Businesses are often surprised to learn that trademarks, unlike domain or company names, do not have to be the same to prevent others from using or registering them.  Similar names are also covered. Some interesting examples of how trade mark protection may extend to similar names are Facebook, the Easy Group, and McDonalds.

Facebook vs ‘Teachbook’

Recently Facebook claimed rights over names for social networking sites ending with BOOK after it sued a website for educators named ‘Teachbook’. The site was created for teachers to network and help each other. However, according to a filing in San Francisco federal court the site is “Misappropriating the distinctive BOOK portion of Facebook’s trademark…in a blatant attempt to become a Facebook for teachers.”

By using the BOOK portion of the domain name Facebook claims that Teachbook is capitalizing on the Facebook trademark. The complaint claims one of the advertising points of Teachbook is that a lot of schools ban teachers from using Facebook so as to prevent its students finding out personal information about their teachers. Facebook believes that Teachbook is setting itself up as a substitute for Facebook for teachers.

The objection is to trading on the Facebook name or diluting its brand. The Facebook lawsuit followed a case by Best Buy against a priest for making a Volkswagen Beetle look like their “Geek Squad” vehicle and painted “God Squad” on the Beetle. In this case the priest agreed to remove the writing.

Teachbook’s response is that they will fight the trademark infringement lawsuit “It’s a David and Goliath situation,” said Greg Shrader from a branch of Teachbook yet to launch. ”They’re throwing bombs at a mosquito. They believe we’re going to roll over and in some respect they get to own the term ‘book.’”

Not that Easy

While it remains to be seen what the outcome of this case will be, it is interesting to look at how the Easy group have fared when protecting their brand. In 2001 easyJet claimed that Tim Dainty had infringed on their trademarks by registering the domain name “easyRealestate.com” which he used to run a low-price estate agency business. However, it was not the domain name which led to the passing-off case, but it was the way in which Tim Dainty had copied the easyGroup style deliberately. In this case the domain name was transferred to easyJet .

While EasyGroup were able to succeed in stopping easyRealestate.com using their brand, they were not so successful in 2003 against Easybroker. Easybroker, founded by fellow Greek Cyriot, Savvas Liasis, which was UK-based, had begun trading in 1999. EasyGroup lost the trademark dispute against Easybroker for using the word ‘easy’ in their name. Easybroker was founded before EasyGroup, therefore clearly not copying the word ‘easy’ used by easy Group. It seems that Mr Liasis feels that EasyGroup had met its match; following the successful verdict, Savvas Liasis said that, “It has really been a question of bullying. Not all of easyGroup’s target’s have been in the fortunate position of Easybroker in being able to afford to stand up to this.”

Mc mayhem

McDonald’s also tend to come down hard when others use the ‘MC’ portion of their name. One example of such a dispute is McCoffee, a coffee shop which after using the name for 17 years was forced to change its name in 1994. The shop in San Francisco which was owned by Elizabeth McCaughey was named as an adaptation of her surname. Other businesses that lost against McDonalds have included ‘McMunchies’ ‘McCurry’ ‘MacJoy’ ‘McSleep’. However, one UK restaurant named ‘McChina Wok Away’ won a nine year battle against McDonalds in 2001. After previously being prevented from registering McChina as a British trademark name in 1991, it was then ruled 9 years later that the McChina name would not cause any confusion among customers.

So in conclusion, although it is rarely a foregone conclusion that adopting a similar name to that of another trade mark owner will mean that you may not use that name, the uncertainty and potential litigation should be reason enough to suggest finding another name.  This is especially so, for start ups that have not already invested in a name.  Although it may be disappointing not to be able to use their first choice name, it is far better for the future of the business to find one that will avert litigation.

If we compared Ryan Air’s brand protection costs to those of Easy Jet, I think it is highly likely we would find that Easy Jet spends much more of its revenues on protecting its trade marks than does Ryan Air – reason enough to choose a proper name perhaps?

Sky has apparently been battling against Skype for the past 5 years over the ‘Sky’ part of their name. Sky claims that its rights in the ‘Sky’ name are infringed by Skype, and that people are confused into believing them to be part of the same company.  So far Skype has managed to fight off these challenges in Switzerland, Turkey and Brazil, although the European Union’s OHIM has upheld Sky’s opposition, which Skype intends to appeal. The opposition was upheld on the basis that Skype’s bubble logo is similar enough to the Sky trademark registration to be confused.

