Search first!

There once was a company named Zotz,

Which created toys for tots,

The newest toy, named Ketter™,

Recalled after a cease and desist letter,

Oh my, no trademark search, CEO Zotz?

First published in Inside magazine, NYSBA, Fall 2017

CEO Zotz could have received the cease and desist letter from someone who owned a federal registration, a pending federal application or used the mark KETTER™ before Zotz established its own rights to the brand. Conduct a preliminary US Trademark Office and online search. If it doesn’t reveal the identical brand, conduct a comprehensive search. This is the only way to determine if there are any unregistered third parties who may oppose a trademark application or use of the mark in commerce.

Search and File, Here and There!          

There once was a company named Zotz,

Which created toys for tots,

It set up abroad, of course!

But filing first is KnockOffSource,

Can Zotz manufacture? Methink “notz!”

First published in Inside magazine, NYSBA, Fall 2017

Trademarks are territorial. Protecting your brand in your home country does not equal protection in foreign territories. Conduct searches in each nation of interest and file all available trademarks. In many foreign nations, trademark rights are based solely upon filing and registration, not upon common law rights established when using the trademark in commerce.

Don’t Be Descriptive, Be Creative! 

There once was a company named Zotz,

Which created toys for tots,

Let’s use “Robotoy,” Zotz declares,

File at once, Lawyer Zares,

Months later, Zotz is dejected,

Too descriptive, trademark rejected.

First published in Inside magazine, NYSBA, Fall 2017

What’s wrong with “Robotoy,”? Whether a trademark can be registered depends on its position on the spectrum, from the strongest -- fanciful to arbitrary to suggestive --- to the weakest – descriptive to generic. Fanciful trademarks like Zotz have no meaning in any known language. Arbitrary marks have a meaning that does not relate to the goods or services offered. APPLE is arbitrary for mobile devices. To some, POLAND SPRING is suggestive of water. Descriptive marks tell you about the nature of the goods or services, and unless the mark acquires distinctiveness (which is not easy to do), descriptive marks are very difficult to protect. A generic mark, the precise name of the thing, can never be registered.

The principle is simple: use the registration symbol. ®

There once was a company named Zotz,

Which created toys for tots,

Trademark registration in hand,

Zotz proclaims “it’s my brand!”

Show me the money, Zotz exhorts!

Not without an ® on your tags, says the Court.

Section 1111 is an often-overlooked section of the US Trademark Act related to the requirements for receiving monetary damages in a successful trademark infringement lawsuit. It suggests that a notice of registration be displayed with the mark when used in connection with the offering or sale of the services recited in the registration.  This notice may take the form of the words “Registered in the U.S. Patent and Trademark Office,” “Reg. U.S. Pat. & Tm. Off.” or the symbol ®.  Failing to provide notice results in the drastic consequence of no profits and no damages for the winning party unless the defendant actually knew of the registration.

Be Cyber Aware

There once was a company named Zotz,

Which created toys for tots,

Vendor Zed has a new account,

Zotz sends the money out,

Where did the funds go?

Into the hacker’s account, oh no!

Hackers commit financial fraud by creating a fake email address mimicking the vendor’s name and emailing accounts payable saying that the vendor’s account information has been changed. Funds are then sent directly to the hacker.
 
The key takeaways here are that Zed and Zotz could have prevented financial fraud by using a secure email gateway, which would have scanned all emails, including scam messages from hackers, in Zed’s network, and they may be able to recover some or all of the funds if they properly notify their bank of the fraud soon after it happened.
 
Many state laws require that companies train their employees to be cyber aware and have written policies in place. Wiring money should occur only if there is independent verification.

I Do….Please Don’t.

There once was a company named Zotz,

Which created toys for tots,

Trainee Zeka sees a contract to review,

Will you agree to the terms? “I do!”,

Zotz’s network freezes, paid ransom appeases,

Now, search for the bots!

Clicking on links embedded in emails, texts, or popup ads is one of the most common ways that a company’s network is infected with malware. These scams can be very sophisticated: Trainee Zeka was trapped by one that uses links embedded in what appear to be DocuSign documents from a trusted source. Sometimes, the goal of the hackers is to be paid ransom. Malware may also collect valuable personally identifiable information or PII, confidential information or trade secrets. 

Even if the ransom is paid, the network must undergo a forensic analysis to determine if malware is present and if any information was viewed or stolen. State laws may require notification of both the individual and a state authority where PII is involved. But which law applies depends on the state of residence of the individual, not the state in which the company is established or does business. Cybersecurity training (mandated by many states) is critical in enabling company personnel to recognize these scams.

Kids Say Yes, Parents Say “Not So Fast”

There once was a company named Zotz,

Which created toys for tots,

Kids, sign up here,

We’ll send you great gear,

And you’ll meet new buddies,

For free, no fees!

In the US, any business that collects, uses, or discloses information from children under the age of 13 must comply with COPPA, the Children’s Online Privacy Protection Act. The goal of COPPA is parental consent and control over all information relating to children -- photo, video, audio, biometric, geolocation, and health information. How must Zotz set up zotz.com to comply with COPPA? Zotz must have a clear privacy policy outlining Zotz’s use of the information after collection, obtain parental consent before collecting information from children under 13 and for specific uses, such as sharing with third parties, allow parents to access and delete their child’s information, and maintain the confidentiality and security of the child’s information and only keep the information for as long as necessary.

Zotz is not allowed to condition the participation of the child in an online activity to the child’s disclosure of more information than Zotz requires for the online activity. Back in June, the FTC and Microsoft settled a case involving alleged COPPA violations relating to Xbox Live, including not obtaining parental consent, having inadequate privacy notices, and improper data retention regarding its collection of children’s photos, video, audio, biometric, and health information. In May, the FTC settled with Amazon about Alexa, including a prohibition against using children’s geolocation, voice, or personal information to train AI models.

