees, independent contractors, customers or suppliers. You may need employment contracts governing the creation of intellectual property by company employees. You need licensing agreements for the license or transfer of any intellectual property.


You need to file biennial reports to avoid dissolution of your business. You need to file taxes, sometimes quarterly.


Obviously, it all starts with a good idea for a product or service your company will provide. You need a website, and you need a marketing plan. As far as advertising; just do not lie. If you claim something on your website or in your company brochures or catalogs, be able to prove it. If you cannot prove a claim or assertion, you probably should not be saying it.


Every industry is different. What is required for one company in one industry in one state will be different from what is required of another company in another industry in another state. There are a lot of requirements in getting a business up and running, but it sounds worse than it is.

"Redskins Hog Rinds" denied trademark registration due to the term's disparaging meaning.

Possibly foreshadowing the inevitable demise of the Washington Redskins' trademark, the patent office denied registration for a trademark on "Redskins Hog Rinds," saying the term is disparaging to Native Americans. This is not the first time the USPTO denied registration to a mark including the name "Redskins." The USPTO's rationale is based on secondary meaning. Consumers associate "Washington Redskins" with the football team, but consumers would associate "Redskins Hog Rinds" with the racist term, not hog rinds.

Previous posts on IP litigation and IP generally.

Here is a link to an index of some of my previous posts on intellectual property litigation. There should be more added to the list in 2014.

Common misconceptions about trademark registrations.

This article addresses some misconceptions about federal trademark registrations. Several have already been discussed, such as the juxtaposition of "TM" with your unregistered mark, and the conduct of a proper trademark search. The article focuses on start-ups, but even if you are an established business, it may not be too late to do these things with your company.

The biggest college football story no one talks about: The Johnny Football trademark paradox.

By definition, a trademark is being used in commerce. To get a federally-registered trademark, the applicant must submit an affidavit of use stating that the mark is being used in commerce. An affidavit is subject to the penalty of perjury. If you submit an affidavit that you know is not true, you can be punished by up to five years in prison.

 

Use in commerce of a trademark entails making money from it. This is inapposite with the NCAA's principle of amateurism. Any college athlete with a federally-registered trademark admits to breaking NCAA rules. This can be easily alleviated by first filing an intent-to-use application and later filing an affidavit of use once the athlete is done playing college sports. This is not what Manziel did. He filed for a trademark on the Principal Register, and submitted an affidavit stating that "Johnny Football" is being used in commerce.

 

Apparently, the NCAA did not allow Manziel to obtain a federal registration, but just to protect his common law trademark rights until he could use the Johnny Football mark in commerce after he was done playing football at Texas A&M. Protecting common law trademark rights does not entail submitting an affidavit saying you are using a trademark in commerce. As it is, Manziel either committed a fraud on the United States Patent and Trademark Office by submitting the affidavit, or is admitting to breaking NCAA rules in submitting the same affidavit. The only other conceivable explanation is that the NCAA is allowing Manziel to play by a different set of rules than anyone else, by letting him have his trademark and play football too.

Trademarks in one minute (podcast).

Here is a one-minute podcast on the very basics of trademark law.

Placing "TM" next to your company name or logo when you do not have a registered trademark.

I previously discussed in greater depth the distinction between "TM" and R-Circle, when placed immediately next to a logo or trade name. Keep in mind that R-Circle can only be used if you have a registered trademark with the United States Patent and Trademark Office. But if you have a pending application with the USPTO, or simply want to claim common law trademark rights in your logo or business name, you can use "TM."

On the Trademark Trial and Appeal Board and the "Redskins" mark.

I previously discussed the Washington Redskins' trademark. It is being challenged by a group of Native Americans who find the mark disparaging, offensive and/or scandalous. More than a decade ago, the mark's federal registration was challenged on the same grounds. The reasoning was that the mark is entitled to registration, basically because more people associate the mark with the football team than with its offensive meaning.

This is a good background article to the Trademark Trial and Appeal Board, the group charged with making such decisions. The TTAB oversees petitions opposing and to cancel a trademark, along with interference and concurrent use proceedings. The TTAB does not decide whether a mark can be used or is being infringed; it only determines whether a certain mark is entitled to federal registration.

On one of the University of Alabama's few losses.

Unlike its football team, the University of Alabama lost a recent court battle with an artist who has painted realistic scenes of the school's football games since 1979. The school sued the artist for trademark infringement, unfair competition and breach of contract. In 2012, the district and appellate courts sided with the artist on the trademark infringement and unfair competition claims. The school argued that the artist could not sell reprints of the painted scenes, because they contained the Alabama trademarks. The artist said both the artwork and reprints were protected speech under the First Amendment. The courts agreed with the artist on those claims.

In 2013, the district court sided with the artist on the breach of contract claim, because it found the school effectively waived its right to sue. The court said one of the licensing agreements was breached, but the University lost its right to claim a breach of contract when it sold the artist's reprints to which it was objecting in the lawsuit. The court basically said the school could not have its cake and eat it too.

The "Johnny Football" trademark could get sacked.

