Owning the Intangible/Trademarks on Common Words

Trademarks on Common Words: Potential consequences for generic trademark holders
by Morgan Counts

Introduction

Johnny sat inside reading a book, but put his face to the window right when an apple fell from the sky. Most would not dispute the claim that this sentence uses some of the most basic words in the English language. However, many would not believe that six of those words are “owned” by multi-billion dollar corporations as Intellectual Property, in the form of a trademark. Trademarks are a form of intellectual property that allows businesses to creatively distinguish their products from those of other businesses. Anything unique to the senses-words, phrases, symbols, logos, sounds, shapes, smells-can potentially be trademarked (United States Patent and Trademark Office 2010). Pay careful attention to the word unique. The word windows is not unique. It is a transparent sheet of glass that separates a cozy interior from the outside world. Yet for some reason, in the continuous race to dominate the market, corporations are claiming rights to these words and fighting for them as if they created the dictionary.

A variety of legal battles over who has a right to use the English language for business have been making headlines for years. Five years ago, Rupert Murdoch’s BSkyB pursued a lawsuit against the messenger program Skype, because the “company claims to own the sky in Skype” (Eaton 2010). Software giant Microsoft has filed suit against a start-up company Lindows.com for trying to label its software as Lindows, a one-letter difference from Microsoft’s Windows (Isenberg 2002). The multi-million dollar social networking sight, Facebook, is trying to sue a small online teachers’ community, Teachbook.com, because of the word book. Its argument is that “Teachbook’s use of book dilutes the Facebook brand name, impairs Facebook’s ability to remain unique and creates the façade of a false relationship between the two social networking entities” (Van Grove, 2010). The challenge is to understand the motive behind obtaining trademarks and what benefits and consequences may result.

An important question to ponder in taking on this challenge is what happens to words, like aspirin, hula-hoop, and trampoline that were once intellectual property, but eventually became a term for every product that resembled the original (Wikipedia 2010)? The rights to the name are lost. Maintaining a trademark requires the holder to protect its name, specifically through the law. If the company does not do enough to protect the mark, or if the mark’s popularity causes it to be used generically, the trademark no longer exists. Desai and Rearson discuss the effects of a generalized trademark:

Insofar as you used any of the terms in a general way to indicate a product or service class rather than a specific product or service, trademark holders would be quite upset because such uses may lead to a finding that the trademark has become generic. Once a term is deemed…generic, that is, the general term used to refer to a product or service category, the formerly valuable mark loses its ability to function as a trademark. When that happens, the mark, which may have been highly valuable to the trademark holder, becomes essentially worthless (Desai, & Rierson 2007).

An increasing number of corporations are being allowed to trademark common words, when trademarked words that become common lose their trademark-it does not make sense. Developing the ideas behind this common oxymoron requires answering three important questions: Can a company really monopolize a common English word? Is it worth the corporation time and money to legally attack small businesses over a common word? How can a common word be trademarked when a trademarked word that becomes too generic loses its trademark?

Monopolization of Common Words

There is a phrase often used to motivate those who hesitate that goes, “feel the fear and do it anyway (Masnick 2009).” One blogger learned the hard way that apparently, the English language now comes with a price. Leo Blabauta happened to use this phrase in a blog, oblivious that an author had made it a title of her book just recently. Lawyers of author Susan Jeffers, Ph.D. pursued the blogger for trademark infringement, claiming that he needed to acknowledge Jeffers in the blog. The lawyers will not be successful because a book title must require secondary meaning (readers associate the title with only one source of the literary work) for it to be trademarked, or the blogger used it commercially as “unfair competition” (Rich 1998). The perturbed blogger sums up his frustrations:

I find it unbelievable that a common phrase (that was used way before it was the title of any book) can be trademarked…Perhaps I’m a little behind the times, but is it really possible to claim whole chunks of the language, and force people to get permission to use the language, just in everyday speech (Masnick 2009).

