Securing Trademark Rights For Your Startup

Branding in the Digital Age: The Role of Trademarks in Securing Your Brand

Trademark rights exist primarily to avoid consumer confusion. They prevent two companies from selling competing products that use similar marks. With the rise of e-commerce, however, enforcing trademark rights, or even securing your desired trademarks for a brand, has become much harder.

Now that putting up a business online is as easy as one click, it is crucial for startups to secure trademark rights as early as possible so they could penetrate the online market with solid branding. Registered trademarks can set you apart from many competitors in both the digital and traditional retail world.

The Role of Trademarks in Branding

A trademark is a word, phrase, design, symbol, or a combination of these elements that distinguishes products of one party from those of others. When you register a brand’s trademark with the United States Patent and Trademark Office (USPTO), you get exclusive rights to use, license and sell the mark. From a branding perspective, you get to secure the marks that will represent your goods and services for a long time.

Not every mark, however, can be registered with the USPTO. The agency examines every trademark application. It can refuse registration if there’s a likelihood that your mark may be confused with an already registered mark or one that is pending application by another party.

USPTO establishes that the probability of confusion exists when the marks are similar and the products or services are closely related to each other that consumers could mistakenly assume they come from the same source.  

  1. How Are Marks Similar?

Marks do not have to be identical to be considered confusingly similar. They are regarded as similar by the USPTO if they:

  • Sound alike when spoken, even if they are spelled differently
  • Are visually similar even though they use different fonts
  • Are similar because they have the same translation in English
  • Include the same design element
  • Convey the same meaning
  1. How Are Goods or Services Related?

Not all similar marks are confusing. The likelihood of confusion exists only if the goods and services the marks represent are also related to some extent, making consumers think they all come from a single source or company.

For example, you can’t apply for a trademark for your banking services if the USPTO finds a similar registered mark (or mark pending approval) used by a company offering mortgage lending services in the country. Although banking and mortgage lending services are fundamentally different, the issue is not whether consumers would assume the services are the same but whether they would think the service provider is the same.

The Importance of Trademarks in the Digital Age

If you’re a startup owner who wants to secure your exclusive rights to a brand name or logo, you must act quickly. For every minute you wait, there’s a chance that another business owner offering the same product as yours is filing an application at USPTO for a similar mark.

Securing your trademarks early also gives your business a few advantages, such as:

  • Geographic Advantage

Common law or unregistered trademarks provide brands some degree of protection under state-based laws concerning unfair competition. If you’re the first one to operate a coffee shop in your town under a brand name “Coffee House,” you may stop another café with a similar name to open in your area even if you haven’t registered your brand name with the USPTO.  States with unfair competition laws may see the second café as a harm to the first business by confusing the consumers in the local area.

You may think you don’t need to register your marks today as you only operate online. However, when you want to expand in the future by having physical stores in different states, having an unregistered trademark can bring marketing and legal problems. You cannot operate in areas where there are businesses that bear marks similar to yours, limiting your opportunities to tap another market.

On the other hand, when you register a national trademark early, you have the advantage to penetrate different markets across the country. Even if you don’t get to operate in an area where a similar brand name is protected under state laws, you get to stop that brand from giving you the same legal problem elsewhere.  

  • Licensing Advantage

As mentioned, USPTO trademark registration gives you the exclusive rights to license your mark. Licensing rights play a crucial role in your business if you want to turn your company into a franchise. Franchisees would have a difficult time operating in various local areas without national trademarks protecting them. Similarly, having trademark rights is a must if you want to sell or merge your company.

  • Infringement Protection

The internet gives small business owners a double-edged sword. On the one hand, it makes it easier for you to start selling your products to a vast market online, but on the other, it provides a whole set of trademark infringement problems.

For instance, in the world of e-commerce, anyone can use your marks as domain names or social media pages if you haven’t set up a website or Facebook or Instagram profiles yet. Even if you’re the first to use the mark online, there’s no state-based unfair competition law to protect you. When you register your trademark, you can enforce your rights, and even file a lawsuit against infringers.

Determining trademark rights on the internet is a developing area of law. The law hasn’t clearly defined the geographic limits of a trademark used in e-commerce platforms and other sites. For your protection, it is best to register your marks and exercise the following measures:

  1. Actively monitor online infringement.  Depending on the nature of your goods, a violation may occur through social media sites, pay-per-click advertising, and domain or cybersquatting. Make sure to conduct a regular search online to see whether someone has been using marks similar to yours on their websites, e-commerce pages, or social media profiles.
  2. Take advantage of take-down processes. Twitter and other social media companies provide take-down procedures in case of trademark infringement. Check the FAQ sections of such companies to see detailed instructions on how to remove infringers on their platforms.
  3. Ask a lawyer to help. For severe or widespread infringement, it’s best to hire a lawyer to help you come up with a formal enforcement program. An attorney whose practice includes intellectual property law can help you determine the right legal actions to take.

The internet has made it easier and faster for you to tap a vast market and grow your business, but it has also made it more difficult to protect your brand’s trademark rights, especially if you haven’t registered it. File a trademark application at USPTO to promote and sell your products freely online and in physical stores, prevent legal problems, and protect your business interests in the long run.

This article is for informational purposes only. It does not contain legal advice, nor does it create an attorney-client relationship. If you want to know more about trademark rights, contact us today.

