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About Kurt Leyendecker

Kurt Leyendecker specializes in intellectual property law, including the procurement of United States patents for individual inventors and small entrepreneurial companies.

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The law once said that to file an application for a United States federal trademark registration, an individual or a business had to actually be using the mark in interstate commerce. That individual or business must have actually sold the goods or services to someone in another state, or their sale of the goods or services had to have had an effect on interstate commerce. There was no way to “reserve” a name prior to actual usage.

In 1989, however, the Trademark Act was amended to allow for an “intent to use” application (ITU) to be filed with the United States Patent and Trademark Office (USPTO). While actual use in interstate commerce is required to issue a registration, the ITU application allows an individual or business with the bona fide, good faith intent to use a certain mark to file an application in advance with the USPTO.

The ITU carries some substantial benefits, including what we trademark attorneys call a constructive use date as of the date of the application. Put simply, under the law you will now be treated as though you had actually started using the mark in interstate commerce as of the date the application was filed, even if the actual use comes much later down the line. Therefore, once your registration issues, you will be considered the senior user and can prevent others from adopting the same or similar mark for the same or similar goods if that user adopted the mark after the date of the ITU filing, even if their date was before you had actual use.

The constructive use date of the ITU application can be a big advantage for businesses. It allows a company to pick a name (or several possible names) for a new product or service offering, conduct clearance searches to make sure no one else has a better right to the name, and then immediately file an ITU. This can be of special importance in cases wherein a name has been identified but there will be a delay in the rollout of the goods or services. By filing the ITU, the company is assured that it is protected against someone else beating them to the punch and launching first.

While such benefits can be great for a business, an ITU application does come with a few down sides. First, they require more filings with the USPTO so are more expensive. Secondly, ITU applications can only be assigned in very specific circumstances and these restrictions can impact certain business sale transactions depending on how they are structured.

Additionally, certain types of rejections by the USPTO are harder to overcome with ITU applications, as these applications do not have the opportunity to move onto what is called the Supplemental Registry. The Supplemental Registry is a holding place for in-use applications whose marks have been deemed descriptive; with time and continued use they may be moved over to the Principal Registry.

Supplemental Registry registrations receive a registration number, they have access to federal courts, and they can be cited by trademark examiners against subsequently filed applications. They are not afforded certain legal presumptions (such as ownership and validity) and they do not confer nationwide rights. However, if it comes down to having a registration on the Supplemental Registry or no registration at all, the Supplemental Registry is definitely preferred. If an application receives a final rejection, the applicant must then make the decision whether to appeal (which is a time consuming and expensive process) or abandon the application altogether.

The biggest piece of advice I have for clients filing ITU applications is to always keep their eye on the ultimate goal, which is to achieve sales as soon as possible. Keep in mind that a registration will not issue until you have had sales. Additionally, having sales and filing a notice of use will switch an ITU application to an in-use application. This may come in handy in the event that the application receives a merely descriptive or geographically descriptive rejection, which then opens up the possibility of the Supplemental Registry.

One thing you want to avoid is waiting to launch your product or service until you receive your notice of allowance from the USPTO. While it may be tempting to do so, it really isn’t the best strategy and it only serves to delay the ultimate issuance of any registration. In the worst case scenario, it could lead to a circumstance in which the application has to be abandoned because use cannot be achieved before a rejection is deemed and the USPTO declares the application abandoned.   As long as the clearance search has not identified any previous users that might cause a likelihood of confusion rejection, an applicant’s best bet is to always be diligently working toward use.

Bear in mind, however: Trademark rights are created by your use of those terms to identify your goods or services and are not created by the piece of paper issued by the government.

By | October 31st, 2014|PATENTS|0 Comments

My take on Tesla

What’s really behind Musk’s blog post?

Kurt Leyendecker

Tesla Motors and its CEO Elon Musk made news in the patent and intellectual property world a few months ago with a company blog post entitled “All Our Patent Are Belong To You” (the error in the title is Musk’s, not mine). The post was most simply an indictment of the patent system.

The blog post waxes poetic about how the global threat from the internal combustion engine was far greater than any exclusionary benefit the electricity-powered Tesla might derive from its patents. Of patents he wrote, “Too often these days, they serve merely to stifle progress, entrench the positions of giant corporations and enrich those in the legal profession, rather than the actual inventors.” Boldly, he declared, “Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”

But wait! Let’s dissect this a bit. Musk is one of the shrewdest businessmen alive today.  He doesn’t do anything without considering how the move benefits his companies. Just recently, Musk convinced Nevada lawmakers to pony up about $1.3 billion in tax breaks to help build his battery plant. Is Nevada getting a significant equity position in Tesla for their investment? The answer is no!

