Eric Goldman points us to the news that Hotels.com has had the trademark application on its own name rejected (warning: pdf) as being too generic. I have to admit I’m really, really surprised about this. I would think that the combination of “hotels” with a “.com” on the end switches it from being generic to distinct, since there’s only one hotels.com. However, the trademark board and the court note that there are lots of other sites that use a combination of hotels and .com, such as www.all-hotels.com, www.web-hotels.com, www.my-discount-hotels.com. That could be true, but I think those are all different enough themselves from the straight hotels.com that even getting a trademark on hotels.com alone shouldn’t prohibit those other sites from existing. But that’s not what the court found, noting that hotels.com itself was perfectly generic and unprotectable by trademark. It’s not clear how much this would actually matter, since anyone else using the phrase will ultimately end up helping to advertise hotels.com itself. However, it does raise significant questions about trademarks on other generic words plus a .com at the end.
It’s getting a bit tiresome to see these types of lawsuits, but Eric Goldman notes that this appears to be the ninth such lawsuit against Google, claiming trademark violations for allowing people to buy AdWords on trademarked terms (or suggesting them as keywords). This time the company suing is Rosetta Stone, but the complaint is basically the same. In fact, it uses the same lawyers and apparently the same boilerplate language as some previous lawsuits (wonder if they charge full price for reusing the same text?). The problem is the same, however. It’s a general misunderstanding of the purpose of trademark law, which does not give the trademark holder full control over the trademark, but merely is designed as consumer protection to stop confusion among buyers or, possibly, dilution of the trademark. But that does not prevent the use in competitive advertisements. And, even if it did the liability would be on the advertising party, and not Google. But Google has the cash, so everyone sues Google.
On Friday, we mentioned in passing that a class action lawsuit had been filed against Google, claiming that its allowance of trademarked terms to be used in keyword advertising was an abuse of trademark law. Eric Goldman had an interesting analysis of the case, noting that it was the first such attempt to create a class action lawsuit around this issue. As we’ve discussed, such lawsuits don’t make much sense. First, there’s no violation of trademark in running an ad against a trademarked keyword (there’s no confusion by the user and there’s no dilution of the mark). Second, even if there is trademark infringement, the infringer would be the company taking out the ad, not Google. But why let that stop a chance to score millions from Google.
When I saw the NY Times coverage of the lawsuit, it caught my attention that the woman behind the lawsuit was named Audrey Spangenberg, because it reminded me of Erich Spangenberg, a rather notorious patent hoarder who has made millions producing nothing, but suing an awful lot. This is the same Erich Spangenberg who had to pay $4 million after he was caught shuffling patents around among his many different shell companies, so that he could sue Chrysler three times over the same patent, despite earlier settlements promising never to use the same patent against Chrysler again.
Still, I figured it must be a coincidence — surely, there must be a fair number of Spangenbergs in the world. However, Joe Mullin, IP reporter extraordinaire, has a detailed post explaining that the two are, in fact, married, and also detailing how Erich Spangenberg has sued Google multiple times for patent infringement. Apparently, the family is branching out into questionable trademark lawsuits as well. Audrey Spangenberg claims (don’t they always?) that the lawsuit is about “respect for intellectual property” rather than money. So, I’m sure that she’ll gladly donate any money she and her husband make from all these lawsuits to groups that respect intellectual property, such as Creative Commons, EFF or the Free Software Foundation, right?
Right after the first of the year, it looked like Monster Cable might be taking a new tack in its trademark “strategy”, after it dropped a lawsuit against a company called Monster Mini-Golf. Monster Cable has a long history of suing lots of business — no matter what line of work they’re in — that use the word monster in their name, but given the backlash against it and its subsequent apology in the mini-golf case, it seemed that maybe, just maybe it was changing its ways. That was false hope, apparently, as it’s now going after a company called Monster Transmission (via Engadget). The cable company apparently claims it “has no issue” with the transmission company, but that’s news to one of its owners. Monster Cable also claims the suit was filed before its backdown in the Monster Mini-Golf case, as if that’s supposed to make it okay. But if the company really “has no issue” — why not just withdraw the suit?
Tim already covered some of the problems with Utah’s repeated attempts to ban (or greatly limit) keyword advertising on trademarked terms. However, there were two separate disturbing issues related to this, both brought up by Eric Goldman, that seemed worth discussing. Both involve two of the legislators who voted on the bill. The first, Rep. S. Clark, voted against the bill, but for flabbergasting reasons. You see, it wasn’t that he disliked the idea that companies would be blocked from advertising on competitive keywords, it was because he wanted to pin all the liability on Google:
“We should be going after the Googles that are creating this problem. They’re the villains.” …. “If we’re going to use the strength and resources of the state to go after businesses, then we ought to go after the business that is causing the harm. … We ought to go after the Googles with the state’s resources and reputation.”