M22 Keeps Trademark Protection After Agreement with State of Michigan

After seven years of litigation at the Trademark Trial and Appeal Board, the Ingham County Circuit Court, and the US District Court for the Western District of Michigan, many, many, many sleepless nights, and some of our best legal work, the Attorney General of the State of Michigan has dismissed its trademark cancellation proceeding against M22 with prejudice.

The M22 trademarks are valid, registered, fully enforceable, and incontestible under the law.

Read the full press release below:

07 March, 2019

03/07/2019 Traverse City, MI —M22, LLC, the iconic northern Michigan outdoor brand, will keep its federal trademark protection for the M22 logo following an agreement with the State of Michigan.

In a settlement signed on Feb. 28, M22 released the State from any grievances or future suits in trade for the State dismissing all claims against M22. The settlement also entails that M22 cannot be challenged by the State again on the matter and retains full rights to protect its trademark for retail and apparel nationwide.

“This is a huge win for our customers and our team,” said Keegan Myers, co-founder of M22, LLC. “It’s been a long struggle for us, but we stayed with it because we believed in the strength of our brand and what it means to our loyal customers and employees.”

Brothers Keegan and Matt Myers founded the company in 2004. M22 first filed the logo for a federal trademark in 2006 and was awarded in 2007. After the US Patent and Trademark Office’s required five-year period of consecutive use, the trademark had become “incontestable,” the strongest status for a trademark.

However, in 2012 then Michigan State Attorney General Bill Schuette wrote an opinion claiming no entity could claim control over a highway marker design because it was public domain. This opinion kicked off a seven year legal contest at both the state and federal level.

Earlier this year, Attorney General Dana Nessel succeeded Bill Schuette, and her office re-examined the case, deciding not to move forward with litigation.

“We’ve believed that our position on the law has been correct from day one,” said John Di Giocomo, partner at Revision Legal and M22’s lead attorney on the case. “Now, seven years later, we are glad that the new attorney general has reviewed the case and has determined that it is not worth pursuing further.”

With the trademark undisputed, M22 will continue to protect the brand. The company holds several federal trademarks extending to any retail and apparel products as well as the M22 Challenge race. The trademark does not prevent businesses from using “M-22” to describe a location or directions.“

We’re thankful to have come to an amicable solution with the State of Michigan,” said Matt Myers, co-founder at M22, LLC. “We love our state, and our outdoor brand reflects the passion we have for northern Michigan and exploring its natural wonders.”

For more information about M22’s trademark or usage examples, visit m22.com/pages/trademarks.

Other M22 Posts

About M22

Founded in 2004, M22 is an outdoor brand dedicated to sharing adventure and exploration of northern Michigan. The company retails high quality apparel, accessories and adventure gear online and from its stores in Glen Arbor and Traverse City, MI. More at m22.com.

Media Contact:Keegan Myers, Co-founder, M22, 231-392-3555, k@m22.com

Thank you M22 for having faith in us and for your patience. #M22

For additional information, or if your business is facing a trademark cancellation proceeding, please contact our Trademark Attorneys with the form on this page, or call us at 855-473-8474.

eu copyright directive

What You Should Know About the EU Copyright Directive

What You Should Know About the EU Copyright Directive

In February 2019, the European Union finalized its proposal for reforming its copyright laws, titled “Directive on Copyright Law in the Digital Single Market.” If passed, this EU directive on copyrights could have far-reaching consequences for online service providers and managers of online communities.

This directive has not been signed into law yet. Later this spring, European leaders will take a final vote to determine whether it will become law. If the vote is successful, each of the EU member states will have two years to introduce supporting legislation in their own country.

What Does the Copyright Directive Say?

The directive comes at a time when EU leaders are working to modernize the copyright rules in the EU. Most stakeholders agree that updating these laws are necessary – the last overhaul of these rules took place in 2001. As a result, many of the provisions are relatively non-controversial updates matching the growth of technology.

For example, Article 4 clarifies that schools, universities, and educational establishments can make non-commercial use of copyrighted works, while Article 12 proposes granting sport event organizers copyrights over recordings of their own events.

Articles 11 and 13 have generated the most news coverage because they are the most controversial proposals in the Directive.

Article 11 would change current EU law by granting new rights to press publications for online use of the articles. Currently, authors assign copyrights to publications, which them must prove rights ownership for new works. The proposal would grant direct copyright over online use to these press publications. These rights would expire after one years. This Article specifically applies to journalism and does not apply to academic or scientific publishing.

Article 13 introduces significant new liability rules for online content sharing service providers, such as YouTube, Facebook, Twitter, and Instagram. These content-sharing services must license copyright-protected material from the rights holders. If it is not possible to license the material, and it is posted, the company may be held liable for copyright infringement.

To avoid liability, the company must demonstrate that it:

  • Made best efforts to license the work from the copyright holder
  • Made best efforts to ensure that material specified by rights holders was not made available, and
  • It acted quickly to remove infringing material once it was discovered.

For example, if Article 13 goes into effect and I upload a clip of Sylvester Stallone as Rocky running up the stairs to Facebook as motivation to get into shape, and if Facebook does not already have a license for the movie, it could be liable for this usage.

Article 13 of the EU directive would only apply to services that:

  • Have been available in the EU for more than three years or
  • Have an annual turnover of more than €10 million ($11.2 million).

