Endorsements and Testimonials: Are You Following the Rules?

Does your company use endorsements or testimonials to promote its products or services on its website or in its advertising or marketing materials?  Do you allow customers to post on your social media pages or website?  Are you a blogger who reviews products or services?

When most people hear the words endorsement or testimonial, they likely imagine a celebrity or expert getting paid big bucks to talk about an “amazing” product or service.  And, they would be right.

However, if you answered “yes” to any of the questions above, then you likely need to comply with the Endorsement and Testimonial Guides issued by the Federal Trade Commission (“FTC”).

Examples of messages that constitute endorsements include a film critic’s review of a movie used in Excellent result on survey on blackboardan advertisement for the film, a well-known athlete using a certain brand of sporting equipment in an ad for that brand, and a positive product review posted by a consumer on her personal blog where the consumer received the product free as part of a network marketing program.

The Guides reflect three basic truth-in-advertising principles:

  1. Endorsements must be truthful and not misleading;
  2. If the advertiser doesn’t have proof that the endorser’s experience represents what consumers will achieve by using the product, the ad must clearly and conspicuously disclose the generally expected results in the depicted circumstances; and
  3. If there’s a connection between the endorser and the marketer of the product that would affect how people evaluate the endorsement, it should be disclosed.

In other words, endorsements:

  1. Must reflect the honest experience or opinion of the endorser (there are different rules for consumer, celebrity and expert endorsements, as well as for endorsements by organizations);
  2. May not contain representations or claims that would be deceptive, or could not be substantiated, if the advertiser made them directly; and
  3. Must disclose any material connection between the person endorsing a product or service and the company selling the product or service that might materially affect the weight or credibility of the endorsement (employee, relative, paid, etc. – even small incentives, such as free product for bloggers to sample, must be disclosed).

Although the Guides don’t mandate the specific wording of disclosures, the Guides states that disclosures “must be clear and conspicuous on all devices and platforms that consumers may use to view the ad”…even if there are only 140 characters available for the entire message.  For example, paid spokespeople must disclose that they are sponsored (#sponsored or #ad) or explicitly mention that they are working with the brand/company (e.g., I’m teaming up with [brand/company] to do X) on social media platforms, such as Twitter.

If you are a brand owner, use caution before you follow, friend, like, or engage with a celebrity, third-party trademark or brand. Do not imply that there is an affiliation between the brand/company and the user/celebrity/trademark/etc….especially when such a relationship doesn’t exist. (Most consumers will assume there is a relationship between the brand/company and the user/celebrity/trademark.)

For more information, see the FTC’s FAQs about endorsements and testimonials.

 

Intent to Use Trademark Applications: Reserve Your Brand Today!

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Although actual use of a mark in commerce is usually required to protect a trademark, Intent-to-Use (“ITU”) Trademark Applications extend potential protection to a mark before it is used in interstate commerce.  One of the main benefits is that, once the application matures into a registration, you can claim the filing date as your constructive date of first use of the mark, even though you didn’t actually use the mark until after you filed. (In other words, filing an ITU application provides nationwide priority over others, with the exception of parties who had used the mark before your filing date, parties who had filed before you, or parties who are entitled to an earlier priority filing date based upon the filing of a foreign application). You will also be able to establish some priority in a mark and determine whether your mark is registrable before you invest large sums of money for advertising, printing, etc.

Bona Fide Intent.  Before you file an application with the U.S. Patent and Trademark Office (“USPTO”), you must have a good faith or bona fide intention to use the mark in commerce. I recommend that your intent be bolstered by verifiable documents (corporate minutes, reports, plans, contracts, evidence of R&D, market research, manufacturing activities, steps to acquire distributors or obtain required governmental approval, or other similar activities).

Goods and Services.  A trademark application must list the specific goods/services that will be provided in connection with the mark. (Goods are products; services are activities performed for the benefit of someone else.) The description of goods/services should use clear, concise terms that are easily understood by the general public. Once an application is filed, you can clarify or delete certain goods/services, but you must file a new application to add additional goods/services. As ITU applications are often filed before final decisions have been made, it is usually best to be broad and over-inclusive with respect to the goods/services you reasonably intend to offer.