Everything Old is New Again

There once was a company named Zotz,

Which created toys for tots,

Since 1950 toddlers squealed with glee,

QWACKERS® is in the bath with me!

But in 2010, KWACKERS™ was born,

So QWACKERS® we do mourn.

It’s common to update a venerable brand with a new font, associated symbol, or even an animated character (a dancing QWACKERS duck, perhaps?).  But if the original word mark or symbol is changed too much, the update is considered to be an entirely new mark requiring its own trademark applications worldwide. So when updating a recognizable older brand, the additional legal costs are just as important to consider as the impact of the new marketing campaign on a new generation of consumers.

The Trademark Pecking Order

There once was a company named Zotz,

Which created toys for tots,

Each year we play guessing games,

To create new names,

Fanciful are best,

Arbitrary are next,

Suggestive brings up the rear.

What’s wrong with “Robotoy,”? Whether a trademark can be registered depends on its position in the pecking order, from the strongest -- fanciful to arbitrary to suggestive --- to the weakest – descriptive to generic. Fanciful trademarks like Zotz have no meaning in any known language. Arbitrary marks have a meaning that does not relate to the goods or services offered. APPLE is arbitrary for mobile devices. To some, POLAND SPRING is suggestive of water. Descriptive marks tell you about the nature of the goods or services, and unless the mark acquires distinctiveness (which is not easy to do), descriptive marks are very difficult to protect. A generic mark, the precise name of the thing, can never be registered.

Big Brother is Watching

ZotzToyCo is our domain,

Our brand, our family name,

Located in a real place,

Now known in a virtual space,

Ever watching to maintain our reign.

Do you want to know if someone else has used your brand within a domain name? Use watch services to survey the domains from top level (.com) to country codes (.tv or .cn) so you are warned and can take action. If you find a domain name incorporating your brand and you own a trademark, you may file a UDRP complaint. Proceedings are all on “paper,” with decisions typically rendered in a few months. If you win, the domain name is transferred to you. UDRP proceedings are especially effective since most often, the domain name owner is unknown – the proceeding may be the best way of achieving the desired result.

Give that back, It’s Mine

ZotzToyCo is our domain,

Our brand, our family name,

Dot.com, an unfamiliar geography,

How to maintain our typography?

An aggressive arbitration campaign.

Watch services can monitor trademarks in the classifications and territories that you designate (for ZOTZ, toys and similar goods and retail stores worldwide) as well as domain names. If the watch service reports on a pending application (ex. ZOTZTOYS), you can request that the application be withdrawn, and if that effort goes nowhere, to file a formal opposition based on your prior rights to the ZOTZ brand. If you find a domain name (ex. zotz-toys.com), then you can file a UDRP proceeding (see my last post).

ROYGBIV

Royal blue/Hot pink,

See them and think,

A Zotz toy for me and you,

Those are Zotz colors, quite true,

Easily found on the registry link.

Many companies consistently use colors which have become so inextricably intertwined with their brands that the colors have a trademark life of their own. Think of the Tiffany blue box or Owens Corning pink. These particular colors are registered in the US, and no other competitor can use identical or similar colors for their jewelry packaging or insulation products. ZOTZ blue and ZOTZ pink, used consistently over time, could be registered. If you decide to be “colorful,” make sure it’s a color that stands the test of time.

The Truth Will Set You Free

Advertising is key,

Who’s best? You or me?

Take heed if you mislead,

Legal eagles you shall need,

Let’s simply compare, fairly!

You’ve all seen commercials comparing one brand to another. The keys to creating a comparative advertising campaign that won’t result in a nasty letter are to tell the truth and not be deceptive. If your competitors’ toys contain lead paint, you are allowed to name the competitor and the competing product when you tell the public but be sure that you’ve done the testing to support the claim and have provided the facts to back it up.

Use Your Imagination

I’m fanciful you say?

Lacking meaning in every way,

Translate me you cannot,

Yet I’m known to every tot,

ZORD: the best toy with which to play!

The last post focused on the pecking order of trademarks, with fanciful ones being on top. Fanciful trademarks like Zord have no meaning in any known language. You may ask: why is the framework “any known language”? The “doctrine of foreign equivalents” is a provision in the US trademark law that requires the translation of foreign words into English. So, thinking fancifully, Zotz Toys cannot file an application for “juguete” for toys –it may look fanciful to an English speaker, but it means toys in Spanish. Any clearance search must also focus on the foreign meaning of the mark under consideration.

Are You Meaningful?

Arbitrary, that’s me,

But is my meaning plain to see?

Hawks are birds, to be sure,

But in Zotzland, behind the door,

I’m a SESAME kite, flying free!

Second in the trademark pecking order are marks which are arbitrary: while they have a meaning in a particular language, that meaning does not describe the goods or services to which the mark is applied. A famous arbitrary mark is APPLE, which does not describe or suggest any feature of a phone or tablet. Similarly, SESAME does not describe or suggest any feature of a kite. When conducting clearance searches, it’s sometimes more difficult to clear marks that have meanings as you may not have been the first person to think about using the particular arbitrary mark for the goods and services.

Suggestively Speaking

Last but not least,

Suggestive is released,

Meaning is discerned,

Zotz need not be concerned,

For its soft CUDDLYBEAST!

Suggestive marks ascribe a meaning – the mark “suggests” some feature or aspect of the goods or services to which the mark is applied. Here, the Zotz toy is likely a plushie which is cuddly. The “beast” term is suggestive too, implying that the toy may be some sort of animal. When conducting clearance searches, it’s sometimes more difficult to clear suggestive marks as you may not have been the first person to think about using the suggestive word for those goods and services.