Have we all forgotten the battery swap promise? About a year and a half ago at a stockholder presentation with Musk presiding, a Model S was driven onto the stage and magically, its depleted battery was replaced with a fresh one in about a minute. The actual swap, however, occurred underneath the stage away from the prying eyes of the press and audience. Where are the promised battery swap stations? Well, California changed its laws concerning electric vehicles and the battery swap capability was no longer necessary for Tesla to receive desired tax credits, so it quietly disappeared.

Ultimately, the great Tesla patent giveaway is for Tesla’s benefit. It boosts the company’s image among core supporters, and it might even give other auto manufacturers and suppliers pause before suing Tesla for infringement of their patents. Think of the PR nightmare, especially among the electric car faithful, of suing the company that magnanimously made all its patents available to everyone.

Of course, the patents themselves aren’t important to Tesla as they once were or might have been if someone else entered their space earlier and as aggressively. Tesla is now the 900-pound gorilla with knowhow, economies of scale, easy access to dollars, and market clout. Musk indicates in his blog the original reason Tesla pursued patents was to dissuade large entrenched competitors from entering Tesla’s space, but that this belief “couldn’t have been more wrong” because the competitors didn’t. Perhaps the converse is true: The patents helped dissuade competitors from entering the electric car market in the first place.

What is good for Tesla isn’t necessarily good for everyone else. Do patents really stifle innovation and award attorneys to the detriment of inventors as Musk contends? There are no doubt dozens if not hundreds of small – even tiny – companies across the country trying to develop new motor and battery technologies often funded by angels and venture capital. Do you think the founders and employees of these companies would toil to create the proverbial better mouse trap or that the angels would invest millions if the companies couldn’t prevent the resulting inventions from being used by the major industry players, including Tesla, without reasonable compensation? The ability for small players to protect their innovation spurs development, not the opposite.

Then there is the real question: Did Tesla actually free its patents to be used by all?  Musk’s statement was carefully worded. He didn’t say that Tesla would not sue someone who uses its technology, but that it would not sue someone who wants to use it in good faith. What does “good faith” mean? Does the fact that Musk wrote “wants to use” instead of just “uses” mean a company must get Tesla’s blessing before using Tesla’s patents? What isn’t said is whether Tesla will require a license before they let someone use their patents or whether it will require the user to pay Tesla a royalty. Making Tesla’s patents available for licensing isn’t all that unique: Many companies make their patents available for licensing.

Would you be surprised to learn that since Musk declared patents a hindrance to innovation on June 12, the company has had at least 13 patents issued, and that the issue fees were paid to the U.S. Patent office AFTER the blog post and Tesla’s monumental policy change?

I think the one thing we can reasonably conclude from Musk’s post is that the patent plaques that adorned the lobby at the company’s headquarters have been taken down.  Perhaps the blog post should be rewritten with a new title, “We Remodelled Our Lobby.” For some reason, I think such a post would not have received much attention.

By | September 22nd, 2014|PATENTS|0 Comments

The K-cup story

Many years ago, John Sylvan had an idea: provide a hermetically-sealed, compact cartridge containing a filter and enough ground coffee to brew a single serving in a specially designed brewer. After the freshly brewed coffee was delivered, the remaining carcass would simply be discarded without fuss or muss. Sylvan’s brilliant idea came to him in the mid-80s. He did not begin working on the idea in earnest until the 90s. John and the company he formed had the forethought to apply for patents on his innovation.

Keurig, named after the Danish word for excellence, toiled through the 90s funded almost exclusively by investors perfecting the cartridge, which came to be known as the K-cup, and its associated brewer. John and his fellow founders were able to convince the investors that the benefits of the K-cup system far outweighed the simple fact that a cup brewed with it cost five-to-10 times as much as a traditionally brewed cup. Truth be told, the otherwise visionary investors really only saw a play for the corporate/office market where convenience outweighed cost: a niche market in the multibillion dollar coffee industry but one with potential sales at least in the tens of millions annually.