Allowed Applications. Once your mark clears the initial evaluation and publication process, the USPTO will issue a Notice of Allowance. Your Allowed application will not mature into a Registration unless and until you file an Allegation of Use indicating that you have begun use of the mark in commerce.  You have six (6) months from the date the application is Allowed to file an Allegation of Use. However, you may file up to five (5) six-month Extensions, which allows you to “reserve” the mark for up to three (3) years before actual use of the mark in commerce is required. If an Allegation of Use is not filed within 36 months of the date the application was Allowed, the application will abandon. The USPTO filing fees are currently $150 per Class of goods/services for each Extension, and $100 per Class of goods/services to file an Allegation of Use.

Establishing Use. In order to prepare an Allegation of Use, you will need the following for each Class of goods/services: (1) Date of First Use Anywhere (MM/DD/YY); (2) Date of First Use in Commerce (MM/DD/YY); and (3) a Specimen of Use.

  • Date of First Use Anywhere. The date the mark was first used in commerce anywhere (which may be earlier than, or the same as, the date of the first use of the mark in commerce).
  • Date of First Use in Interstate Commerce. For goods (Classes 1-34), “interstate commerce” involves sending the goods across state (or country) lines with the mark displayed on the goods or packaging for the goods. With services (Classes 35-45), “interstate commerce” involves using or displaying the mark in connection with selling, advertising or offering a service to those in another state (or country) or rendering a service which affects interstate commerce (e.g., restaurants, gas stations, hotels). “Use in commerce” must be bona fide use in the ordinary course of trade, not “token” use simply made to reserve rights in the mark.
  • Specimen of Use. A specimen is a real-world example of how the mark is actually used on the goods or in the offer of services. Specimens for goods (Classes 1-34) may take the form of labels, tags, packaging, or containers for the goods, a display associated with the goods, or a photograph of the goods that shows use of the mark on the goods. Specimens for services (Classes 35-45) should include some reference to the type of services rendered and may take the form of website screenshots, magazine advertisements, brochures, a sign, a business card or stationery, or a photograph showing the mark as used in rendering or advertising the services.

Controlling Your Domain (Name) to Avoid a Domain Name Fumble

Next week’s NFL Draft brings to mind a cautionary tale…

It could happen to any of us, and it almost happened to the Dallas Cowboys at a crucial time.  In the middle of the 2010 NFL season, buzz surrounding whether Cowboys’ head coach Wade Phillips was going to be fired (which was ultimately the case) was at an all-time high.  No doubt, fans, rivals and press were all scouring the internet for updates on the situation, and the Cowboys’ website was probably the prime online destination of the day. Unfortunately, the team forgot to renew the dallascowboys.com domain, and many would-be site visitors got error screens instead of highlights and instant replays. Talk about a game-changing fumble! See related article here.Blue Url Words Shows Org Biz Com Edu

It’s worth noting that the dallascowboys.com domain name was originally purchased in 1995 and probably was reserved for the longest possible time allowed.  Although most domain name registrars timely send email renewal reminders to domain name owners, it’s likely that whomever was initially responsible for the domain name was long gone and the renewal information didn’t get forwarded to the proper person (and, although auto-renew is available, the credit card info on file with the domain name registrar was probably no longer valid as well). It’s lucky that the ‘Boys became aware of the problem (which you might call an incomplete pass) and quickly renewed the domain before someone else (perhaps a disgruntled, recently fired coach) grabbed it and tried to hold it hostage.

At least Dallas Cowboys Football Club, Ltd. was listed as the domain name owner.  Many times, the person who originally registers the domain name (whether an employee of the organization or someone with the company hired to design the website) is listed as the owner of the domain name and the domain name is never officially transferred to the organization and/or the information doesn’t get updated…which can cause a host of problems for the organization utilizing the domain name (especially if the employee is terminated or if the development company relationship dissolves).