I have written about Johnny Manziel's "Johnny Football" nickname/mark several times:

- The conflict between U.S. trademark law and NCAA rules: The "Johnny Football" scenario.
- On trademark infringement.
- Use of a trademark "in commerce" and the redux of the Johnny Football example.
- Agency, Cam Newton and Johnny Manziel -- Part 2: Teaching basic legal analysis through college football.
- What is the NCAA enforcement team looking at when investigating Johnny Manziel's eligibility? Part 3: Teaching basic legal analysis through college football.
- By definition, a college athlete with a federally registered trademark is violating NCAA rules.
- Illustrating the difference in legal standards through the NCAA and Johnny Football autograph situation.

Manziel is unique among college athletes because the NCAA allowed him to protect his "Johnny Football" mark prior to the expiration of his eligibility. Being able to protect his mark does not mean that he can use the mark in commerce. If he did use the mark in commerce, he would be violating NCAA rules.

The United States Patent and Trademark Office recently issued an office action illustrating its concern that the "Johnny Football" mark is not being used as a trademark. Manziel is in a difficult position, because he cannot use the mark in commerce and maintain eligibility. But he must use the mark in commerce to obtain a valid federal registration. Manziel's people made a big mistake by not pursuing an intent-to-use application followed by affidavit of use once his eligibility expires. That would have solved this problem.

On trade dress: Texas Roadhouse example.

The restaurant Texas Roadhouse is alleging trademark and trade dress infringement against Amarillo Roadhouse and Texas Corral, restaurants operated in Michigan and Indiana. Although I have discussed trademarks and trademark infringement elsewhere on this blog, I have not done so with trade dress.

Trade dress refers to the visual characteristics of packaging, décor, shapes, designs or site layout. Trade dress can be registered as a trademark if it is source-identifying and otherwise meets the requirements of a trademark, but it is usually protected without registration. Additionally, the trade dress must be nonfunctional in order to be protected. For instance, the décor and design of the Cheesecake Factory may be protectable as trade dress; but to the extent that any of that décor or design is functional (e.g., relating to shelter or architecture), it is not protectable.

More on benefits of trademark registration.

This is a good article about getting a federal trademark on your business name. It contains information previously discussed on this blog, but it does provide another perspective on the benefits of trademark registration.

Conferences to stop licensing trademarks to EA Sports' NCAA Football video games; more posturing in settlement negotiations in NCAA student-athlete likeness antitrust litigation.

The Big Ten, Southeastern (SEC) and Pac-12 Conferences have decided to stop licensing their trademarks to EA Sports for its NCAA Football series of video games. Last month, the NCAA said it would discontinue licensing its trademarks to EA Sports for the NCAA Football video games. In light of the NCAA's decision, EA Sports said its next college football release would be titled "College Football '15."

The Big Ten, SEC and Pac-12 are just the first conferences to say they will not license their trademarks to EA Sports for the video game. More conferences are expected to do the same. While individual schools can still license their marks to EA Sports for the game, EA would no longer be able to mention the NCAA or any of the conferences in future releases. This would diminish the realism of the game, and likely severely diminish profits EA is able to realize.

The conferences' decision is a continuation of the strategy employed by the NCAA: The conferences are "taking their balls and going home." Rather than pay the players for licensing their likenesses in video games, the conferences and the NCAA before them are now simply saying they will not take any part in the game's production, to avoid having to compensate the players.

In settlement negotiations, this is probably the best strategy the NCAA and the conferences can employ, because it eliminates the student-athletes' ability to negotiate for future profits. Unfortunately for gamers, it could mean the beginning of the end for college football video games.

By definition, a college athlete with a federally registered trademark is violating NCAA rules.

By definition, a college athlete with a federally registered trademark on the principal register is making money from the mark. One of the requirements of a valid trademark is a bona fide use in commerce.

"Use in commerce" means that the mark is being used immediately on or in connection with goods or services as of the date of filing. In filing a trademark application, the applicant must file an affidavit of use -- a written statement under oath and subject to the penalty of perjury -- that the mark is owned by the applicant and is being used in commerce. If the applicant does not own the mark, or is not using it in commerce, he or she is committing a fraud on the United States Patent and Trademark Office (USPTO).

Johnny Manziel received special permission from the NCAA to protect the "Johnny Football" mark, but he did not necessarily get permission to use the "Johnny Football" mark in commerce until his eligibility expires. He could have protected "Johnny Football" without using it (through the common law). In November 2012, Manziel filed an intent-to-use trademark application, like I would expect a college athlete to do.

On February 2, 2013, Manziel filed a trademark application on the principal register for "Johnny Football." In other words, he stated under oath that he was using the "Johnny Football" name in commerce (making money from it), and that he owned the mark.

It really is as simple as this: Either:

1. Manziel lied to the USPTO by submitting an affidavit of use when he was not using the mark in commerce; or
2. Manziel is violating NCAA rules by profiting from the mark (e.g., by signing autographs); or
3. Manziel misunderstood the NCAA's special permission, because he would necessarily have had to use the mark in commerce if the NCAA allowed him to pursue federal trademark protection.

There is no middle-ground.



(For further reading: "The conflict between U.S. trademark law and NCAA rules: The "Johnny Football" scenario.")