Around 1998, when Keurig finally started selling brewers and K-cups in earnest, it registered trademarks for the brand names. When the system took off, the competition was left scratching their heads. A new product segment had been created, one with terrific margins and one in which purchasers of Keurig coffee makers were forced to buy consumables from Keurig itself. The strong patents coupled with Keurig’s aggressive enforcement stance contrasted with the time, cost and uncertainty in developing a suitable non-infringing alternative, left potential competitors with no other alternative than to figuratively beg Keurig for a license to make their own versions of the K-cup.

Keurig and its successor in interest Green Mountain Roasters, who bought the company out in 2002, were under no compulsion to grant patent licenses, but wisely realized it was better to derive revenue from its competitors than to back them into a corner and force them to try and develop a K-cup alternative. If successful, the competitors would have jeopardized the company’s future. Keep your friends close and your enemies closer: The maxim rings true in business as well.

The Keurig system found a place not only in the office and commercial markets but in homes as well. The K-cup system has proven to be the biggest thing to hit the industry since Mr. Coffee killed percolators in the 70s.

One might figure Sylvan became a wealthy man. Sadly, inventors and innovators often do not make great businessmen. He had trouble getting along with the investors and was forced out for a mere $50,000 shortly before the company’s first production commercial brewer was released. In hindsight, perhaps he should have demanded a percentage. Suffice it to say, the sharks freely roaming the ocean of commerce aren’t as tame as those kept in primetime tanks.

As the product grew, Keurig continued to innovate and protect the improvements to the brewers and the K-cups. Even though the seminal patents were strong, they realized it would expire someday. Hopefully, however, improvements to the K-cup would mean competitors’ post patent cartridges would remain a step behind the K-cup in terms of cost, functionality and quality. To date Keurig has been issued 44 patents in the United States and has more pending all related to their K-cup cartridges and the associated brewers.

Patents weren’t the only intellectual property trick up Keurig’s sleeve: they also had trademarks, and trademarks don’t have expiration dates as long as you keep using them. Currently Keurig has 15 registered United States trademarks and about 35 more pending.

When the company’s initial patents expired in 2012, many articles predicted Keurig’s decline. Keurig’s competitors still face major obstacles. Any systems and cartridges they may develop might not infringe the expired patents but they have to be very careful not to infringe the remaining 40-plus patents. While the remaining patents are much more narrow, they do lay a minefield that competitors must navigate in developing their non-infringing alternatives, greatly increasing the cost of development. Stepping on a mine can mean an expensive lawsuit.

Even if successful in developing a suitable K-cup alternative, competitors don’t have a word or phrase to describe their coffee cartridges. If a competitor strays and improperly insinuates some connection with K-cups or Keurig, the company, which is now the 500-pound gorilla in the coffee industry, releases its pack of lawyers to shut things down.
If a competitor stays clear of the Keurig marks, it faces the monumental and uncertain task of educating the public about a new single serving cartridge without reference to the original – all at great expense and huge risk of failure. Ultimately, most of the industry players have or will decide to go the certain and predicable route of licensing Keurig’s technology and trademarks adding even more money to its $4 billion-a-year revenues.

Would there be a Keurig or even a single-serving coffee cartridge today if they had not pursued intellectual property protection? Its seminal patents helped garner investors in the 1990’s permitting the system’s development. The patents kept competitors at bay during its growth years of the 2000s.

Today, as the industry leader, its trademarks and patent portfolio continue to thwart competitors and allow it to maintain its position as the market leader. Sometimes my start-up clients ask me whether it is worthwhile to pursue patent protection on their idea. All I need to do is look over my shoulder and point to the coffee machine on the credenza and say, “Yes, it is.”

Internet marketing and trademark trouble: Somebody else might be using your biz name

n the not so distant past, marketing and advertising a business was a particularly challenging and daunting task. Local businesses relied heavily on Yellow Pages advertising, radio and television. They had to decide how large a listing, under what categories to be listed, and/or how comprehensive a broadcast campaign they could afford.

The cost could be substantial and no matter how large the listing, the amount of information conveyed was relatively small. Depending on the product and services, the businesses might also have to print brochures to be handed out or mailed to prospective consumers. If a mistake were made, the businesses would have to wait an entire year to make corrections.

Businesses with a national or international scope didn’t fare much better. They had to choose from a dizzying array of options to promote their products and services from magazines, trade shows and listing directories. The mailing of brochures and other comprehensive information to inquirers was a necessity even when the majority would never purchase anything. Small businesses could rarely afford to saturate all possible avenues, so deciding where and how to spend marketing dollars was of crucial importance. Pick the wrong advertising mix and a business might not be able to survive long enough to stumble onto the correct formula.

