Fluid Trademarks

Fluid trademarks are trademarks that change over a short period of time — not a careful, measured brand evolution, but a dynamic, shifting depiction of an identifiable trademark. For example, Absolut Vodka frequently utilizes its distinctive bottle shape as a platform for marketing campaigns that task artists and designers with creating unique variations on the underlying trade-dress-protected bottle shape, resulting in advertisements depicting the Absolut bottle as an Easter Island statue or an hour glass, as well as labels embellished with abstract paintings of New York City or stylized drawings of superheroes. In the digital realm, an example of successful fluid trademark use can be found in popular logo variants like Google® ‘Doodles’ — unique versions of the Google logo that commemorate holidays, anniversaries, and historical and cultural events.

Trademarks ordinarily derive strength from consumer identifiability, meaning how uniquely a word or design links a particular product to the source or producer of that product. Traditionally, trademark owners are counseled to use their marks in a consistent fashion to enable customers to automatically identify those marks with their source and the goods related to them. Abrupt and unmeasured changes to a mark can potentially weaken, dilute, or destroy the mark, narrow the scope of its protection, or subject the mark to the risk of abandonment or cancellation due to non-use.

Despite the risks posed by abruptly changing a mark, fluid trademarks are an innovative, engaging way for brand owners to connect with their consumer base. Their novelty commands attention, and their use can spur public interest and deepen consumer loyalty. In order to properly balance adequate trademark protection against the dynamic nature of fluid trademarks, the following measures are recommended when adopting a fluid trademark marketing strategy:

1. Ensure the Underlying Mark Is Suitable

The ideal candidate for fluid trademark treatment is a mark that is readily recognizable to consumers and/or a mark that is “famous.” To use Absolut as an example, consumers must be able to recognize that the bottle beneath an embellished label or within a stylized advertisement is identifiably an Absolut bottle. Similarly, Google can substitute dynamic Doodles for its conventional logo on a regular basis because the underlying mark is strong and easily identifiable to consumers. Consumers visiting Google’s homepage are generally well-aware of the services Google offers in connection with its mark, regardless of whether the day’s Doodle commemorates national women’s day or Maria Montessori’s birthday. In addition, Google’s Doodles consistently appear in the same location as the underlying Google mark, giving Google a “homepage advantage” that enables users to readily associate a given Doodle with the underlying mark, even when the visual connection is attenuated, as when Google adopts highly stylized Doodles to commemorate birthdays of modern artists like Jackson Pollock or Wassily Kandinsky.

2. Ensure the Underlying Mark Is Protected

To ensure adequate protection for a fluid trademark, the underlying mark should be protected via trademark registration whenever possible. In most scenarios, the strongest form of protection is also the simplest: trademark registrations for word marks that make no claim to design elements, stylization of letters or numbers, colors, or size will arguably give you the greatest flexibility in using variants of your mark. To return to the Absolut example, because Absolut has the right to use the underlying, unadorned vodka bottle shape, the company can generally embellish the bottle as it pleases without forfeiting its rights in the underlying trade dress.

3. Ensure the Underlying Mark Remains in Use

Although the search engine frequently substitutes its homepage logo for Doodles, Google is careful to ensure that its underlying mark is discontinued on its homepage only for a brief period of time and remains in use concurrently with the Doodles. By doing so, Google keeps the underlying mark alive, prevents claims that it has been abandoned, and preserves the right to rely on the underlying mark’s priority dates. Like Google, you can use fluid iterations of your underlying mark without forfeiting your rights in the underlying mark if you ensure the underlying mark remains consistently in use.

4. Consider the Field of Use and the Protection Available for Fluid Mark Iterations

To ensure that the material you’re thinking of adding to your underlying mark does not violate the rights of a prior user, it’s advisable to preclear the material before you adopt it in connection with your underlying mark. In addition, the fluid renditions of your mark may be protectable in their own right under trademark law or copyright law — the unique design elements of an Absolut vodka advertisement depicting the bottle as a ski jump or a robotic dog might be protectable independently of the trade-dress-protected bottle shape it incorporates. An intellectual property attorney can assist you in preclearing fluid trademark material, determining what elements of your fluid trademark are independently protectable, and helping you craft a strategy to protect those unique design elements.

5. Be Prepared to Take a Non-Traditional Approach to Trademark Protection

Fluid trademarks are increasingly a public art affair and frequently inspire public participation and third-party creativity. As a brand owner, you must be prepared to craft a careful, non-traditional approach to policing trademark use that simultaneously protects your trademark rights and guards against the risk of alienating consumers.