This article would not affect “legitimate users,” and would permit people to use snippets of copyrighted material for criticism, review, parody, and pastiche.

The proposed Article 13 is different from “safe harbor” provisions under the American Digital Millennium Copyright Act. These provisions protect internet service providers from liability for copyright infringement as long as they:

  • Do not have actual knowledge that the material was infringing a copyright;
  • Are not aware of infringing activity; and
  • Act quickly to remove infringing material, once they are made aware of it.

However, under the new proposals, online service providers would have a new onus placed on them to catch work before it is uploaded.

Praise and Criticism of the Directive

Authors, composers, writers, journalists, photographers, as well as their representative organizations, such as the European Coalitions for Cultural Diversity, European Music Council, and Federation of European Publishers, support this law.

A letter from 30 such organizations submitted a Joint Statement on the EU Copyright Directive, arguing that the Copyright Directive is a “historical opportunity” that will “create a much-needed level playing field for all actors of the creative sector.

On the other hand, certain groups have come out with harsh words for the final text of the copyright directive.

The Electronic Frontier Foundation (EFF), a US-based nonprofit that champions individual privacy, free expression, and civil liberties on the digital world, issued harsh criticism, arguing that “the giant entertainment companies with unchecked power to exploit creators and arbitrarily hold back scientific research.”

This is because the proposed directive will effectively require online communities to invest in automated copyright filters to ensure that no user posts anything that infringes copyright. YouTube’s ContentID system currently in place, which scans uploaded videos against a database of copyrighted material, is an example of such a filter.

The EFF argues that, because the only companies capable of creating such technology are large American companies, such as Google and Facebook. These companies will be able to grow unchecked because no European company will be able to compete.

There is also a concern that this sort of filtering will also have an unintended censorship effect if a program decides that uploads are a match for known copyrighted works. While hosting companies would be required to have a complaint and redress system, this process would at the very least cause delay and user frustration.

Additionally, because online communities will also be required to make “best efforts” to license anything that individuals could upload to these sites, they will also be required to buy what copyright holders sell them or risk being liable for future infringement actions, at potentially high prices.

Finally, the EFF criticizes rules governing sharing news stories in online communities. Article 11 of the EU Copyright Directive requires that any link containing more than single words or short extracts from a news story must be licensed, with no exceptions. This provision could potentially limit the free flow of information regarding world events across online platforms.

This article is for informational purposes only. It does not contain legal advice, nor does it create an attorney-client relationship. If you regarding  copyright law, or other intellectual property matters, contact our experienced IP and Internet attorneys today with the form on this page, or call us at 855-473-8474.

e-commerce data breaches

You Need To Protect Your E-commerce Business From Data Breach Liability

Protecting Your E-Commerce Business From Data Breach Liability

Data breaches pose a significant risk to e-commerce companies. Although the internet has opened up an entirely new world, allowing entrepreneurs to make money online from the comfort of their own homes, it has also opened up potential serious new hazards of which all companies should be aware.

Businesses store a variety of different types of sensitive customer data, including:

  • Names
  • Birthdays
  • Email and mailing addresses
  • Phone numbers
  • Passwords, and
  • Credit card information

At minimum, a data breach can result in serious lack of trust on behalf of your customers. A worst case scenario involving sensitive financial information being leaked could be disastrous for a company. Unfortunately, data breaches are increasingly common – one insurer found that 47% of small businesses experienced a data breach between 2017 and 2018, while 44% of those businesses faced multiple breaches.

Here are some steps you can take to ensure that your company minimizes your risk of data breach liability.

Limit Collection of Customer Data

A great way to avoid potential serious consequences of a data breach is to limit what data you actually collect from customers. Many ecommerce businesses can get away with only having a customer mailing list, and do not need to collect names, birthdates, or phone numbers in order to notify their customers of new items in stock.

It is also a good idea to refrain from storing customer credit card information. Yes, it can be extremely convenient for customers to login and check out without having to re-enter payment details. However, by storing this information, you are setting yourself up for serious potential consequences if this information is leaked.

In fact, storing credit card data is a violation of the PCI Security Standards Council, an international group that creates standards for payment account security. These standards are adopted by every branded credit card company, worldwide.

If you want customers to be able to store credit card information, you can consider working with a third-party payment system, such as PayPal or Amazon Pay, which outsources the security risk to another entity altogether.

Use a Trusted E-Commerce Platform

You should also ensure that your website is hosted on a secure platform. Every web-hosting company should give information regarding customer site security so you can understand how your customer data will be safe.

For example, Wix.com uses Transport Layer Security, which is “the standard security technology for establishing an encrypted link between a web server and a browser.” By using a trusted and seasoned platform, you are getting the benefit of experience from thousands of other users. This will only serve to keep your customers safe.

Use SSL Authentication for Online Checkouts

By using Secure Sockets Layer (SSL) authentication, you will authenticate the identity of your business and encrypt data being sent from your customer to you. This prevents hackers from obtaining the data while it is in transit. Using SSL authentication is another requirement businesses must follow in order to be PCI compliant.

Keep Your Software Up to Date

You should regularly monitor your site and keep all patches and applications up to date. Older versions of particular programs may have “back doors” for hackers to sneak through. It can be annoying to reinstall security updates every time a new leak or bug is found, but by regularly updating, you will make yourself less of a target to hackers.