Although the Cowboys had a close call and almost wound up on the disabled list, this is a great example of how easy it can be for an organization to neglect (and almost lose) one of its most important intellectual property assets. We all know how valuable your website is to your business, so here’s what you should do to prepare your domain name offensive strategy…

If you have a website: 

(1)   Determine who is listed as the owner of your domain name.

To find out who owns your domain name and when the registration expires, type in the domain name (e.g., dallascowboys.com) in a WHOIS search database, such as InterNIC, Network Solutions, or GoDaddy.

(2)   Check to ensure that this information is correct. 

If the Administrative and/or Technical Contact information is not in your company’s name, you’ll want to update this information as quickly as possible.

You may need a Domain Name Transfer Agreement to perfect the chain of title for the domain name ownership.  (While you’re at it, you may also want to make sure you have a Website Development Agreement in place with any third-party web developer for the website associated with the domain name so you own/have rights to your web content and design.)

If the domain name is registered to one of your company’s employees or officers, add this to your employee exit checklist to ensure that this information is updated should the employee/officer leave the company.

A disgruntled/terminated employee or website developer with sole control of a company domain name can easily redirect internet, e-mail and intranet traffic within a matter of moments and bring business to a standstill.

(3)   Calendar a reminder for the domain name renewal date.  

The expiration date for the domain name registration is listed in the WHOIS information (see #1 above).

 

Intellectual Property Audits: Taking Stock of Your Intangibles

Most companies routinely perform inventory audits of their physical assets…but — even though it’s not always on the radar — performing audits of intangible assets is equally (and perhaps even more) important.

The objective of an IP audit is to identify and protect intellectual property assets that provide you with Audit Rubber Stamp Shows Financial Accounting Examinationa competitive advantage and promote the goodwill of your business.  By creating a process to identify and take steps to protect intellectual property at least once a year (and perhaps more frequently if IP is a major component of your business), you can ensure that valuable assets are not made public, or otherwise lost or compromised, prior to taking the appropriate actions to protect them.  An intellectual property audit and due diligence review should also be performed in connection with mergers and acquisitions and other buy/sell transactions, as well as financing transactions that affect IP assets.

Typical intellectual property assets include product, service and company names and logos (trademarks), website content, written materials, and creative works (copyrights), formulas, processes, product designs and inventions (patents), and proprietary customer lists and other confidential information, such as pricing data and vendor information (trade secrets). Depending on your industry and the types of products and services you offer, there may be other intellectual property assets to consider.  These items should be identified and reviewed on a regular basis.

An audit should include a variety of information, such as:

  • Name/Description of IP – Identification of mark or domain name, title of copyright or patent
  • Subject of IP – List of goods/services, copyrighted material, description of patent
  • Status of IP – Application and registration number(s), intent-to-use or actual use-based mark, upcoming filing deadlines, IP not protected, related litigation or other disputes or issues
  • When/How/Where the IP Has Been Used – Dates of first use/publication, where/how IP used/published, U.S./International use, and any licenses or agreements regarding the IP
  • Chain of Title – IP owner(s), list of all IP transfers, note any transfers that have not been recorded, note any gaps in the record of ownership

Once your intellectual property has been itemized, you should determine whether any additional protections or updates to existing protections are necessary.  You should also review company policies and agreements with employees, independent contractors and licensees regarding the creation, use and protection of your (or third party) IP assets, as well as confidentiality and non-compete protections.  Additionally, your social media, website and insurance policies should be reviewed, as well as your advertising and marketing materials.  You may also consider whether you need to implement systems to monitor unauthorized use of your IP assets by others and address how to approach infringement scenarios.

Internal IP audits are a great start, but you should consider consulting with an IP attorney to ensure all of your IP has been identified and is protected.