By ensuring the underlying mark is suitable, protected, and adequately used, and by considering the field of use, the protection available for fluid mark iterations, and the need for a non-traditional trademark protection scheme, you can retain trademark protection for the underlying mark while adopting an innovative, engaging marketing strategy through use of fluid trademarks. — Mary Witzel

Lead Generation: How Companies Mine for Your Data

Most internet users today recognize that internet searching and website visits lead to data collection and targeted advertising. For example, a search for coffee makers on Amazon is likely to lead to coffee maker advertisements on Facebook. What may be surprising, however, is the value companies place on your information, and the many ways data collectors mine for consumer data.  Data collection, or lead generation, is estimated to be a multi-billion dollar industry,[1] with the largest industry player claiming to have, “on average, 1,500 pieces of information on more than 200 million Americans.”[2]

Lead generators obtain your information through a variety of sources. Perhaps the most well-known source is cookies, bits of information that are downloaded to your browser and can be used to determine when and where you saw an advertisement or what your interests might be based on the sites you visit. Lead generators also use less obvious sources, such as online fillable forms, including mortgage pre-qualification forms and online dating questionnaires, as well as “fun” surveys.[3] For example, the Huffington Post recently reported that a Google search for “McDonalds Jobs” resulted in an advertisement for the website <everyjobforme.com>, which linked to a form promising the user that it would “find McDonald Jobs near you” and requested the user’s name, zip code, and mobile number.[4] Once the personal information was entered, a recruiter for for-profit colleges would call regarding “educational opportunities.”[5] In addition, legitimate companies often grant third parties behind-the-scenes access to their websites, allowing these third parties to observe a visitor’s movement within the site.[6] A 60 Minutes report revealed that popular sites such as the New York Times’ website, among others, allow third party observers.[7] Finally, many retailers sell the data collected on consumers’ purchases, allowing lead generators to better understand what goods consumers are seeking and how to more effectively market those goods to individual consumers.

Currently, lead generation is a relatively unregulated industry, with little oversight from federal and state governments. In a 2013 review, the U.S. Government Accountability Office found there was no overarching federal law governing the collection of data or consumer privacy rights.[8] Instead, lead generation companies are governed through a patchwork of federal and state laws, as well as agency enforcement and self-regulation within the industry. One agency active in monitoring the lead generation industry is the Federal Trade Commission (FTC), which works to protect consumers from deceptive business practices. The FTC has used its administrative authority to fine lead generation companies for deceptive advertising, including a recent multi-million dollar settlement with multiple companies accused of unlawfully selling data obtained from payday loan applications, including social security numbers.[9] Some in the lead generation industry, however, believe that current FTC marketing guidelines are not being applied effectively and in some cases may even encourage misconduct.[10] The FTC is likely to update its guidelines soon to address these concerns. We will report further developments as they occur. — Stephanie Martinez



[1] Federal Trade Commission, Follow The Lead, An FTC Workshop on Lead Generation (Oct. 30, 2015), https://www.ftc.gov/system/files/documents/public_events/684511/leadgeneration-presentationslides_0.pdf.

[2] Steve Kroft, The Data Brokers: Selling Your Personal Information (Mar. 9, 2014), http://www.cbsnews.com/news/the-data-brokers-selling-your-personal-information/.

[3] Id.

[4] David Halperin, For-Profit College Recruiter Hides Behind McDonalds Arches, Huffington Post (Mar. 1, 2016, 4:54 PM), http://www.huffingtonpost.com/davidhalperin/for-profit-college-recrui_b_9359434.html.

[5] Id.

[6] Kroft, supra note 2.

[7] Id.

[8] U.S. Government Accountability Office, Information Resellers: Consumer Privacy Framework Needs to Reflect Changes in Technology and the Marketplace (Sept. 25, 2013), http://www.gao.gov/products/GAO-13-663.

[9] Lexology, FTC Settles Charges with Data Brokers for Misuse of Consumer Data (Feb. 24, 2016), http://www.lexology.com/library/detail.aspx?g=2fa892c5-e828-4c28-8822-9505dc779005. The FTC has previously gone after other bad actors in the lead generation industry. In 2014 the FTC fined a mortgage lead generator $500,000 after it found that the company deceived potential borrowers with ads falsely claiming that borrowers could refinance their mortgages for free. Federal Trade Commission, Mortgage Lead Generator Will Pay $500,000 to Settle FTC Charges That It Deceptively Advertised Mortgage Refinancing (Sept. 12, 2014), https://www.ftc.gov/news-events/press-releases/2014/09/mortgage-lead-generator-will-pay-500000-settle-ftc-charges-it.

[10] Lexology, FTC Focuses on Lead Generation Practices In Higher Education and Ed Tech (Nov. 10, 2015), http://www.lexology.com/library/detail.aspx?g=5bd60940-c267-43f7-98cd-d712704d751b.

How Does Intellectual Property Add Value to Your Business?

Recently at a networking event, I was asked the simple question: “What do you do?” After responding that I am an “intellectual property attorney,” I received a brief look of confusion, and then the question: “Yes, but what does that mean?” This exchange (which is a frequent occurrence, I might add) illustrates a common issue — many business owners are missing out on the value of their intellectual property, often until it is too late to capture and exploit that value.