In addition, you should also use anti-virus software on all company computers and run virus scans on a regular basis. This software should also be regularly updated so that it can catch the latest threats as soon as possible.

Limit Access to Sensitive Data

Another way to protect your customer data is to limit who has access to it. Put a password on your sensitive files to prevent someone from accidentally stumbling into them. If it is not necessary to keep this data on your company’s internal network, consider storing it on a single computer.

Consider which employees have a need to know sensitive information, and then restrict access accordingly. You should also conduct employee training and have policies in place so that your staff does not email, text, or send private customer information through online chat programs, which may become compromised.

Regularly Backup Your Site

If your site is hacked or disabled, you do not want to have to start over completely from scratch. Having weekly or monthly backups saved will let you easily restore your site to what it was before the breach occurred.

Have Your Customers Use Strong Passwords

If you have an option for customers to login to access your site, you need to make sure they use strong password with a combination of numbers, letters, and symbols. By forcing customers set strong passwords, you are helping them keep sensitive data secure.

Invest in Small Business Cyber Insurance

Finally, in order to give yourself greater protection in the event of a data breach of your e-commerce store, you should consider investing in small business cyber insurance. These policies can cover the cost of notifying your customers, investigating the breach, and purchasing credit monitoring services for any customers who were affected by the breach.

Having a trusted insurance carrier to fall back on if the worst happens can help save you a lot of stress and demonstrates to your customers that you are doing everything you can to fix any damage caused by the breach. It is an excellent way to maintain goodwill among your customer base if a breach occurred.

Additionally, even if you are not currently dealing with a data breach, an insurance carrier can help alert you to updated best practices and new security threats as a way to avoid being hacked altogether.

This article is for informational purposes only and does not provide legal advice. Revision Legal has significant experience assisting e-commerce owners through selling their businesses, including negotiating deals, drafting purchase and sales agreements, and assisting with all manners of intellectual property transactions. In order to schedule an appointment with an internet lawyer, contact us today with the form on this page, or call us at 855-473-8474.

Michigan Trademark Lawyer

Trademark AttorneyRevision Legal’s Michigan trademark lawyers are experts in trademark law. Our Michigan trademark attorneys have handled trademark registration, trademark licensing, and trademark litigation in state and federal courts around the United States. Our Michigan trademark lawyers are licensed to practice in the state courts of Michigan, the Eastern District of Michigan, and the Western District of Michigan.

Revision Legal’s trademark lawyers are experienced in all manners of trademark prosecution, defense, and litigation, including:

  1. Trademark registration with the United States Patent and Trademark Office;
  2. International trademark registration;
  3. Trademark Trial and Appeal Board oppositions;
  4. Trademark Trial and Appeal Board cancellations;
  5. Trademark litigation in federal court;
  6. Trademark licensing and merchandising;
  7. Cybersquatting and trademark domain name disputes; and
  8. Trademark monitoring.

Our trademark attorneys regularly handle trademark clearances and trademark registrations, including complex and non-traditional trademark registrations. Our attorneys have represented some of Michigan’s most well known brands, ranging from multinational insurance companies, microbreweries, lifestyle brands, and startups.

If you seek a Michigan trademark lawyer, contact the attorneys at Revision Legal at 855-473-8474 or use the form on this page.

bittorrent copyright defense

BitTorrent Copyright Defense

BitTorrent Copyright Defense

Few things are more frustrating than being sued for something you were not aware was happening and did not do. Unfortunately, this is the situation that many individuals or business owners find themselves when they receive a letter from their Internet Service Provider (ISP) informing them that they are the subject of a copyright lawsuit.

Here is what you need to know about these cases and what your options are.

How BitTorrent Works

BitTorrent is a method for sharing and downloading large files online. There are a number of different BitTorrent programs out there, but they all work by breaking up large files into “bits.”

If you download this file, instead of receiving it from one source, you receive various “bits” from several other computers that have the same file. This lets large files be shared quickly among multiple people.

BitTorrent itself is not illegal – many companies use various protocols to share files internally or to make open source software available to the public.

However, not every file is shared across BitTorrent platforms with the permission of the copyright owner. Movies, books, songs, and television programs are often shared illegally.

Some copyright holders may ignore these downloads, or – as HBO does for Game of Thrones downloaders – send letters requesting that the activity stop. However, others take a much more aggressive stance.

Copyright “Trolls”

Copyright holders who are extremely aggressive in enforcing their copyrights in court are known as copyright trolls.

Although activity online, including downloading movies, television shows, or songs, seems to be anonymous, it is not. Copyright trolls are able to trace the IP address of the user completing the download. The IP address can translate to a physical address and an internet service provider.

With this information, copyright trolls are able to file a complaint in court and ask a judge to issue a subpoena ordering the ISP to turn over the identity of the account-holder. Even if the account-holder is not the person doing the downloading – a very real possibility – this person likely has information about whom the downloader is likely to be.

While this may seem like a fair and logical way to proceed, copyright trolls are infamous for spamming the federal court system with hundreds, if not thousands, of lawsuits at any given time. Some plaintiffs, such as Malibu Media, will sue only one defendant at a time, but others will file lawsuits against dozens of people at one time.