Although the title is not trademarked, contrary to what the blogger was lead to believe, the publishers act as a corporation, which shows that legal action is being taken to try to secure a monopoly over the English language. Large corporations, especially bigwigs like Facebook and Starbucks are successful in monopolizing common words because attacking small companies with trademark infringement through the law is becoming increasingly easier, which threatens other entrepreneurs who dare to try.

The increase in threats began in 1995, when the Federal Government deemed trademark infringement as the attempt to “dilute” a corporation’s trademark with a similar mark, with a law so generic that evidence barely needs to go farther than a simple accusation. Under the Federal Trademark Dilution Act of 1995, any company that uses a mark that potentially dilutes a well-known mark is subject to law suit. However, “there is no need to prove a likelihood of confusion, nor is there any need to show competition between the goods of the plaintiff and the defendant.” The stipulation is that only “famous” marks, such as KODAK, COCA-COLA, and REEBOK are protected under this act (Tysver 2008). Not only does the law make trademark protection nearly effortless, it is biased toward companies that already have near monopolies in their markets. All companies like KODAK, COCA-COLA, and REEBOK have to do is accuse a smaller company for trademark infringement, and protection and growth of its trademark become much easier. Recent legal battles in the corporate world have personified the Trademark Dilution Act, bringing this process to life. On the other hand, advancing technologies such as the internet provide new avenues for trademark infringement.

With over 500 million active users and 700 billion minutes of use worldwide per month, it is no wonder that social networking site Facebook has enough corporate power to successfully monopolize at least half of its common word combination, book. Facebook can easily pursue new and smaller networking sites with its 33 billion dollar shares and its global authority (Facebook.com: Statistics 2010). On August 18th, 2010 Facebook filed a complaint against an alternative networking site for teachers called “Teachbook” (Facebook Inc v Teachbook.com 2010). Lawyers for Facebook claim the name dilutes the distinctiveness of their mark (Pepitone 2010). According to a trademark partner at the UK Intellectual Property Law Firm Withers & Rogers Tania Clark, “’90% of cases like this never make it to court as the smaller company caves in” (qtd. in Halliday 2010). Whether the case makes it to court or not, all it takes is for Facebook to win its asking price of three times the damages and lawyer fees and every other company trying to use the word book will hide in the corner (Halliday 2010). Even though it may seem irrational to go after a small startup company that poses little threat, it is obvious that Teachbook was attempting to gain from Facebook’s success and the networking giant was able to stop it. With money and unlimited access to press coverage, corporate giants can gain monopolies over a common word.

In 2005, the infamous coffee house chain Starbucks decided to pick on a coffee shop in the small town of Astoria, Oregon: Population, 10,000 people. The owner of the shop, Sam Lundberg, used her first and maiden name (Bucks) to call the shop SamBucks. Starbucks offered a measly $500 for Lundberg to change the name and when she refused, Starbucks took Sambucks to court. The judge ruled that “There is no right to use an individual’s own name in business where the use confuses the public…Starbucks is entitles to a permanent injunction to prohibit Lundberg from further use of the name ‘Sambucks’ or any other variation on Starbucks’ trademark” (Starbucks Corporation v. Samantha Lundberg 2005). Ironically, the founders of Starbucks derived the name from the Moby Dick character, Starbuck (Stossel & Goldberg 2005). Starbucks stole its name from a name, while Sam Lundberg is simply used her own name. However, since a Moby Dick character cannot file a lawsuit and the name of Lundberg’s coffee shop created customer confusion, Starbucks can rightfully file for trademark infringements of its name.

Whether or not Lundberg had the same intentions that the founders of Teachbook had, her small town coffee shop, it is obvious that SamBucks was not going to bring an end to Starbucks, but the coffee chain had to protect its trademark. They went after Lundberg with the hope that others would learn what not to do. Fordham University law professor Hugh Hansen says, “It’s about setting a precedent…If they don’t stop her, it’s hard to stop the next one. And big money is at stake” (Stossel & Goldberg 2005). In order to monopolize a trademark, it must be legally protected and setting a precedent is the best way to achieve protection. Many may criticize Starbucks for picking on such a small business, but if Starbucks can trademark a combination of two common words and make money off it, they are going to do it.