The Internet changed all this. In a relatively short period, a company’s Website replaced the Yellow Pages listing, the magazine ad, brochures and informational material. SEO specialists tailored Web pages to provide companies with prominent listings on Google and other search engines.

Websites replaced the Yellow Pages and industry specific directories for consumers looking to find providers to meet their needs, wants and desires. Many companies now pay Google and the others to provide links to their websites. More and more prospective customers use Google in place of phone and other industry specific directories. Whether it’s a local search or nationwide, search engines can provide the answer.

There are some drawbacks, however, to this brave new world of marketing. Most obvious is the enhanced competition and the increased amount of time and money spent on optimizing a website. The less obvious disadvantage is the risk of being accused of trademark infringement. Before the Web, it was not uncommon for businesses with similar names and similar products and services to co-exist, each plying its trade in different parts of the country blissfully unaware of the other.

Twenty years ago, a fictitious restaurant named Lights On Broadway could have co-existed in numerous locales across the country, but since local customers expect that they can look up information about a restaurant online, a website is a necessity. Sooner or later owners with businesses with the same name stumble upon each other over the Internet. Often one sends a letter to the other accusing the other of trademark infringement.

The scope of this column does not permit a discussion of all the legal complexities that ensue. Suffice it to say, the costs of resolving the matter can be substantial not only in legal bills but also in the loss of goodwill and name recognition if one of the businesses has to rebrand.

Recognizing the potential risks, there are a few things businesses can do. Initially, in choosing a business, product or service name, a business would be advised to conduct a national trademark search to identify whether there are other businesses using a similar name that could prove to be problematic down the line. Choosing names and trademarks that are more arbitrary and fanciful opposed to those that are descriptive or suggestive makes good sense: think Xerox (a made-up word) to Duplicators for copiers, for instance. Avoid names that are plays on common clichés: they may be clever, but the probability is often high someone else will be similarly clever.

If the business is already a going concern and especially if its trademark is one that might be shared by other businesses around the country, plan for an eventual dispute. Sadly, prevailing in a trademark dispute often comes down to who has the most money to defend or advance its position and not who is the senior user of a particular name.  Being in the right is cold comfort if your business does not have the capital to defend your rights.

At Leyendecker & Lemire, we regularly counsel clients to create a legal rainy day fund. We know very few ever do, but if and when a trademark dispute arises, it is much easier and even axiomatically often less expensive to resolve a case to a client’s satisfaction if the business can afford to assert its position. Some of the money saved canceling or downsizing the large Yellow Pages ad might be best socked away for future legal expenses.

While marketing and advertising in the 21st Century may seem simpler than it was in the last century, in reality, old challenges have been replaced by new ones. The key to success is often anticipating and adapting to these new challenges just a little bit better than the competition, and one of the biggest of these new challenges is that something as simple as choosing a business or brand name has become much more complex in consequence.

By | March 20th, 2014|TRADEMARKS|0 Comments

Can I Patent That?

A question I frequently get from prospective clients is, “Is my invention patentable?” Variations on this inquiry include the following:

• “Can I patent an improvement to a device that is already available?”
• “Is it correct that in order for something to be patentable, it has to be at least 10 percent different than the known device from which it is derived?”
• “Can I get a patent on something that is already on the market, but I am using it in a new manner?”

The scope and breadth of what is patentable is very broad and wide. Chances are if your invention is useful, new (also referred to as “novel”) and not obvious, it is patentable.

Patents protect the rights of inventors to exclude others from making, using, offering for sale, or selling their invention throughout the United States or importing it for a specific period of time. Most people know this. But ask the same people what an invention is, and more often than not, the response will be much more narrow than is actually the case.

The prototypical invention is a completely new widget, tool or device that does something or accomplishes a task better (faster, easier or cheaper) than whatever was done before. In popular imagination, the likes of Thomas Edison remain the prototypical inventor: a person sitting in his lab, garage or workshop dreaming up ways to solve the world’s problems. Factually, however, the prototypical invention and the prototypical inventor are the exception rather than the rule.

Given the foregoing, perhaps the next question is: “What exactly is considered an ‘invention’?” You would think that this would be an easy inquiry to answer, but that would be wrong.