Then, there’s Rep. Jennifer “Jen” Seelig, who voted for the bill. But, that shouldn’t be surprising. You see, even though she’s an elected official in the state legislator, she’s also still employed as a registered lobbyist for 1-800 Contacts, the company that has been pushing the bill. Apparently that sort of conflict of interest isn’t seen as a problem in Utah.
A couple of years back we noted that the Utah legislature was considering legislation that would have banned companies from buying search ads related to their competitors’ brand names. EFF and others said the law was likely unconstitutional, but the legislature passed it anyway. The legislation was such a disaster that last year the Utah legislature repealed it. Incredibly, despite all the negative publicity the 2007 bill received, and despite assurances from legislators that they’d learned their lesson, the backers of the legislation haven’t given up. This year they introduced yet another bill restricting keyword advertising that passed the Utah House but died in the Utah Senate a few days ago. Given the tenacity of the bill’s sponsors—1-800-Contacts is reportedly the leading backer of the proposal—the proposal may very well come back in future years.
Proposals to regulate keyword advertising have come in for a lot of criticism, but one person who’s willing to defend the Utah proposal is Harvard’s Ben Edelman. He argues that the Utah bill is necessary to avoid consumer confusion. He suggests that when consumers search for a trademarked term (say, “Hertz”), they’re expecting to see search results related to that company, not to the company’s competitors. He argues that if a consumer really wanted results from a variety of different companies, she would have chosen a generic term like “car rental” rather than a specific brand name. But James Grimmelmann points out a couple of problems with this reasoning. First, it shows an awfully low opinion of the intelligence of the average consumer. More importantly, there are circumstances where a consumer wants to see ads for a firm’s competitors. For example, a consumer may be considering buying a particular company’s products, but might want to check out that company’s competitors before making her decision. Searching for that company’s name is a quick and easy way to find out which other companies consider themselves to be in the same market. In contrast, the customer may not know which generic terms precisely describe that company’s market. In Grimmelmann’s example, it might be easier to ask for all companies in the same market as “Godiva” or “Hershey’s”, rather than having to describe precisely which segment of the chocolate market we’re interested in.
Jim Harper has the story of how the combination of a screwup at the US Patent & Trademark Office (USPTO) and a bunch of overly aggressive lawyers at Nordstrom’s have made life incredibly difficult for a small business that has done everything right. That business, an “organic” lifestyle clothing company, filed for a trademark on those clothes using their company name: Beckons. After this small business filed for the trademark, but before that information was published, the big department store Nordstrom’s filed for a trademark on the word “Beckon” for women’s clothing. This happens at times, but the small company was there first, and the proper response from the USPTO is to reject the latter registration.
That didn’t happen.
The USPTO flat-out screwed up and approved Nordstrom’s application for publication (effectively moving the process forward). That meant that the small Beckons company had to spend thousands of dollars opposing Nordstrom’s trademark registration. Thousands of dollars they shouldn’t have had to spend if the USPTO had done its job right in the first place. Now, again, at this point, the facts are pretty straightforward, and even though the USPTO screwed up initially, the next step should be that the USPTO admits its mistake and everything moves on again.
But that’s when Nordstrom’s lawyers apparently got involved. Rather than recognizing the obvious truth (they have no claim on the mark Beckon and should give it up), they went into attack mode — and tried to have the original Beckons trademark canceled, arguing that it really only was used for “yoga clothing” as opposed to a wider array of apparel. The case went to the appeals board — meaning more legal costs for the small company. It was at this point, that the USPTO actually realized their original mistake, transferred Nordstrom’s trademark app back to the original approver — where it was rejected as being too similar to the Beckons clothing line. Again, at this point, despite the massive legal costs and mistakes and overly aggressive lawyers, you’d hope the matter would be done with.
No such luck.
Nordstrom’s lawyers filed another complaint against the original Beckons trademark, claiming that they had abandoned their rights to the mark, once again sending everything to the Appeals Board (more legal bills!) only to have the filing dismissed, after it was realized that Nordstorm’s original request to cancel the Beckons trademark was still out. And, in fact, that attempt to cancel the trademark is still active, but is in a long queue of cases to hit the Appeals Board — meaning that the small company behind Beckons still has plenty more to spend on legal bills, and plenty of uncertainty concerning the simple trademark they filed for a few years ago.
While we often rail against problems with patent and copyright law, the purpose behind trademark law is entirely different It’s a consumer or fraud protection law — designed to make sure consumers aren’t tricked into believing one product is associated with another company. Yes, it’s all too often abused, but the small clothing company behind Beckons was doing exactly the right thing… and a mistake and some aggressive lawyering seem to have left them in a bad spot. The USPTO should fix things and Nordstrom’s should drop its ridiculous vindictive legal attack against the much smaller company.