When questioning the logic of gaining a trademark on a common English word, it should be understood how companies come to monopolize a common word and more importantly, that it is possible. The trademark owner must actively pursue infringers in order to keep the trademark, but the corporation has to prove nothing besides a mere similarity in the marks to take the alleged trademark infringer to court. Corporations such as Facebook and Starbucks use this law to monopolize their trademark by weeding out even the slightest competition. So it is possible, but the next question to pose is, is it resourceful? Does it make sense for these corporations to spend so much time and money on pursuing tiny, zero-threat businesses over an English word?

Loss of Resources

Imagine having to pay five dollars every time someone says the word the. As much of an exaggeration this may be, comparatively, big corporations expend money every time they try to bring down a company that uses a common word in its name. Yes, corporations have to set a precedent to protect their trademark, but is it worth it to have to stop every start-up company from using the common word they claim to own? Take Facebook as an example. Facebook can take Teachbook to court to set its precedent, but if it does, “Facebook will have a job on its hands…given the volume of companies using a variation of the disputed mark,” which counts in the hundreds (Halliday 2010). Facebook, or any corporation, cannot spend the money and time fighting hundreds of small companies over a word that can be found in the dictionary. A more logical approach would be to come up with a name without words that can be easily used by entrepreneurs creating similar products. A trademark on a word (or combination of words) that can easily be used by other companies leads to a number of potential court cases for the original company. Court case after court case eventually digs holes of financial disasters and questions the worthiness of the trademark.

It is not the name that makes a company rich, it is the product, and if acquisition and protection of the name wastes time and money, the name is not worth the product. The word windows has been used in computer lingo nearly as long as the word computer has been used in the English language (Markoff 1994). Windows is as common in the computer industry as it is in the homebuilding industry. No wonder it took three years and one million dollars for software giant Microsoft to (unexplainably) acquire a trademark on the word. Three years (1990-1993) of time and money spent on obtaining a trademark that has lead to 17 years of time and money spent on monopolizing the name (Markoff 1994). Shortly after the trademark approval, Microsoft went after a start-up software company called “Lindows” (Markoff 1994). There may only be a one-letter difference, but Microsoft was putting a lot of effort into stopping a company that 1) Stood no competitive chance and 2) Used a variation of a word that people use with computers every day, whether they come from Microsoft, Apple, or Gateway. Microsoft settled by paying “Lindows” 20 million dollars to change its name to Linspire (Associated Press 2004). In the end, the start-up company gained 20 million dollars and a name that sounds much better than the original. Maybe Microsoft can hand over 20 million dollars, but they cannot give out 20 million times 100 (as in Facebook’s case), and they arguably did not make more than the cost of this battle just because Lindows changed its name. Once again, Windows was setting its precedent, but it takes a lot of continuous time and money to protect a name that uses a word commonly used throughout an industry. However, there are some cases that do not seem rational, as names of the companies become less similar and cross over to different industries.

Recent legal battles are evidence that trying to monopolize a common word may lead to a loss of time and money. This particular accusation does not make much sense, until another motive is considered. Rupert Murdoch’s United Kingdom television service BSkyB recently filed legal allegations against networking company Skype, because it felt it owned rights to the word sky (Eaton 2010). Almost anyone would fail to connect BSkyB to Skype, considering the differences in companies, products, and even the name. Word of the allegations was reported “after a brief reference to the legal action in the 250-page document announcing Skype’s Wall Street flotation” (Eaton 2010). The motivation appears to be money. Protecting a trademark within an industry, or within obvious attempts of infringement, makes sense, but there seems to be neither of those connections in this case. Protecting the word sky like this will give BSkyB plentiful opportunities to go to court and possibly make money, but it will cost them valuable resources in return.