At its broadest according to Merriam-Webster, an invention is “something invented,” which requires us to look up the meaning of the verb “invent,” which is “to produce (as something useful) for the first time through the use of ingenious thinking and experiment.”

Putting this together, an invention is something new and useful invented by a person, and it can be anything from a new drug to a new medical device to a gardening tool to a manufacturing process to a musical composition. In other words, an invention may improve upon or create a new process, machine, device, product, result, function, discovery, art object—or even a genetically modified plant. Often times companies overlook patent protection because they do not consider the item or process an “invention.”

For example, even if the ultimate product is not patentable, the specific process, tool or machine that you use to make it is. If that process, tool or machine yields a product or result that is faster, cheaper or better than patenting the process, tool or machine may have enormous value to your company as you can prevent others from doing the same thing. This can give companies a competitive advantage in the marketplace, especially in mature industries.

If you think your invention is patentable, by all means protect it. Consult an attorney. The next step is to obtain a U.S. patent for your invention, which is the granting of a property right to the inventor(s), issued by the U.S. Patent and Trademark Office. Contrary to popular belief, new patents are issued all the time to ordinary people, just like you, with not-so-ordinary ideas.

By | March 6th, 2013|INVENTION PROMOTERS, PATENTS|0 Comments

File that Patent! Time is Running Out

Do you or your company have a product or process that you’ve been developing for some time but have yet to patent? If so, a new law could considerably affect your ability to patent.

In 2011, Congress passed the America Invents Act (AIA), with the provisions of the act to be amended over time.  The most significant provision takes effect on March 16, switching the U.S. patent system from a first to invent paradigm to a first to file paradigm. This change brings U.S. patent laws in this regard in line with those of almost every other industrialized nation.

Under the old paradigm, the pertinent consideration in awarding a patent to one person over another was when the inventor first conceived of his or her invention. Conception of an invention occurs the first time an inventor mentally envisions the invention: in other words, the “ah ha” moment. At this moment, the inventor might not know exactly how the invention will work or be implemented, but the invention is formulated in her mind to a sufficient degree. It is considered a sufficient degree if the details of the invention can be disclosed to someone of at least average skill in the particular field to which the invention pertains, and this person could, through the development process, make or implement the invention.

After conception, an inventor is required to reduce the invention to practice. This can be accomplished in one of two ways: by actually making or implementing the invention or by filing a patent application. Providing the inventor is diligent in developing the invention from conception through reduction to practice and files a patent application, she will be awarded a patent over co-pending applications by inventors who later conceived of a similar invention. The foregoing is the case even if the other inventors actually filed a patent application first.

All this changes on March 16, when only the inventor who first files a patent application on a particular invention will be eligible for a patent. If you file your application on March 17, it will not matter at all that you have been working on the invention diligently for years. Rather, someone else who first conceived of the same invention independently of you only a month ago, but files a patent application before you on March 16, will be awarded the patent.

The new first to file paradigm will change the inventing process in the United States. For instance, in my firm’s practice, we will be recommending that clients file patent applications sooner rather than later, even if there are a few bugs to be worked out in a particular invention. In the past we often recommended the inventor perfect his invention before filing, since the filing date was not wholly determinative of patent priority. If the invention changes after the application is filed, an additional sibling application can be filed to incorporate any new or different features. Inventors will also be encouraged to more quickly reduce an invention to practice, compressing development times as much as possible.

For smaller companies and independent inventors, the new paradigm may prove more costly, requiring more resources to be expended on development and requiring filing of additional patent applications as a new product morphs into a final design during development. Certainly, these changes favor larger entities with substantial product development and legal budgets.  However, large companies are also often bureaucratic in nature and take longer than they should to accomplish even the most sensible tasks, so their new-found advantage may not be fully realized.

Nevertheless, this column is a call to action for any company or individual that has a product or process that they have been developing for some time to consider filing a patent application on the invention before March 16, thereby preserving first to invent status for the invention.

As the lead times in drafting a patent application can be significant, the sooner you discuss your situation with a competent patent attorney the better. Filing before March 16 instead of after could make all the difference in whether you can ultimately receive patent protection.

By | January 21st, 2013|PATENTS|0 Comments

Does Tim own Tebowing?

And does this mean you can’t do it any more?

Has a trademark taken Tebowing off the table?

The short answer: No. Neither Tim Tebow nor any business entity with which he is involved owns a trademark on his signature move.