Because it is not humanly possible for these companies to proceed with every lawsuit against every defendant, it is becoming increasingly obvious to judges that these plaintiffs are only looking for quick settlements and to move on to the next victim. One judge issued harsh criticism of this practice last year, saying that the plaintiffs are treating his courtroom “like an ATM.”

In addition to Malibu Media, Strike 3 Holdings has also been actively filing copyright lawsuits in recent months. Both own copyrights to adult material, so the embarrassment factor of being associated with this type of case can encourage people to settle who may be otherwise inclined to fight.

Defending Against a Copyright Troll

If you are dealing with a copyright troll in court, you may be able to raise a number of defenses to fight the claims.

Someone Else is the Infringer

If you know for a fact that someone else did the infringing activity, you may be able to turn this person over to the copyright troll in order to redirect focus from you. However, this can be tricky because you may not want to throw a family member or an otherwise good employee to the mercy of the plaintiff. Occasionally in this situation, the person who actually did the downloading will agree to pay a settlement in order to avoid the risk to both the account-holder and themselves.

The Case was Filed in the Wrong Jurisdiction

In order for a lawsuit to proceed, the case must be filed in the proper jurisdiction. If you have never set foot outside of Michigan, you can not be sued for copyright infringement in Ohio.

Although copyright trolls claim that their methods of determining the location of the infringing activity is highly accurate, this is not necessarily the case.

If you are involved in a copyright lawsuit that was filed somewhere other than where your home is located, you may be able to have the case dismissed for lack of jurisdiction.

The Case was Filed After the Statute of Limitations Expired

A copyright holder must bring a lawsuit within three years; otherwise, they can not bring the case. If a copyright holder attempts to sue you for downloads they claim occurred more than three years ago, the judge can dismiss the case because the troll waited too long.

Settling the Case Outside of Court

Although it is not the answer for everyone, sometimes settlement can be the best option if you are being sued by a copyright troll. If you know that you were the one who did the downloading, you may decide to settle rather than risk paying attorneys fees and statutory damages for infringement.

You may also decide that you do not want any potential negative publicity for your company or yourself. While some judges will allow copyright defendants to proceed anonymously if the copyrighted materials are adult in nature, not every judge will. Rather than take the risk, some people will decide it is in their best interests to settle quietly outside of court.

Preventing Copyright Lawsuits

The best way to protect yourself from being faced with a copyright troll lawsuit is to limit the number of people who can use your WiFi. If this is not possible due to business requirements, you should educate your employees about using the internet responsibly and enact policies designed to prevent this kind of unauthorized use with company materials.

This article is for informational purposes only and does not contain legal advice. If you are being pursued by a copyright troll or have questions regarding  copyright infringement, or other intellectual property matters, contact our experienced Internet Attorneys today with the form on this page, or call us at 855-473-8474.

fair use

Fair Use: Four Factors To Consider

Copyright and “Fair Use”

Being sued for copyright infringement can be a serious matter. Civil statutory damages can be as high as $150,000 per infringement if you are found liable for copying someone else’s work without permission.

However, there are certain affirmative defenses you can raise that would “excuse” the infringing activity. Perhaps the most common affirmative defense is “fair use,” in which you are able to use the copyrighted material without obtaining permission from the copyright holder.

Four Factors to Evaluate Fair Use

Section 107 of the Copyright Act lists four factors that a court should use in determining if someone’s use of a copyrighted work falls into fair use of the work.

1. Purpose And Character of the Use

Courts will consider the purpose and character of the use, including whether the use was commercial in nature or for nonprofit educational purposes.

If I own the copyright on a picture I took, and a business uses that picture in its advertising materials without my permission, this could be considered infringement with no fair use involved.

On the other hand, if a student uses the picture as part of a project for class, the student’s use is more likely to be considered fair use of the photograph.

This is not to say that all commercial transactions are denied the ability to claim fair use. If a graphic artist transforms the photograph into something new and sells this new work, the artist may be successful in pleading a fair use defense.

This “transformative” element is particularly important in avoiding copyright infringement – if you want to use the work, you should add or build on it.

2. Nature of the Copyright Work

The courts will consider the nature of the copyright work, and specifically the amount of creativity that went into the creation of the work.

If the work is largely technical or a news item, such as a simple whitepaper, it is more likely that fair use defenses will be successful, than if the work requires a high degree of creativity, such as a novel or a movie.

3. Amount And Sustainability

Courts will look at the amount and sustainability of the copyright work that has been used.

If you use a small clip of a TV show, song, or movie in an advertisement, it is more likely to be considered fair use than if you use the entire work.

However, even using a small clip may be enough to amount to full infringement, depending on which portion of the work you are using, if it is “the heart and soul” of the work in question.

4. Effect on the Work’s Value

The courts will also look at the effect on the work’s value.

Courts consider both the effect of the defendant’s particular use, as well as the effect that such uses, if widespread, would have on the marketability of the original work in question.

Specifically, courts examine if the original work is losing, or could lose sales, if the use continues and is widespread.

An additional factor that courts typically consider is whether the work is properly attributed to the author.

There is not a specific formula that courts use to determine if the defendant in a copyright infringement case is covered under the fair use defense.

Instead, courts will look at all the facts in the case before making a decision. However, there are a number of scenarios that are more likely to sustain a fair use defense.