Studies referenced by the World Intellectual Property Organization say that 80-90% of a business’s potential value lies in its intellectual property.[1] Imagine being a business owner, earning $100 dollars from a sale of goods, and then leaving $80.00 on the table as you leave. If your business is not identifying, protecting, and maintaining its intellectual property rights, then you are one of those owners.

With this is mind, allow me to illustrate some ways to recapture that value. There are numerous types of intellectual property to protect and exploit, and in the following paragraphs we will deal with three of the most prominent types: 1) Trademarks, 2) Copyrights, and 3) Trade Secrets.

Trademarks

Trademarks are the most obvious aspect of intellectual property, and the most widely known. You see and interact with trademarks every day, whether it be through names (Google, Yahoo), logos (Nike’s “Swoosh”), slogans (McDonald’s “I’m lovin’ it”), or even sounds (Windows’ startup tune). Trademarks serve as an indication of source and quality for the consumer. Trademarks allow consumers to act on strong preferences on where they shop and what they buy. For example, some people prefer to buy groceries at Kroger, others Food Lion, and still others prefer Wal-Mart. Notice — when you read each of those names, you first recognized the name and then immediately had varying impressions of each pop into your mind, ultimately providing a conclusion of whether or not you would choose to shop there. This all happens in a split second. Each trademark leaves an imprint as to the quality and cost of groceries and the experience of shopping.

Not only do trademarks serve as a source and quality indicator, but they serve as a marker for the brand. This marker is extremely important if you want to sell your business for a profit. For example, the executives at Facebook (another well-known trademark) probably never said “We want to purchase Evan Spiegel’s smartphone app for $3 billion dollars.” More likely, they sat down and said “We want to buy Snapchat for $3 billion dollars.” The reason Facebook values Snapchat at $3 billion dollars is because Snapchat has developed its brand under a now widely-known trademark, and that trademark contains the goodwill of millions of consumers. Anyone can make an app that sends temporary pictures (see Mark Cuban’s CyberDust and Facebook’s Poke), but the value lies in the quality, experience, and goodwill already associated with the Snapchat trademark. Although Snapchat is an international brand, it began as a small app and as a small business. Building a brand begins somewhere — and protecting your trademark from the beginning can be key to building up your $3 billion dollar idea.

Copyright

Copyright is another facet of intellectual property that can easily add value to your business. Many people hear the word “copyright” and think of artistic creations such as books, visual art, or music. But consider how copyright translates into your marketing materials. Many businesses have valuable copyrightable interests in photography, product packaging, websites, commercials, or informational videos, to name a few. Establishing control of these assets through copyright protection allows you to harness the value of your business’s creative marketing approaches.

Additionally, some of the most valuable copyrightable materials include software code and data compilations. Copyrights on software code protect your proprietary information from direct copying and allow your company to stake out a claim in the market. Once your company harnesses control of that share of the market, then you are able to control the dissemination of your software through the marketplace. Because copyrights typically have a long duration, having a copyright for a useful piece of software may be extremely valuable when negotiating with potential customers or business partners.

Trade Secrets

One of the least understood areas of intellectual property lies in trade secrets. Most commonly, trade secrets are secret techniques or devices used by a company in manufacturing its products. You establish a trade secret by guarding a proprietary concept that has economic value simply because it’s not generally known and by taking measures to protect it (for example, through contracts). Many businesses have trade secrets but do not realize that the information they have constitutes a trade secret. If you have developed a unique and efficient way of producing results, you may have a trade secret. Alternatively, if the methods of producing a particular product are known only to your company, you may have a trade secret.

Coca-Cola provides one of the greatest trade secret examples. Coca-Cola tightly protects the formula that gives the distinctive and crisp taste associated with their leading beverage. If they did not protect their formula as a trade secret, then the Coca-Cola brand would not have the notoriety it has now. Other soda producers would be able to precisely replicate and recreate the Coca-Cola taste, thereby eliminating Coca-Cola’s uniqueness. By protecting their trade secret, Coca-Cola retains their exclusive market share which is extremely valuable. Although Coca-Cola is a famous example, every company has something that sets them apart in what they do. What you do to set yourself apart may be a valuable trade secret that you can protect.

Protecting your business’ intellectual property requires more than filing for trademarks, copyrights, and protecting trade secrets. Intellectual property protection requires marking your territory in the marketplace, making sure you have the biggest share you can have, and creating a clear impression of what your company offers to the consuming public. In the modern world, the primary value of a business no longer lies solely in the tangible assets it holds. The true value lies in growing and monetizing the intangible assets, which your company can protect as intellectual property. This turns intangibles into value, which then increases the overall value of your business. — Noah Downs



[1] Building and Enforcing Intellectual Property Value, An International Guide for the Boardroom, 2003 PriceWaterhouseCoopers.