Interestingly, headlines just a week or so ago may have indicated otherwise. The opening line of the widely carried AP story reads, “Dropping to a knee like Tim Tebow might cost you now.” And an article on Yahoo Sports proclaimed, “We can argue that the intention of prayer shouldn’t be a copyrighted exercise, but Tebow’s legal and business acolytes would clearly disagree.” That particular author went on to write, “Genuine gesture or patent offense? The latter, we suppose.”

This kind of misreporting as it pertains to trademark law frustrates intellectual property attorneys, though maybe it shouldn’t. So long as lay people don’t understand intellectual property law and don’t know the difference between trademarks, patents and copyrights, my job is safe. And having a safe job in this economy is nothing to scoff at.

However, let’s set the record straight.

Tim Tebow’s marketing company XV Enterprises LLC, filed a number of trademark applications last year to protect use of the word, “Tebowing” to identify a number of products.  The application pertaining to the use of the mark to identify hats, shirts and t-shirts has been approved by the United States Trademark Office, and barring some unforeseen event, should issue in the next month or two. Once issued, selling t-shirts under the Tebowing name by anyone but Tebow himself will be infringement of a federally registered trademark.

Trademarks protect words and logos, often referred to as brand names, used to identify a product or a commercial service. They exist to prevent unscrupulous parties from trading off on the goodwill associated with a particular product or service as developed by another company.   Imagine if there were no trademarks and every soft drink company was able to call their cola, Coco Cola, and package it in the same manner as the real thing. When you went to buy a Coke, you wouldn’t be able to ascertain whether or not the cola on the shelf was the drink you know and love or some foul tasting knock off. Thankfully, because of trademarks, when you want a Coke and you buy a Coke, you can rest assured that it is a Coke.

Trademarks do not and cannot lock up the rights to non-commercial expression. They can’t prevent someone from selling a particular product or offering a particular service. They can only prevent people from using a particular name or logo to identify a product or service. Copyrights on the other hand can protect expression, but only an expression that is fixed in a tangible medium.

The act of Tebowing is not fixed in a tangible medium just as your strumming of Stairway to Heaven as you attempted to play the guitar so many years ago was not an infringement of Led Zepplin’s copyright. The act of Tebowing isn’t protectable by patent either, which requires a patentable method to be useful and have a tangible non-abstract result. While those partaking in Tebowing might take exception to any determination that the act is not useful, patent law is interpreted in relation to our physical existence and not benefits received or felt ethereally.

The moral of the story?  When you buy that Tebowing baseball cap, you can rest assured it’s backed by the original Tebower himself. And if this makes you want to fall down on one knee in prayer, feel free, because no one is going to stop you.

Kurt Leyendecker is a founding member of the intellectual property law boutique, Leyendecker & Lemire. Leyendecker & Lemire specialize in patents, trademarks and related complex civil litigation. Kurt Leyendecker can be reached directly at 303.768.0123 or kurt@coloradoiplaw.com.

 

By | November 19th, 2012|TRADEMARKS|0 Comments

Avoidance: Understandable, but Often Painful

This is about pain — the avoidable kind.

Lawyers can get a bad rap for shark-ism and sometimes, that’s fair. In this case, however, the pain is shared across the board, by both the lawyers and the clients. No one, including a hard-working and ethical attorney, likes seeing people have to spend blood, time and money on heartbreak and angst that is fairly easy and cheap to avoid.

Our firm has been involved in a number of litigations that were very costly to our clients, but which could have been avoided. For the most part, those costs could have been side-stepped if the clients had engaged an IP attorney to help them set up intellectual property policies and procedures; properly protect the intellectual property (IP); and clearly define ownership.

Human nature being what it is and cash always being tight in a young growing company, non-essential tasks and expenditures are often put off as more pressing fires are fought. This short-sightedness, however, can come back to haunt. It can be painful to witness.

The math is simple: An IP attorney review of website content may cost up to $1000, depending on its size. However, if one or more third-party photos are found on the site, an expensive five- or six-figure copyright infringement settlement could be immediately eliminated.

Moreover, seeking the blessing of an IP attorney and filing for trademark registration before settling on a brand for a new product or service might set an enterprise back less than a couple thousand dollars, but could save hundreds of thousands of dollars in litigation when, for example, a well-heeled competitor decides the brand is too close to one of theirs.