Common Fair Use Scenarios

Criticism, Comment, and News Reporting

In general, copyrighted works may be discussed and even sampled by critics. It is common for book or musical album critics to quote an author or songwriter when reviewing a work. Similarly, news reporters are generally allowed to show clips of television or movies, or play a portion of a song without permission from the copyright holder.

This type of fair use defense typically succeeds when there is something transformative about the use. The commentators copying the work are giving an opinion, comparing it to other works, or engaging with it somehow.

The fair use defense has been successful in situations in which the copyright holder attempts to silence critics of the work. Criticism is by nature transformative, so it is permitted under this defense.

Teaching, Scholarship, and Research

Academics are typically also allowed to use copyrighted works without gaining permission of the author.

Teachers are typically allowed to make copies of short stories, book excerpts, poetry, or song lyrics for students in class, up to a certain extent. However, they may not make unauthorized copies of entire novels to distribute to the class, unless those works are old enough to be part of the public domain.

Students and researchers may also quote copyrighted works in projects, reports, and dissertations because they are generally engaging with the work and transforming it into something new.

Parody

Parody, a subset of commentary or criticism, is one of the most common types of fair use defense. Under parody, the work is being used in a humorous way or for social commentary.

Parody requires a certain amount “borrowing” from the original copyrighted work in order to make a point, which is why it is generally permitted as a fair use defense.

Fair Use: Avoiding a Copyright Lawsuit

The best way to prevent a copyright lawsuit is to obtain permission from the copyright holder for your use. However, this is not always possible, especially if tight deadlines are creeping up or if you wish to criticize the content of the copyrighted work.

If you are unable to obtain the permission, the next best thing you can do is ensure that you are adding to the original work by transforming it into something new.

You should also be selective about which portions of the work you utilize. If you take too much, you use may be considered infringement, even if you are offering valid criticism or creating a thoughtful parody of the work in question.

This article is for informational purposes only and does not contain legal advice. If you have questions regarding copyright protection, copyright infringement, or other intellectual property matters, contact our experienced IP attorneys today with the form on this page, or call us at 855-473-8474.

cease and desist letters

Cease And Desist Letters: How To Protect Your Trademarks

Protecting Your Trademarks From Infringers

Trademarks are an important way to protect your brand’s reputation. They also protect consumers because trademarks allow consumers to determine the source or origin of goods or services.

Filing for trademark protection is the first step in enforcing your brand rights. However, in order to maintain protection your brands, you must diligently monitor third party use of these marks and pursue infringers for their illegal use of your brand.

Here are some tips for monitoring and enforcing your trademarks.

Monitoring for Trademark Infringement

The internet makes it easy to conduct searches for potential infringement of your brands. You can set up Google alerts to automatically tell you if your brand names, or similar brands are appearing in the news, on blogs, or on other sites.

You should also make it a regular practice, either once a month or more often, to conduct manual searches of sites allowing individuals or companies to list products, including Amazon, Ebay, and Etsy. Do not forget international sales sites, such as Alibaba and AliExpress for products being sold in international markets.

You can also conduct searches of pending trademark applications using the US Trademark Office’s online search tool. If you discover a pending mark that you believe is similar to a brand that you own, you can oppose that mark’s registration.

Trademark Enforcement

If you determine that someone is infringing on your trademarks, you can choose whether to attempt to resolve the matter outside of court, by sending a cease and desist letter, or you can proceed directly to a trademark infringement lawsuit.

Cease and Desist Letters

Typically, if someone is infringing your marks, you will begin by sending a cease and desist letter to the infringing party. It can be a useful way of ending the infringement without the extra time and expense associated with going to court right off the bat.

A cease and desist letter has four components. First, it introduces you and your legal claim to the trademark, typically by including information regarding your trademark registration.

Second, it identifies the infringing item. For example, if Mary’s t-shirt company owns a trademarked logo that includes the silhouette of a pig surrounded by a circle, and Nancy begins selling shorts that use a logo that is very similar to Mary’s logo, Mary’s cease and desist letter will demonstrate the similarity between the two marks, with photographic evidence.

Third, the cease and desist letter will list the steps you expect the infringing party to take. These steps typically include:

  • Immediately stopping all use of the infringing mark by removing items containing the mark from their online or brick-and-mortar stores, website, or other marketing materials
  • Showing proof of compliance within a certain time period, typically 10 days

Depending on the extent of the infringement, you may also ask the other party to pay you a settlement so that you will not pursue further legal action. It is also possible that the two parties reach a licensing deal, where the other party will start paying your company in order to use your brands on their products.

Finally, your cease and desist letter will inform the other party that you can and will take further legal action by filing a trademark lawsuit if the other party does not comply with your demands.

Although cease and desist letters carry the specific and serious threat of a federal trademark infringement lawsuit, we often hear stories of amusing takes on the letter. For example, in 2017, Bud Light sent a town crier with a scroll to deliver an amusing cease and desist letter to a brewery selling beer utilizing one of A-B InBev’s brands (Bud Light’s parent company). The message got the point across in a humorous but effective way. This can be a useful approach if you are concerned about your company’s public perception but still want to maintain exclusive rights to your brands.

Filing a Trademark Infringement Lawsuit

If your cease and desist letter is unsuccessful in stopping the infringing activity, or if you decide to take a more aggressive approach from the outset, you can file a trademark infringement lawsuit in federal court.