Another company caught in the midst of unreasonable common word battles is computer giant Apple, but not over the word apple. In 2009, Apple targeted entrepreneur Daniel Kokin and his video projector he has referred to as Video Pod since the year 2000 (Chen 2010). Apple does not carry products in video projection and Kokin believes Apple shows no interest in that field of production. Kokin is not the first “podder” to be accused of trademark infringement, as Apple has gone after uses such as “MyPodder…PodShow, and even Podium” (Chen 2010). Kokin’s lawyer Ana Christian is not oblivious to the type of monopoly corporations have been trying to gain:

She noted a trend in the tech industry, in which large corporations have been attempting to assume ownership of ordinary words… ‘I’m trying to look at it on the big picture,’ Christian said. ‘What I’m hoping to do with this case is to really reach a lot broader of an audience and make it so entrepreneurs can use the English language as they see fit in branding their products’ (Chen 2010).

Owning a trademark on the word apple makes more sense than owning one over pod. Apple does not describe the products made by the tech company, and trademark infringement within the same industry would be blatant. However, pod can be used to describe the function of products made, and businesses often use names that serve this purpose to avoid customer confusion. Trying to take ownership of descriptive words such as pod creates hassle for the owner and for people like Kokin, and both parties spend more money on these hassles than would be necessary.

In questioning the resourcefulness of trying to maintain a trademark on a word commonly used within an industry, recent legal cases and the motivations behind them make apparent that these trademarks simply result in a loss of time and money. Microsoft spent years obtaining a trademark on a word still generically used in the computer industry that costs the corporation money every time a small business uses a variation. BSkyB is trying to defy the odds that one individual could possibly own the sky and Apple wants all entrepreneurs to rename anything that identifies as a Pod. Also, publicity is not going to be beneficial when the corporation is trying to protect something they cannot easily have. The final inquiry into the common trademark trend deals with what happens to trademarks that become generic and what this means for the corporations attempting to do the opposite. The supposed originality of the trademark faces the ultimate obstacle when it is met with a society that decides to make it generic, which is not hard to do with a word that is already generic.

Generic Words and Trademark

People tend to refer to any type of paper that comes in contact with contents of the nose, whether it is actual tissue paper, toilet paper, or paper towel, as Kleenex. Kleenex is a trademarked brand name and the company would probably not appreciate the toilet paper connection. This is an example of a trademark in the process of becoming generic. According to the International Trademark Association,

Generic terms are common words or terms, often found in the dictionary, that identify products and services and are not specific to any particular source…If a trademark becomes generic, often as a result of improper use, rights in the mark may no longer be enforceable (INTA 2010).

Descriptions of products such as Aspirin, E-Mail, and Zipper were all registered as trademarks before they became generic terms, as determined by court rulings (Wikipedia 2010). Corporations are spending a lot of time and money to obtain and protect a trademark on a common word when it is possible that society will bring it back to the levels at which it began, generic and free. Corporations that have enough money to acquire and temporarily protect a trademark on a common English word find themselves caught in cycles of money-consuming legal battles, which leads to bad publicity and a loss of customers and a possible loss of the trademark.

A look into some of the controversy surrounding trademarks of generic terms in the cases previously discussed shows how close some of these trademarks could be to being deemed generic, and even how interesting it is that some of them achieved ownership in the first place. Microsoft waited three years to obtain its Windows trademark because previous rulings called the term “too generic,” and even the final ruling gave no explanation as to why the term was not generic enough (Markoff 1994). In an analysis of the trademark, author Doug Isenberg gives the reader the task of asking the question, “What term could the maker of a windows-based user interface (such as Lindows.com) use, other than windows, to describe its product? If you can’t think of one, then windows just might be generic” (Isenberg 2002). It is obvious that in many of these cases, the infringer is attempting to make a gain off the success of the original trademark holder, but many also use words or spinoffs of words that describe the product. As more and more people use variations of the term Windows to accurately describe a product, Microsoft will lose the time, money, and power to put a stop to every individual. Once the term Windows is deemed generic, Microsoft cannot prevent anyone from using the term or even a similar one (Isenberg 2002). It is only a matter of time before society takes back what it rightfully owns.