BSkyB told the Guardian that, “The key contention in the dispute is that the brands SKY and SKYPE will be considered confusingly similar by members of the public. This was supported by consumer research conducted by Sky, and which was taken into account by the relevant authorities when they recently found in Sky’s favour.  At this stage Sky has not brought any proceedings for trademark infringement against Skype.”

Sky also said it had previously taken legal action against a string of companies trying to use the “Sky’ brand name to piggyback off its brand. Skype has made no comment but noted in a recent initial offering document that if it could not register its trademark, it “may have a material adverse effect on our business. Moreover, a successful opposition to our application in one or more countries might encourage BSkyB or other third parties to make additional oppositions or commence trademark infringement proceedings.”

If Skype loses the case it could be banned from trading under the name SKYPE. Both Sky and Skype share a similar area of work – namely, providing telephone contracts. This could mean that the two companies could be viewed as providing competing services, leading to confusion between the brands.  One idea mooted in the Guardian article, for Skype to avoid trade mark infringement proceedings, is it sought to resolve the problem by entering into a licensing agreement with BSkyB which would allow them to use the Sky element of the Skype name.

Skype is a well-known brand name, and a company, which has had 560 million registered users. Losing its rights to trade under this name could have a significant impact on the business for the worse.  We recently wrote about the added difficulties a business faces the later it is found out that it lacks the necessary rights to its name.

Although Sky has so far not pursued Skype for trademark infringement, if BSkyB successfully manages to do so, then Skype will, in all likelihood have to re-brand.

In earlier posts we have written about the continuing battle between file sharing members of the public and the record and film industries, covering their attempts to discouraging infringement through legal action, and digital rights management technology.  We have also reported on the seizure of domain names pointing to websites that encourage infringement.  Despite these efforts however, file sharing communities continue to thrive, and in some cases, to turn a profit.  A recent move by one of the most popular BitTorrent websites in the world, TorrentReactor, offers a clear indication that the war against file sharing is far from over.  The site announced last month that they had ‘bought’ the Russian town of Gar, renaming it TorrentReactor.

While this publicity stunt is likely to incense many of those who have been striving to combat infringement online, in other parts of the world copyright owners have a different take on the issues entirely.  The popular Brazilian Technobrega movement, rather than taking expensive legal action against music sharing, has embraced it wholeheartedly.  Technobrega artists make money not from CD sales, but from live performances.  To encourage ticket sales for these shows they actively promote the free distribution of their works, with no expectation of receiving royalties.  They hand their material over to street distributors, who will copy and sell these on themselves, each copy acting as an advertisement for the artist’s live shows.

This is not the only illustration of differing attitudes towards copyright in Brazil.  Following an invitation for public comment on copyright legislation, proposals have been put forward in support of legalizing file sharing in exchange for levies on the provision of broadband internet connections.  While the feasibility of the proposals remains unclear, the Brazilian approach is refreshing, and even goes so far as to include sanctions to discourage the use of DRM to hinder fair use of copyright material.

It can be argued that cultural and economic differences between jurisdictions have a considerable bearing on whether or not certain changes to copyright legislation are practical, but it is difficult to ignore the widespread dissatisfaction with the traditional approach.  It will be interesting to see the impact of the Brazilian reforms once they are finalised, and implemented.

The IPKAT reported recently that the BBC is preparing to take the publishing company HarperCollins to court over a book that reveals the identity of the Stig from Top Gear. The Stig never removes his helmet on the show, concealing his identity. The identity of the Stig’s character has been kept a secret for the past eight years, since 2003. Confidentiality agreements were signed to stop those involved leaking this secret to the public and ruin the air of mystery that surrounds the character of the Stig. Revealing who the Stig was could spoil the viewer’s enjoyment of the BBC2 program. Only Jeremy Clarkson, Richard Hammond, and James May and a few of the show’s presenters are said to know who the Stig is.

HarperCollins has expressed its disappointment that the BBC has “chosen to spend licence fee payers’ money to suppress this book” and says it will vigorously defend the perfectly legitimate right of this individual to tell his story“. In a blog post on the Top Gear website by Andy Wilman, he argues against this, saying the corporation “has the right to spend money on protecting the intellectual property it created, because the truth is that all that stuff – the Stig, the Tardis, the Blue Peter dog – does belong to the licence payer, and not to some opportunists who think they can come along and take a slice when they feel like it”.