Registering copyrights for important materials and images typically cost a few hundred dollars each. It’s money well spent. Doing so can deter competitors from copying all or in part of the fruits of a business’ hard work and expenditures. Infringement could cost $150,000 per instance in statutory damages.

A business that institutes and follows a trade secrets policy that includes non-compete agreements with key employees might cost a few grand, all said and done. However, instituting a trade-secrets policy could prevent employees from being able to take specific knowledge learned while employed to a competitor. Not doing so, can cause a business to lose a competitive advantage worth hundreds of thousands if not millions of dollars over time.

Having clear and concise intellectual property clauses drafted for use in contracts with third party contractors sets an organization back a few saw bucks. Alternatively, the matter often ends up in federal court as the business and the contractor both claim ownership to a valuable piece of IP. If lucky, the experience will settle before trial and a company may only be out a $100,000 or so.

Many a wise business owner understands these warnings, but immediate demands call out.  The phone rings or a colleague comes into the office, or a deliverable needs immediate attention. Several years later, a complaint and the prospect of spending hundreds of thousands of dollars defending the company in court presents itself.

Sometimes an ounce of prevention truly is world’s better than a cure. No one likes to watch money eaten up after-the-fact on avoidable circumstances. IP protective measures can and often are an easy and preventative business strategy — and the truth is that everyone, including good lawyers, feel better about that.

Kurt Leyendecker is a founding member of the intellectual property law boutique, Leyendecker & Lemire. Leyendecker & Lemire specialize in patents, trademarks and related complex civil litigation. Kurt Leyendecker can be reached directly at 303.768.0123 or kurt@coloradoiplaw.com. Visit www.coloradoiplaw.com for further information, including Leyendecker & Lemire’s weekly blog, “Control, Protect & Leverage.” 

A grape by any other name is still a grape…

 

When launching a new company or adding a new product or service, a name must be determined to brand the company, product or service. In the legal field, we refer to brand names and logos identifying a good as a trademark; and brand names and logos referring to services as service marks. However, the term “trademark” is often used generically to refer to either trademarks or service marks.

Hopefully, your chosen trademarks help your company capitalize on the marketing, advertising and goodwill generated by providing a desirable product or service in the marketplace. Trademarks identify your company, its products and services. Those customers who have positive impressions will seek you out and fuel your company’s economic well being — and the trademark helps sell all of that economic vibrancy.

Picking an ideal name or mark is usually hard, but it needn’t and shouldn’t be. There is no perfect name or brand. Rather, the value of the brand is developed over time by providing a quality service or product that cements a favorable association in the mind of the consumer with the trademark.

Would Amazon.com be less successful and prominent today if its name was Gigantous.com? How would a branding expert have critiqued Jeff Bezos’ Amazon moniker?  The expert might have cautioned Bezos that the name was too gender specific and would run the risk of alienating some men: Amazon refers to a mythological nation of warrior women. Perhaps the expert would have been concerned that the term would cause a negative association with the Amazon river and the famous man-eating fish that inhabit it: To most of us the thought of falling into the Amazon river and being devoured by a ravenous school of piranha is not a good one.

Yet Amazon.com is the name of the company and despite the potential negative associations the company has become for many the go-to internet locale for books and all matter of goods. Be honest: When you think about the term, “Amazon,” the association that first pops into your head isn’t warrior women or the South American river. The reality is that if Amazon.com was Gigantous.com instead, it would have made little difference. We would just associate Gigantous.com as the “go-to internet locale for books and all matter of goods.”

The most important consideration in choosing a name is simple: make it unique and different from all others in your company’s field or space. The more unique and different your mark is the better. In most cases, you want to stand out from the competition so that the goodwill derived from your marketing and advertising efforts, your customer service, your unique and superior products and/ or services accrue to you alone and not to the competitor down the street. Some of the best brand names provide no suggestion as to the associated goods and services offered under the brand.

An alien flying in from Mars that has a perfect grasp of the English language but no knowledge of our commerce wouldn’t correctly associate particular goods or services with trademarks like Google, Apple, Xerox, McDonalds and Amazon yet I am certain you would. The values in these trademarks aren’t the names themselves but the goodwill developed over the years. For example, Apple in a few short years through savvy marketing and promotion has convinced all of use to associate the brand with cell phones.