 

Unusual Trademarks Hiding in Plain Sight

Most people usually think of a trademark as a word, slogan or logo associated with a specific company, creative project, product or service (and often the quality of the products or services).  For example, some people strongly prefer consuming soft drinks labeled 220px-Pepsi_logo_svg  as opposed to coke-logo-1, while others would only buy tennis shoes marked with Nikeinstead of Adidas_Logoor logo_REEBOK_ICON_1 , and some may prefer this band  Rolling-Stones-Wallpaper-classic-rock-17732124-1024-768 to this one grateful_dead_bear-265x300.  However, a trademark can consist of almost anything that is used to identify and distinguish the goods or services of one entity from those manufactured, sold or provided by others. You might have a mark worthy of protection and don’t even realize it.  Perhaps your mark:

Sounds like a trademark…

There are registered marks for chimes, sayings associated with animated characters, and even theme songs.  Universal TV LLV has a registration that consists of “two musical notes, a strike and a rapid rearticulation of a perfect fifth pitch interval, which in the key of C sounds the notes C and G, struck concurrently” used in connection with the “entertainment services, namely, a series of on-going dramatic television programs”…although you probably know it better as the NBC Chimes.

Whether or not you eat carbs, you are likely familiar with the Pillsbury Doughboy.  If you’re reading this blog, you would likely recognize Yahoo!  And you might get excited when you hear this from your computer.  If you use a sound in connection with your products or services that (1) does not serve any functional purpose in connection with the products or services, (2) is not a natural by-product of the products or services, and (3) is not used by competitors or applicant’s industry in connection with the goods or services, you likely have something distinctive that consumers will associate with your products or services.  For more examples of sound marks, click here.

Smells like a trademark…

If Smead Manufacturing made apple cider, peppermint, vanilla, peach, lavender, and grapefruit scented lotion, they probably couldn’t protect the fragrance because it would be considered to serve a utilitarian purpose and be functional in connection with the product…but it’s a different story when those scents are used in connection with “office supplies, namely, file folders, hanging folders, paper expanding files.”  And, if you don’t like the smell of regular “medicated transdermal patches for the temporary relief of aches and pains of muscles and joints associated with arthritis, simple backaches, strains, bruises and sprains,” then you may want to try some that have “a minty scent by mixture of highly concentrated methyl salicylate (10wt%) and menthol (3wt%)”.

Looks like a trademark…

I don’t know of many women who wouldn’t immediately recognized a box or bag in a specific “shade of blue often referred to as robin’s-egg blue” as coming from the famous jeweler Tiffany & Co. The color pink for “foam insulation for use in building and construction” is registered to Owens-Corning Fiberglas Technology Inc. Of course, Coca-Cola has protected its iconic bottle designCoke_Bottle for decades…and the Oscar award statuetteAcademy_Award_trophyis also protected.

Feels like a trademark…

American Wholesale Wine & Spirits, Inc. has a mark which consists of “a velvet textured covering on the surface of a bottle of wine” for use in connection with wines.

Tastes like a trademark…????

Not yet…and potentially never.  The Trademark Trial and Appeal Board has observed that it is unclear how a flavor could function as a source indicator because flavor or taste generally performs a utilitarian function, and consumers generally have no access to a product’s flavor or taste prior to purchase.  In re N.V. Organon, 79 USPQ2d 1639 (TTAB 2006) (affirming refusal to register “an orange flavor” for “pharmaceuticals for human use, namely, antidepressants in quick-dissolving tablets and pills,” on the grounds that the proposed mark was functional under §2(e)(5) and failed to function as a mark within the meaning of §§1, 2, and 45 of the Trademark Act.).

Obtaining registration for some of these more unusual marks (usually categorized as trade dress) are more likely to require a showing of evidence of “acquired distinctiveness” (proof that the mark has become adequately associated in consumers’ minds with the mark owner’s goods or services) than more traditional marks.  However, don’t let that discourage you.  By opening your mind and looking for marks outside of the traditional name, logo or slogan categories, you just may find a sound, color, scent or other sensory trigger that strongly appeals to your customers or fans and turns out to be something that helps you stand out from the crowd and gets you a step ahead of the competition.

 

Protect Your Brand: The Duty to Police Trademarks

So, you’ve found and registered a unique brand.  Congratulations!  That’s a major accomplishment!  However, once you have rights in a brand, you need to make sure you keep those rights in tact to protect the brand.