Before now there has been a fair amount of speculation over who the Stig really was, and several newspapers conjectured recently that his identity might be the former Formula Three driver Ben Collins. This came about after he decided to publish an autobiography about his life. However, the BBC still claims that the identity of the Stig remains a secret. The first Stig left the show after his identity had been revealed as the Formula One driver Perry Macarthy. Since then there have been numerous different racing drivers speculated as being the Stig and it has been claimed that the character is played by four different drivers. However, aside from these guesses, the true identity of the Stig remains unknown, and the BBC feel it is necessary to protect their harmless secret.

A BBC spokesman stated “This situation has come about as a result of an attempt by an external party to profit from unauthorised use of the Top Gear brand, one of the BBC’s biggest and most watched shows in the UK and around the world. As a result, it is important the BBC does all it can to uphold confidentiality clauses that have been agreed to in relation to the show.” By fighting against the publication of a book revealing the Stig’s identity the BBC is trying to protect the brand they have created which rests in part on the mystery surrounding the character of the Stig.

In previous posts I have commented both on the ‘End of Lawyers?’- a book by Richard Susskind and also on the Legal Services Act, which are two commonly discussed items by those interested in the UK law business landscape.

In the ‘End of Lawyers? The Legal Hybrid is already here‘  my message was I already see the need for some of the changes Richard Susskind predicts, such as for lawyers to become deeply multidisciplinary.  While in the Legal Services Act 2007 post  I mentioned that the Act is expected to  mark the beginning of a sea change in the legal services market, with more innovative solutions likely to materialise.

Naturally, these issues are occupying the minds of many of us who run law firms.  One such issue I have been thinking about a lot, concerns what Richard Susskind calls the latent legal market – that is those circumstances in which non-lawyers are generally unable to benefit from the legal input they require because conventional legal service is too expensive or impractical.  To quote from Richard Susskind’s first book ‘The Future of Law’ (p.27):

“In conventional, reactive legal service, when a legal risk has been perceived and a lawyer instructed, there is an expectation that some optimum disposal of the matter will be achieved.  In contrast, legal risk management techniques are often brought to bear in respect of legal risks that would otherwise not be managed at all or would be addressed too late.  And in this context, in the latent legal market, it may be entirely tolerable (commercially and as a matter of practicality) that any solution reached may be well short of the optimum position.  The point is that the legal risk is being  managed.  Without such techniques, such risks would not have been managed at all or may not have been manageable.  Thus there can be improvement if not perfection”.

Stephen Mayson in a speech ‘Legal Services Reforms: Catalyst, Cataclysm or Catastrophe‘ alluded to a similar matter – namely that one of the ways of reducing the cost of legal services may be to deliver less technically perfect and comprehensive advice sometimes.  It is not always necessary, in other words, to have the same ‘deliverable’.   For example, many SMEs often prefer us to draft a brief legal agreement for them, rather than to serve up the traditional 15 pages or so that the precedents appear as.  As long the SME understands the downsides and upsides of this approach, then why not provide the business with something more user friendly?

I am finding that the cost of legal services is increasingly unaffordable to many start ups and small businesses.  Either the size of the latent market is growing – for example, in society generally more people  have to set up their own businesses as the number of full-time salaried positions declines – or people are simply unwilling to pay the level of fees lawyers need to charge for their services (possibly because there are cheaper, alternatives available thanks to IT).  For this reason we have introduced a new system to provide affordable access to risk management and to our expertise.   Our press release here gives more details.

As more of us buy E-readers to read books digitally, the much discussed “death of the book” debate resurfaces.  Will digital books replace actual physical copies? Reportedly, on Amazon more people are buying digital versions of stories than hard bound or paper back copies.

Piracy of films and music has been around for years.  Now, with the introduction of E-readers such as the Kindle and the iPad, could eBook piracy become a problem?

When the iPad was introduced, BitTorrent book downloads went up 78% in the few days after the device went on sale.  This suggests that new technology such as the iPad could lead to increased piracy of books. This is not a completely new problem but, previously, actually producing a pirated book online was difficult. Original files were needed, and someone with enough time to scan the book onto a computer.  In contrast, sharing e-books is a much simpler task.