Filing a lawsuit does not foreclose the possibility of settling outside of court – often parties will be in settlement discussions while they are filing motions and taking depositions to prepare for trial.

Because federal lawsuits can take a year or more to resolve, you may not have a quick decision regarding the alleged infringement. However, filing lawsuits against infringers is a way to show that you are serious about enforcing your marks. If you have a history of successfully defeating infringers in court, you will be able to demonstrate your successes in future cease and desist letters you may need to send.

Consequences of Failing to Enforce Your Trademarks

It is important to remember that trademark protection requires that you pursue all infringers that you discover using your brands. Failure to monitor and protect your trademarks carries some serious consequences, including:

  • Loss of the ability to stop a particular infringer, if you knew or should have known that individual or company was infringing your marks
  • Loss of trademark rights altogether if third parties start to use your mark in connection with goods or services similar to your mark.

Works like “aspirin” and “escalator” used to be trademarked, but because these names were used so often by third parties, they became genericized, essential creating a free-for-all allowing everyone to use these terms. This process can happen extremely quickly – for example, Apple created the “App Store” trademark and lost the exclusive right to use the name in less than two  years.

Do not let this happen to your cherished intellectual property – take the time to properly monitor and enforce your brands.

This article is for informational purposes only and does not provide legal advice, nor does it create an attorney-client relationship. If you have questions about trademark filings, contact the experienced trademark attorneys at Revision Legal. We can be reached today by using the form on this page or by calling us at 855-473-8474.

Selling Your E-Commerce Business

Selling Your E-Commerce Business

Selling your e-commerce business that you worked hard to set up can be difficult. It can represent the end of a chapter in your life, and you want to be sure that when you let it go, you do it the right way.

When you decide to sell your e-commerce business, consider the following steps to help maximize your profit while limiting your potential liability.

Understand Your Motivation to Sell

There are a variety of reasons that you may decide it is time to sell your e-commerce business. Maybe you are ready for a new challenge in a different industry. Maybe you want to spend time with your family, or you are ready to retire. Maybe you are just burnt out and want a break.

You should get to the roots of why you want to sell your business because this will help you determine your priorities in the sales process. For example, if you are exploring selling your company because you want to retire in the next six months to a year, you probably are willing to wait a little longer than someone who is one irate customer away from changing their name and catching the next flight to Fiji.

Your psychological motivation will help you set a sales timeline and will influence the ultimate selling price.

Determine What Your Business is Worth

The next step in selling your e-commerce business is to evaluate what it is worth. One estimate is that an e-commerce company typically sells for two to three times the net profit, if the business brings in between $20,000 and $2 million each year.

  • However, you should still weigh a number of factors before setting a sales price:
  • Monthly and annual total revenue
  • Revenue for each product
  • Monthly and annual sales volume
  • Value of your current inventory
  • Amount of time, effort, and money spent on marketing
  • Total number of customers
  • How much it costs to acquire a single customer
  • Number of repeat customers
  • Projected short-term and long-term growth.

You should also do some research on any competitors or similar businesses, to determine what they sold for. Viewing other listings will help you determine what are, and aren not, important in a listing.

Often, if you work with a broker or e-commerce attorney, he or she will help you with these steps so that you can know what to expect before your company hits the market.

Get Your Financial Details in Order

Any serious potential buyer will want to see the financial statements of a company before agreeing to invest in it. You should take the time to get your bookkeeping in order to make it easy for your potential buyers to view proper income statements and balance sheets.

If you need to hire a professional accountant in order to complete this step, it is well worth it. Perspective buyers do not want to spend time sifting through messy paperwork to find the details they are looking for. Disorganization may also raise serious red flags for buyers, who may wonder if you are trying to hide something underneath all the mess.

Find Ways to Increase the Value of Your Business Before Selling it

When trying to increase the value of a home, owners may take the time to make some aesthetic changes to the home, such as updating the paint or having professionals steam clean the carpet.

Similarly, a business owner may decide to invest a little extra time before selling an e-commerce company in order to bring in a potentially higher sale. For an e-commerce business, this may involve updating your website, especially if it’s using an outdated theme or older pictures that take too long to load.

In addition to having your financial statements prepared for potential buyer consideration, you can also prepare forward-thinking documents, showing potential growth areas in the industry and in your customer base. You can also show a history of success, whether from streamlined operations, widespread brand recognition, a large number of repeat customers, or a low number of consumer complaints. In short, be prepared to demonstrate why your business will be successful in the future.

Finding Brokers and Potential Buyers

Whether or not to hire a broker is a personal decision and is dependent on how hands-on you want to be with the sale. It is possible to sell a business without hiring a broker, and there are a number of websites designed to let owners do just that.

Brokers will be able to help you connect with potential buyers and help you negotiate the deal. However, they will typically charge a commission on the sales price for the e-commerce business.

If you decide to hire a broker, you should select someone you feel comfortable with and who can give you a realistic view of what the sales process and timeline will look like.