On the other hand ubiquitous trademarks can be extremely problematic especially if the adopter of a largely descriptive mark is a newcomer or smaller market player. Years ago, Homebase was a home improvement store that had a significant presence in Colorado and some other states, but it was no match for the much larger Home Depot. In my part of town, the two stores were located a mere couple of miles apart.  Even though I knew the two apart and favored one over the other, I still had to stop and think when talking to neighbors and friends about where I purchased a new piece of lawn care equipment. And I am certain that more than once I got it wrong. How much of Homebase’s advertising and marketing actually drove confused consumers to Home Depot and how did this confusion ultimately contribute to Homebase’s demise?

Finally and perhaps most important: Your company’s marks should be Google friendly.  Today, a consumer is more likely to consult a search engine to find a company or a particular product instead of the phonebook or even an online directory. If your trademarks are comprised of common descriptive words, chances are your product name may not even pop up on the first page of search results. Ideally, any trademark name you choose should be unique and different enough that when the mark is typed into a search engine relevant information appears prominently on the first page of results.

It’s ultimately not really the perfect name or trademark that scores the big recognition; it’s excellent products and services, coupled with strategic advertising, superior experience — all delivered over time.

This column is also available at Colorado Business Magazine.

Economic Lemons = Lemonade Profits

Last summer my nine-year-old twins set up a lemonade stand and sold the yellow elixir to thirsty Parade of Homes passersby. They learned the thrill of running their own business and having people buy and enjoy their wares. They learned about the cost of raw materials and pricing their product to make a profit. They learned about sitting around and persevering during the slow times waiting and hoping for busy times. And they learned how to make money apart from a wage handed down from an employer. For a brief few hours they were self-employed.

Our forefathers were also “lemonade-stand” immigrants, pioneers, and refugees, and most all of them succeeded, in some fashion, in creating a better life for themselves and their families. We were a nation of adventurers willing to strike out into the unknown and take chances on an uncertain future with dreams of prosperity. This came naturally to us: Our ancestors risked death on the high seas crammed into the bowels of often barely ocean worthy craft — all for the dream of a better life away from the rigid class structures ofEurope. They were of a different sort or breed compared with those who stayed behind. They were adventurers who were willing to take big risks, even facing death, on the hope of future rewards even if uncertain, improbable or unknown.

Over the last sixty or seventy years as we have reveled in our prosperity, we have largely lost it: the drive, determination, grit and tolerance for uncertainty that propelled us here. We go to college, get a degree and hope to find employment at a large corporation that will pay us well and give us a nice benefits package. If we get laid off, we look to the government for an unemployment check. Most of us don’t even know how to be self sufficient. To be fair, our technologically complex society has at least something to do with it: Many of us have specialized professions that do not easily translate into a skill or vocation outside of a bureaucratic company or the government.

At the start of and well into the 19th Century our forefathers and mothers moved West in search of a better life. And as it is with all who strike out from the comfortable and familiar, many failed. But some succeeded. Collectively, they built new towns, cities and states, and created wealth and prosperity where there was none before. In the East, a merchant class arose, following in the footsteps of renegade entrepreneurs like John Hancock who helped free the nation from rigid and stifling constraints of stuffy oldEngland. Our eastern cities began to rival those ofEurope and a new class was created: a large and prosperous middle class.

Around the turn of the last century, entrepreneurship exploded in this country as the industrial revolution spurred economic growth. And we invited in the people of the world who were fleeing economic desperation and political strife in their homelands. The immigrants didn’t just work for the corporations, they started new businesses: restaurants, ethnic delis, service stations and so many others that served the growing populace. My grandfather was among them: He leftGermanyin the 1920s. He started a nursery lost it and then started another business. As a kid, I remember him and several of his employees loading into a landscaping truck filled with rakes, lawn mowers and shovels and driving off to preen the manicured lawns ofLong Island.

Solving our country’s economic problems may well be within that lemonade stand. The way we grow our economy and as a society depends upon our ability to innovate and move forward. And for this we need people who think outside of the box and are willing to risk failure for the reward of self-determination. In the sixteenth century, they were called explorers. In the  seventeenth and eighteenth centuries they were called colonists. In the nineteenth century, they were pioneers, and for the last hundred years we have known them as entrepreneurs. Perhaps the lemonade stand will help my kids realize that they do not need the safety of a regular paycheck to survive and prosper but that all they need is a belief in themselves and their abilities.

And perhaps it is never too late for all of us to realize, explore and, once again, embrace these lessons.

[This column can also be viewed on ColoradoBiz Magazine’s web site.]

By | March 28th, 2012|PATENTS|0 Comments