When Dan Brown’s novel ‘The Lost Symbol’ hit stores September last year it managed to sell more digital copies than hardback ones.  Along with this came, 24 hours after its release, pirated copies of the book available on popular file-sharing sites such as Bit-Torrent and Pirate Bay. Within days the pirated version was downloaded over 10,000 times. This could indicate the way books are headed in the future.

EBook piracy is still a relatively small problem currently. Only a few hundred eBooks are pirated per week. However, this is because ownership of eBook readers is still far from ubiquitous.  Compared to the market penetration of MP3 players, the number of people who own E-readers is marginal.  As devices become more affordable, these numbers are likely to rise, and publishers could face the same struggle against piracy as the music industry.

So far the tactics employed by publishing companies include the use of DRM, delaying electronic editions of their books, or completely refusing to make their books available digitally.

DRM has proved too unsuccessful for the music industry and does not effectively prevent people from producing pirated copies of files.  Arguably it just serves to aggravate those who have purchased files legally.

The approach of the publishers of Stephen King’s novel ‘Under the Dome’ was to delay the release of eBook versions of the novel. This decision proved unsuccessful, and had a negative impact on book sales.  Nor was it successful in preventing pirated versions of the book emerging – these surfaced within the next few days.  J.K. Rowling refused to publish her books digitally – yet her Harry Potter series is currently one of the most pirated titles. All the books are available to download online by fans who have scanned in or transcribed her books onto computers.

So, it will be interesting to watch to see how publishers handle this problem, and whether publishing faces the same fate as the music industry.

Along with the introduction of digital music purchases, came the rise of DRM restricting how it could be used.  With traditional media, music was generally freely playable and transferable, but over the past decade we have seen more and more restrictions imposed on consumers, controlling which portable device music is played on, how many computers it can be used with, and how long you have access to it.  As a result of these restrictions, many people no longer feel as if they really “own” the music they  purchase.  Even an act as simple as buying a different MP3 player could entail having to  repurchase your whole music library.

iTunes, the largest seller of digital music online, introduced FairPlay, a DRM scheme, into its delivery system at the request of record labels in their efforts to discourage piracy.  This initially meant that music purchased from the store could only be played on Apple products, and only on 3 different computers.  Even now, if you want to put protected music on an MP3 player that does not run Apple software, you simply can’t do so without first circumventing the protection.

My daughter told me that after losing her iPod and deciding to use her phone for music temporarily, she was very frustrated to find that half her music could not be transferred due to the DRM.  This discouraged her from downloading songs through iTunes, and after discovering that Amazon provide DRM-free music, often for a cheaper price, she stopped purchasing music from iTunes altogether.

Undoubtedly, the restrictions put in place by DRM can leave buyers who have paid good money for their music feeling bitter as a result of being limited to only using their music in a certain way.

Amazon in 2007 started selling DRM-free downloads of music, partly to compete with the iTunes service.  Amazon convinced big music labels such as Sony BMG and Warner to allow their music to be sold without protection in an effort to combat Apple’s near-monopoly over the market, which some argued was stifling competition and leading to less choice for consumers.

DRM-free tracks, while unrestricted in their use, generally include watermarks identifying the buyer.  This allows tracing of the source of music shared illegally over peer-to-peer networks or similar.  This way customers are not limited in the use of their music, while at the same time offering some degree of accountability to satisfy publishers.

Apple followed suit and dispensed with DRM protected music with the iTunes Plus service, but at a cost.  To upgrade your music library to DRM-free music means 20p per song, and requires that you convert all of your music, or none of it.

Arguably, DRM served mostly to frustrate customers, leaving them feeling cheated.  And while for now it appears that DRM has failed, in the case of the music industry, that is not to say that it will not resurface in future as the battle between the recording industry and piracy rages on.  Even now FairPlay is used to protect iPhone applications, and electronic books, and only time will tell if a consumer backlash will lead to the restrictions placed on other types of media being lifted.