Once a corporation obtains a trademark that is already generic, a downward spiral of loses begins. Even though a trademark should not be awarded to a generic term, corporations who have the most money are able to buy them. They are also the most successful at protecting generic trademarks because of this money. However, more money means more popularity, which causes overuse of the brand name. Popularity may be important, but a famous product with a famous name causes consumers to refer to similar products with the same name (take Kleenex, for example), and when the term is already generic, this goes into effect quickly. Some may dispute by asking, what is the point of taking the time to create a name when popularity will cause it to become generic anyway? There is no guarantee that a trademark will not become generic, no matter how creative it is. However, throughout a long period of time, a trademark of an already-generic word will cost the company a lot more money.

The loss of this money over time is cumulative, as more and more companies decide to describe their products with the generic term. Trademark infringement allegations are expensive to carry out in court, and often the plaintiff is the one who ends up paying the settlement (i.e. so the defendant changes its name). One company may be easy to deal with, but hundreds and even thousands of companies can be overwhelming. The corporation could lose a lot of money over a term that would probably become generic. In addition to financial losses in court, the corporation also loses money through a loss in customers because of the media coverage of another “attack” of a small, innocent entrepreneur. In one very controversial trademark battle, computer cable manufacturer Monster Cable Products Inc. sought legal allegations against Monster.com, Disney and Pixar’s Monsters Inc., the Boston Redsox, kids’ t-shirts, and a miniature golf course, all for use of the word monster. The cable company lost $200,000 and 200 fuming customers in the miniature golf course case alone (Gunelius 2009). Monster Cable lost many customers over accusations that were not necessary, as the products were not related by any means. Lost customers is just another blow to the revenue that cumulates with money spent on trademark applications and court fees, which amounts to front seat tickets to watch the trademark slip from the grip of the corporation.

Trademarks in corporations such as Facebook, Starbucks, Microsoft, BSkyB, and Apple are bound to follow in the footsteps of Aspirin, E-Mail, and Zipper. The only difference is, the latter did not take words from the dictionary and claim to own them, they created them. These big name corporations are not adding a word to the dictionary, they are taking them, and it is only a matter of time before society takes them back. Although these corporations have enough influence to obtain and protect a generic trademark in the short run, the expenses and loses accumulated over years of court cases will burn the trademark out and the natural process of returning the word to its generic state will triumph. It is the product that produces the success, so corporations would save time and money by adding another word to the English language, rather than taking one.

Conclusion

Giant corporations have enough money and influence to obtain and protect a trademark of a generic word (or combination of these words), which makes the words more vulnerable to the effects of generic trademarks.

When trademarked words become too generic-that is, they actually become part of the regularly used language-they can no longer be owned as intellectual property. Multi-billion dollar corporations should be spending their time and multi billions on something more beneficial in the long run than cracking down on companies that will attempt to use these words as descriptions of industrial products, whether their actions are actually that innocent or not. Trying to own a common word used within an industry as a trademark is a waste of time and money. Corporate giants may be able to stop a few innocent entrepreneurs from using a common word, as a description of a product or business, but the corporation is not gaining from the negative publicity. A corporation valued in the billions is not going to go down because of one tiny shop in Middle-of-Nowhere, USA. Even if one gutsy computer scientist decided to create a networking site and call it “Facebook,” the current Facebook would not lose 500 million users. It would not even lose one, because the content makes the product, not the name. There are three options when it comes to obtaining a trademark on a common word. The first option is to take every small business that uses a variation of the word to court and file for bankruptcy. The second is to save money and allow the small businesses to use the word and eventually lose control over the trademark that became generic, again. The third option is to think of something new, because the English language simply cannot be owned.

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