Late last year, we wrote about Psion’s attempt to reclaim the word “netbook.” Years back, the company had a marginally popular product with that name — though it no longer offers such a product. The company was apparently upset at the commercial use of the word “netbook” which is commonly being used to describe cheap, small laptops like the EeePC. jkOnTheRun now has a story — direct from Psion PR — claiming that Google has agreed to block Google ads that use the term after recognizing that Psion has a trademark on the term.
Of course, advertisers can still advertise using the keyword “netbooks” but are apparently barred from actually using the word in the advertisement itself. So a search on “netbooks” still shows ads — just none of those ads say “netbooks” anywhere. Thus, if you look at the netbooks search, you see all the ads refer to things like “mini notebooks.”
This seems pretty pointless all around. As much as Psion may wish it still holds onto the name of a product it stopped selling years ago, the term has become generically accepted as referring to this generation of small and cheap notebook computers. Psion has had nothing to do with the current value in the word, and its attempt to take back control over the word it abandoned years ago is not, at all, what trademark law was intended to allow.
It’s amazing that after all these years, we’re still seeing these types of lawsuits — with these types of results. It involves the question of whether or not a company can buy an AdWords advertisement on Google using keywords that are trademarked by a competitor — and then, secondarily, if this is trademark infringement, whether or not Google is liable. I have trouble seeing how the answer to the first question is even a yes, but French courts have repeatedly said yes not just to the first one, but to the second question as well. This time Google is being fined hundreds of thousands of euros for allowing certain trademarked words to have advertisements run against them.
It’s hard to see how this makes any sense at all. First, unless the ads are designed to confuse someone, there should be no question that ads against a competitor’s keywords are perfectly legal. There’s no customer confusion (the point of trademark law). It’s no different than having your product placed on the grocery store shelf next to competing products, or (as is quite common in supermarkets these days) having a coupon print out for your product when you buy a competing one. Claiming this is trademark infringement is just a weak attempt to stifle competition by brands that don’t want to compete.
That said, even if you somehow think that this is trademark infringement, it’s an even bigger stretch to then pin the liability on Google. The actual party doing the “infringing” would be whoever bought and created the advertisement. Going after Google is a Steve Dallas defense: going after the biggest company that, tangentially, is involved just because it has the biggest bank account. Sure, Google makes money from the ads, but that shouldn’t create liability any more than the guy who sells the paints that are used to paint a trademark-infringing billboard is liable for what’s painted. Like the paint seller, Google is just a tool provider and has nothing to do with the content. Unfortunately, this bit of common sense still hasn’t made it into the French court system.
I recently became aware of yet another lawsuit where it looks as though a big companies with deep pockets appears to be bullying a small competitor through questionable use of intellectual property laws. The lawsuit was filed by uHaul against a small startup called HireAHelper, but also against HireAHelper’s founder and his wife personally. You can see the full filing here:
The main gist of the story is that Michael Glanz had signed up with a uHaul subsidiary, named eMove, offering his services as a mover. Later, Glanz ended up starting his own startup called HireAHelper, in part claiming that his experiences with eMove made him believe he could do a better job helping people find a variety of helpers (beyond just moving help apparently). Of course, here in the US, there’s a long history of people breaking off from a service or company they found inadequate and creating a better competitor. That’s competition, and it drives innovation. But, to uHaul, apparently it’s a threat that needs to be stamped out.
The lawsuit covers a variety of different charges, almost all of which seem questionable from what’s presented. The most complete charge appears to be trademark violations, but the two trademarks in question seem highly questionable by themselves: “Moving Help” and “Moving Helper” which are both generic and descriptive — which are two no-nos in getting a trademark. If we applied our ever popular moron in a hurry test, it seems unlikely that anyone (even folks who worked for uHaul) would be confused and believe that HireAHelper was somehow connected to eMove/uHaul.
After that, it appears that uHaul’s lawyers just threw everything they could think of at Glanz and his company: including copyright infringement (of what? not clear), “business method material” (here in the real world, we call that competition and think it’s a good thing), design logos (of what? not clear) and trade secrets. There may be more to the trade secrets claim, as the lawsuit provides almost no details other than to suggest that the trade secrets are from being a member of eMove — something that many, many, many other people are, so it’s difficult to see what the trade secrets are since most of the info is widely known.
Given how there are so many different claims without a clear explanation, I contacted uHaul by phone and email a week ago with a list of questions, hoping they might provide some more details and clear up some of the confusion over the lawsuit. To date, there has been no response (I can’t even get a “no comment” apparently). From what we’ve seen, it certainly sounds like uHaul is simply lawyering up to get a much, much smaller competitor to shut down, in part because he was better at getting his site listed well in Google compared to eMove. Consider it the crime of being a better marketer.