Prepare Contracts and Close the Deal

Once you have a buyer, you should have purchase and sales agreements drawn up by an experienced e-commerce lawyer. At minimum, your contract should list:

  • The parties involved,
  • What is included in the sale – this can include physical inventory, but also intangible assets such as your intellectual property, as well as debt obligations the buyer will assume as part of the sale
  • Disclosures of known liabilities, such as lawsuits or fines
  • The agreement on how payment will be made, for example as a lump sum or as installment payments
  • Any brokers or agents involved in the deal, and
  • The signatures of the parties

Your attorney will help ensure that everything is covered in the purchase and sale agreement, so that you can look ahead to the next chapter. This article is for informational purposes only and does not provide legal advice. Revision Legal has significant experience assisting e-commerce owners through selling their businesses, including negotiating deals, drafting purchase and sales agreements, and assisting with all manners of intellectual property transactions. In order to schedule an appointment with an internet lawyer, contact us today with the form on this page, or call us at 855-473-8474.

copyright infringement

The 2019 Guide To Avoiding Copyright Infringement

Protecting Your Company From Copyright Issues in 2019

As 2019 begins to swing into gear, it can be a good idea to review your company’s potential liability for copyright disputes and possible copyright infringement issues in order to avoid big surprises later on. Here are a number of issues to think about this year:

Avoiding Copyright Infringement: Knowing Who Owns What

Knowing who owns what is an important component of avoiding copyright infringement. Under the current US framework, a work automatically receives copyright protection when it is created. The question of “who owns the work” can be simple or complicated depending on the employment relationship, or lack thereof, between the creator and the person paying for the creation.

For example, Jill is an accountant. In her free time, she enjoys taking photographs of her dogs. Jill owns the copyright for every photograph she takes. If her boss asks her to take some photographs of the office, however, these photographs may be considered works for hire because they were created within the scope of Jill’s employment, and therefore may be owned by the firm.

On the other hand, Jack is a professional photographer and videographer. Jill’s accounting firm hires Jack to take photographs of all the employees to put on the firm’s website and to assist in creating a series of YouTube videos advertising the firm’s service. Because Jack may be considered an independent contractor, as opposed to an employee of the firm, if the contract hiring Jack does not specifically lay out whether the photographs and videos are works for hire, Jack may retain ultimate ownership of the works.

One way to avoid potential confusion is to clearly lay out ownership before any work is created. Including language in the employee handbook and any employment contracts you offer can educate and remind your employees of the company’s ownership of copyrighted materials. You can also include language in any vendor contracts clearly specifying ownership of any copyrighted works created by the contractor. This will assist in avoiding confusion down the road.

Additionally, if you are working with a creative team in a non-employment relationship, it is important to have a contract specifically laying out copyright ownership before the work is actually created. Otherwise, you may find that only one person actually owns the work. That person may agree to assign ownership to the rest of the team, but is not obligated to.

Auditing Your Website’s Images to Ensure You Have the Proper Licenses

If you use some form of stock imagery on your website, you should do an audit of all the images, even if you outsource web development to a professional graphic designer. Remember – just because something is available online does not mean that it is available for free.

Placing copyrighted material on your website that you do not have permission to use can lead to being asked by the copyright holder to remove the work via a DMCA takedown notice, or even a copyright infringement lawsuit.

Instead, it is much better to use images whose owners give explicit permission for you to use them, even if you have to pay a fee.

When reviewing your existing images or investing in new ones, you should review the image license to understand the terms. What kind of attribution do you need to include on the image? What limitations are there, if any, on using the website in online or printed marketing materials? Is there a one-time licensing fee, or will you owe additional fees as your website brings in more traffic?

While there are some sites that allow certain images to be used at no cost, using them may still come with terms and conditions. For example, some are available for non-profit or educational uses, but not for commercial uses. It is important to read the fine print before you open your company up to potential liability.

Avoiding Copyright Trolls by Limiting Access to Your Company’s Internet

Finally, if your company offers internet to your employees, customers, or the general public, you may be opening yourself to liability for copyright infringement.

If someone uses a BitTorrent program such as Popcorn Time on their smartphone, tablet, or computer while connected to your internet, you may find yourself on the receiving end of a copyright lawsuit. Copyright trolls are owners of copyrighted material, who files hundreds if not thousands of lawsuits against alleged infringers, but rarely, if ever, litigate these cases. They are able to trace downloads of their material to specific locations through an IP address, on the theory that the person paying the bill for the internet account is either the infringer or knows who the infringer is.

Even if neither you nor your employees downloaded copyrighted material without permission, if the bill is in your name, you can get dragged into these suits while the copyright troll pursues the true infringer.

This type of copyright lawsuits were on the rise in 2018, with a handful of copyright holders filing thousands of suits in order to obtain IP records from your internet service provider. Typically, these copyright holders are looking to settle cases outside of court for thousands of dollars, rather than go through a long and arduous litigation process.

One way to limit your exposure to these types of cases is to limit access to your company’s internet by putting in a strong password on the Wi-Fi and reminding your employees about what is, and is not, appropriate use of company resources. However, other businesses find it essential to have open Wi-Fi for customers. This is increasingly common in restaurants, bars, and coffee shops. These companies may need to spend some time defending themselves in court from these cases, to the extent of demonstrating that it is impossible to find the true infringer.

This article is for informational purposes only and does not contain legal advice. If you have questions regarding copyright protection, copyright infringement, or other intellectual property matters, contact our experienced IP attorneys today with the form on this page, or call us at 855-473-8474.