When a site stores personal details for subscriptions, memberships or the like, there are certain legal regulations it has to take into consideration to stay on the right side of the law.  The Data Protection Act sets out eight principles for the lawful processing of data. Generally individuals’ personal data such as name, phone number or address should be used in the way envisaged by these principles, and they have certain rights under the Act such as the right to ask and see the information a site holds about them – known as subject access requests. The body which presides over the Act and ensures compliance is the Information Commissioner’s Office (ICO) and provides a wealth of guidance materials for businesses.

Beyond the Data Protection Act there are a number of other laws which clarify and add to the obligations placed upon businesses when using data.

The Privacy and Electronic Communications Regulations seeks to regulate the collection and use of an individual’s contact details for marketing purposes. This would cover sending marketing emails to individuals after having obtained their email address in exchange for a newsletter or an eBook.

A key question here is whether the individual has to specifically opt in to receive certain types of communication, or is it sufficient to give them an opportunity to opt out of certain uses you may want to make of their data?

For most forms of marketing, the general principle under the Regulations is that of ‘prior consent’, namely the individual should ideally give consent to the use of their details envisaged by the business before they can be included in any campaign. In practice this consent can be sought by providing an ‘opt-in’ or an ‘opt-out’ tick box at the point of collection. The difference between the two is that of an individual expressly permitting or prohibiting marketing emails from the business.

An alternative means of showing consent under the Regulations are through ‘soft-opt-ins’. This is where essentially prospective customers or clients provide their details.  Soft opt ins have a number of conditions attached, namely: the details should be collected in the context of a sale or negotiation of a sale to the individual; the marketing emails should relate to similar products and services only; the individual must be provided with an opportunity to opt out at the point when the details are collected and every time they receive a marketing email (this can be done by way of an ‘unsubscribe’ link in the email). For more details on best practice for email marketing see Direct Marketing Association’s guidelines.

For B2B marketing emails, however, the above restrictions do not apply. The opt-in restrictions in article 22 of the Regulations only apply to ‘individual subscribers’ and not ‘corporate subscribers’.  Obviously individuals from companies may, in practice, be providing their individual details, but where, for example, the marketing email is addressed to the company itself and the recipient’s email address is non-personal then no opt in provisions should be necessary. That being said every marketing email should always display the identity, contact details of the sender and, if sent by a company, contain the respective details of the organisation such as the company’s registration number.

An interesting point to flag up is that the legislation may set the threshold of what is acceptable in relation to email marketing, but the contract with the Email Service Provider may have even more stringent clauses. Some hosting companies may be contractually entitled to seek damages from customers engaged in unsolicited bulk mail. So as a rule of thumb the terms of business from a hosting service should always be reviewed before engaging in direct marketing.

In all, best practice for  ensuring compliance with legal requirements is by using  opt-in based marketing as much as possible, and stating how you will use  personal details (for example, by featuring a link to your privacy policy).

Ultimately, it depends on the business you are in as to how you comply with the requirements of the legislation.  For many small start up businesses it would, in practice, be acceptable to have a link to your privacy policy, and to use email addresses you collect on your website for marketing your own business to the individuals giving you their email address, as long as you include an easy way for such individuals to opt out of your email or other communications, there is no harm done if they receive one email from you following the downloading of an ebook from your website.

However, if you intend to share data with third parties, or to sell the data then you do need to be careful how you set up your data collection facility, and ensure that the data stays ‘clean’.

Also it is important to have a good system in place for handling complaints about unwanted emails. Failure to comply with data protection regulations could prove embarrassing in certain situations, and could even lead to a criminal conviction.

In their article earlier this year, the Ipkat drew attention to the fact that there is a marked separation between the worlds of trade marks and branding.

More often than not the two are not addressed collectively, but are rather dealt with by completely separate teams, or even distinct organisations.  A creative team might deal with the branding side, whilst the legal department would deal with the trademark considerations.

On the whole this seems acceptable because the teams have different aims.  Whilst trademarks are intellectual property rights for protecting a brand, brands themselves are the consumer facing aspect of a business, laden with social and cultural meaning.

However, in my view this divorce between the two disciplines is undesirable, and if someone were to be in possession of deep knowledge about both trade marks and branding, I suspect they would do a far better job for the client.

Trade Mark Searching

The crucial first step, once the client has an idea of the kind of name or logo that he wants to use for his brand, is to carry out a thorough trade mark search.  Without this step, which a number of smaller branding agencies avoid, the rights of a trade mark owner may be infringed, giving rise to potential disputes and in extreme cases the need to re-brand.