Although you are not required to prosecute (or even act immediately against) every potential infringer of your brands, you do have a legal duty to protect against infringement and act reasonably in protecting your trademark rights.  If you fail to properly “police” your marks, you risk diminishing the value of your brand, damaging your goodwill, and weakening your mark.police-294107_1280

In extreme cases, failure to police a mark can lead to abandonment of all trademark rights in the mark.  For example, ASPIRIN used to be a brand name owed by Bayer and ESCALATOR used to be owned by Otis Elevator Company…but these marks became so widely used as the name of the underlying products themselves that the marks became generic terms for those products, and both companies eventually lost their trademark rights in the names.  (Unlike a trademark, a generic name consists of the word commonly used to identify a product.  For example, the terms “computer,” “software” and “internet” are generic names and anyone is free to use them.)

To protect your marks and prevent competitors from using confusingly similar marks that could affect your reputation and bottom line, you should implement a plan to monitor your marks and enforce your rights when necessary.

To help you monitor your marks, you may want to sign up for Watch Services that will notify you of potential issues, such as new trademarks filed with the US Patent and Trademark Office (USPTO), Secretary of State Offices or in foreign countries, as well as domain name filings, common law marks and corporate filings.  At the very least, you may want to set up Google Alerts to monitor mentions of your brand or products on the Internet.  If you have licensed any of your marks to third parties, you should monitor your licensees’ use of your marks as well.

In the event you become aware of a potential infringing or confusingly similar mark, you can determine (in consultation with your trademark attorney) what, if any, actions you may want to take to protect your trademark rights.  Depending on the situation, you may decide to send a cease and desist letter to the infringing party, file an Opposition or Cancellation action with the USPTO, file a lawsuit in State or Federal Court, pursue a combination of these options, or decide on a different strategy.

 

Is Coke’s Trade Secret Out of the Can?

stamp-143799_1280In early 2011, the public radio show This American Life created an international media frenzy when it revealed what it believed to be the original recipe for Coca-Cola.

The “secret formula” for Coca-Cola — which has been locked away in a bank vault at the Trust Company Bank in Atlanta since at least 1925 — is one of the most famous and highly guarded trade secrets in the world.  Supposedly, only two company executives know the recipe at any one time and they are never allowed to fly on an airplane together in case of a crash.  (For more on the rumors and lore surrounding Coke’s secret formula, visit urban myth-busing website Snopes.com.) So, after 125 years of secrecy, how did a public radio show get hold of such a well-protected and highly-coveted corporate gem?  Did This American Life break into the vault or kidnap and tickle-torture one of the two executives until he talked?  No.  They opened a newspaper.  Apparently, the photo used to illustrate the story published in The Atlanta Journal and Constitution on February 18, 1979, was a hand-written copy of (Coke’s inventor) John Pemberton’s recipe circa 1886.  Talk about adding insult to injury!

This American Life has clarified its position on the recipe printed in the paper, stating that it believes the recipe is Pemberton’s original recipe or a version of Coca-Cola that he made either before or after the product hit the market in 1886, and not the recipe used today.  Perhaps this is because they tested the recipe and determined that it wasn’t quite the same as the Coca-Cola we know today, and, of course, The Coca-Cola Company denies that the secret is out.

Although you may not go to quite the lengths taken by The Coca-Cola Company to protect your trade secrets, you should consider what measures (if any) you are taking to safeguard your “information, including a formula, pattern, compilation, program, device, method, technique or process that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” (Definition from Uniform Trade Secrets Act.)

Trade secrets — which often include recipes, sales methods, distribution methods, consumer profiles, advertising strategies, lists of suppliers and clients, and manufacturing processes — provide an enterprise a competitive edge and can last for as long as they are kept secret.  So, you would never want to include your trade secrets in a copyright or patent application, as they will be disclosed once the application or registration is published.

Although whether something truly constitutes a trade secret will depend on the circumstances of each individual case, for something to qualify and be protected as a trade secret:

  • The information must be secret (i.e., it is not generally known among, or readily accessible to, circles that normally deal with the type of information in question).
  • It must have commercial value because it is a secret.
  • It must have been subject to reasonable steps by the rightful holder of the information to keep it secret (e.g., through confidentiality agreements).