However, clients’ choices before they talk to us are often driven by an eagerness to get the ball rolling, by visiting branding agencies or web developers.  In fact it is generally far more sensible for them to sort out the specification for their website and their brand name first, ensuring that the money they spend on creative branding is not wasted on material that, in the end, they are unable to use.

When people rush off to branding companies and get logos designed, they often do not realise that existing rights to the name are sometimes only looked at incidentally if at all by smaller branding companies.  Many of these have no background in IP, and lack an understanding of the significance of correct name selection and searching.

Boundaries of the Creative Process

One way to understand this is to consider that creatives work within particular boundaries.  Some of these are set by practical considerations such as funding, or the medium used – for example if a logo is being developed for use on mobile devices with a 2 colour display, this will impose constraints on the designer.  These boundaries are also affected by the objectives of a particular client, for example they might want to target children and so the use of profanity, alchohol, sex and complex language will not be appropriate.

Increasingly important and often overlooked are the limits imposed on the creative process by the law, and the existence of prior rights.  To ignore the implications of these can be devastating to a brand.  To properly understand the limits within which they are to operate, creative professionals must be informed not only of the business objectives and practical considerations relevant to their work, but also the consequences of legislation and the registration of prior rights.

Hybrid lawyers

In Richard Susskind’s book The End of Lawyers, (please see blog here) he discusses how the legal profession is undergoing a fundamental change.  One type of lawyer who he predicts will emerge in the future will have knowledge of more than one field.  No longer will lawyers specialise only in law, they will have to develop multidisciplinary expertise.

In my view the current separation between branding and trade marks will have to be addressed by practitioners more comfortable with the traditional approach.  A deep understanding of branding and related issues will be necessary in future for lawyers to stay competitive, and offer clients a more rounded perspective and better quality advice.

Both branding and trade marking are focused on the need to stand out, to be distinctive and unique.  However, if those developing the brand do not understand what this involves in a legal sense, then they risk subjecting their clients to infringement proceedings further down the line.  The two fields are interlinked, and should be recognized as such .

The EU Regulation on nutrition and health claims made on foods (see here) were passed in 2006 to ensure consumers were not mislead by unsubstantiated health claims on food packaging. With a greater interest in health foods and supplements in the UK (£320 million spent on vitamin supplements alone, see here) this regulation is evermore in the spotlight. The body charged under the Regulation with verifying the scientific evidence supporting such claims is the EFSA and, to date, of the 900 claims reviewed, 80% have been rejected (see here). Once a decision by the EFSA has been made then this should be approved by the Commission, which allows an appeal process and gives six months post-decision for implementation.

An interesting aspect is that the Regulation does not just cover the claims on the package such as the small print, but actually the use of product names, brand names and trade marks (see here). This is where for example the brand name infers claims as to the nutritional quality or health effect of consuming the product. Examples of brand names which may be affected are SLIM FAST and WEIGHT WATCHERS. In relation to SLIM FAST,  Helen Darracoft a regulatory expert with a UK healthcare trade body says that their rebranding may be inevitable. She says the “actual name of the product is a health claim in effect – it slims and it does it quickly – and therefore it’s a claim which talks about the rate of weight loss so this will actually fall foul of the regulation.” Further, of the rejected list of health claims published by the European Commission the majority involve the use of trade marks (please see list here). An example is the product EYE Q, which is registered as a trade mark in the EU where claims that EYE Q products can support healthy brain development have been rejected by the EFSA. Here the trade mark EYE Q obviously bears a connection with the abbreviated term IQ.

The EU health claim regulation stipulates that trade marks appearing in labelling “which may be construed as a nutrition or health claim may be used without undergoing the authorisation procedures”. The authorisation procedure is as described above, namely applying to EFSA to authorise the health claims on labelling. That being said this exemption for a ‘health claim’ trade mark is conditional on the trade mark being “accompanied by a related nutrition or health claim in that labelling, presentation or advertising which complies with the provisions of this Regulation” (please see Article. 1(3) of Regulation). So even though the trade mark itself need not comply with the authorisation procedure the specific health claim associated with the mark does. In any case, it still remains unresolved whether a ‘health claim’ trade mark, once registered, can be challenged on the grounds of these regulations, as in the example of SLIMFAST above.