Domain Name Squatters Lose – Again.

 

As any startup company that has built a consumer facing brand will tell you, there are countless names to secure, from choosing a corporate name and registering a trademark, to finding all the right social media account names on Twitter®, Instagram®, Snapchat®, Facebook®, YouTube®, and so on.  As basic as it may seem in a Web 2.0 world, a domain name is still a cornerstone of a good online branding strategy.

However, registration of a domain name is not always the end of the story.  In a recent domain name dispute before the British Columbia International Commercial Arbitration Centre (“BCICAC”), Whatsapp Inc., the owner of the registered Canadian trademark WHATSAPP (registration number TMA838338) and the provider of one of the world’s most popular mobile messaging applications, was able to wrestle the domain name “whatsapp.ca” back from an unaffiliated third party.

In December 2012, Whatsapp Inc. obtained trademark registration for WHATSAPP in Canada. In January 2015, the domain name “whatsapp.ca” was registered by a third party (the “Registrant”).  Upon discovery of the domain name registration, Whatsapp Inc. sent a cease and desist letter to the Registrant.  In response, the Registrant offered to sell the domain name to Whatsapp Inc. for some amount in excess of the actual cost of registering or acquiring the domain name.  Instead of paying a ransom for the domain name, Whatsapp Inc. proceeded to file a complaint with the BCICAC, seeking a transfer of the domain name from the Registrant to Whatsapp Inc..  The Registrant did not respond to the complaint.  Based on the complaint and the evidence submitted by Whatsapp Inc., the presiding BCICAC panel found that the Registrant had no legitimate interest in the domain name, and that Whatsapp Inc. did have common law and statutory rights to the trademark WHATSAPP in Canada.  The presiding BCICAC panel ordered that the domain name be transferred to Whatsapp Inc..

The facts leading up to the dispute are not uncommon, and the panel’s decision ultimately reinforces that a Canadian registered trademark holder may have underlying rights in a “.ca” domain name that is the same as or similarly confusing to its Canadian registered trademark (but for the “.ca” extension) and that was registered by a third party in “bad faith”. “Bad faith” can mean that the third party registered the domain name with the intention of selling, renting, or licensing the domain name to a trademark holder or competitor for some amount of profit, or otherwise profiting from unauthorized association with another party’s trademark.  The decision should also serve as a reminder to foreign and domestic corporations large and small that trademark protection and domain name protection often go hand in hand, and that it is never too early to consider brand protection on the Internet.

The hurdles to obtaining a “.ca” domain name are generally low. For example, the monetary cost of registering a domain name is typically in the single digit or double digits of dollars in registration or renewal fees a year.  In order to apply for and register a “.ca” domain name, however, a potential registrant would have to establish a Canadian “presence”.

For domestic entities, the Canadian “presence” requirement may be satisfied through, for example, citizenship, permanent residency, or incorporation in Canada. For foreign entities that do not have a physical presence in Canada, however, Canadian “presence” may be satisfied by having a trademark or official mark registration in Canada.  In the dispute above, Whatsapp Inc., a U.S. entity, established its Canadian “presence” requirement via its registered Canadian trademark for WHATSAPP.  For foreign entities who may be concerned about the applicability of the Canadian “presence” requirement in “.ca” domain name registrations, the requirement is therefore not as onerous as it may initially seem.

For burgeoning entities of a domestic or foreign origin, it is increasingly important to consider domain name protection in tandem with trademark protection, both from a branding and brand protection perspective and a legal cost perspective. The requirements for obtaining “.ca” domain names are not particularly onerous.  However, what may be problematic or at least a source of frustration is dealing with a third party who is piggybacking off the goodwill of your brand or is attempting to sell your brand back to you; fortunately, there are options other than paying an exorbitant ransom to a domain squatter.

A Startup’s Guide to the Patent Process

You have created a new invention.  It may be a game-changer in your industry; or it may be a minor (but important) improvement on an existing product or process.  Either way, you want to seek protection for your invention.  While the patent process can be highly technical and quite involved, don’t let that scare you.

Below is a summary of the typical steps in pursuing a patent to help get you familiar with the process.

1.     Performing a Prior Art Search and Patentability Analysis

In order for an invention to be patentable, it must be at least novel, inventive, and useful.  With that in mind, the first step typically undertaken in the patent process is the performance of a “prior art” search.  This is a search of the existing patent literature and other publicly available literature.  The purpose of a prior art search is to uncover any document (“prior art”) that may pose a problem to the novelty, inventiveness, or utility of your invention.  A patent agent or a patent searcher typically performs a prior art search.

If prior art documents are located, a patent agent will typically be engaged to analyze the relevance of these documents to the invention.  If a prior art document fully discloses your invention, then the invention cannot be considered new and therefore would not patentable.  If two or more prior art documents can be combined to arrive at your invention, then the invention is not inventive and therefore not patentable.  This search isn’t just about documents published by others, but is also about documents that you may have published yourself.

No prior art search is 100% comprehensive.  For example, patent applications generally enjoy an eighteen (18) month confidentiality period from the date of filing.  That means a prior art search of the existing patent literature will not capture patent applications that were filed within the past 18 months.  Also, any public disclosure around the world may be used to challenge the patentability of an invention, and this includes documents that are published in other languages or other jurisdictions.  However, a properly completed prior art search will still give you a good idea of the state-of-the-art in your particular industry and the likelihood that your invention is patentable.  A prior art search is therefore an invaluable investment regardless of its findings or outcome.

2.     Drafting a Patent Application

Assuming you are satisfied following the prior art search, you will then have to draft a patent application.  A patent agent is typically engaged for this exercise.

As succinctly stated by the Supreme Court of Canada, “[t]he patent system is based on a ‘bargain’, or quid pro quo: the inventor is granted exclusive rights in a new and useful invention for a limited period in exchange for disclosure of the invention so that society can benefit from this knowledge”.  The “disclosure of the invention” crucially important in the patent application itself.  Put in another way, a patent application may be thought of as an instruction manual for your invention.

A patent application is typically broken down into the following sections: (i) abstract; (ii) technical field; (iii) background; (iv) summary of the invention; (v) brief description of drawings; (v) the detailed description; (vi) the claims; and (vii) drawings.  While each section has a unique role in a patent application, particular emphasis is often placed on the “detailed description” and “claims” sections of a patent application.

The “detailed description” section of a patent application is, as the name suggests, a detailed disclosure of your invention.  In other words, a comprehensive description of: (i) what your invention is; and (ii) how it works.  The “claims” section defines the boundaries of the patent protection scope that you are seeking.  The “detailed description” and “claims” sections go hand-in-hand, and the subject matter forming the claims must be supported by the description of the invention set out in the patent application.  It is important to draft both of these sections correctly.  The value of your patent application primary resides in these two sections.

While conceptually simple, the actual mechanics of drafting a proper patent application are not straightforward.  Care and diligence in drafting a patent application are required in order to ensure that an invention is properly disclosed and that the legal requirements governing patents are followed.  This is again where the value of an experienced patent agent cannot be understated.

However, you can greatly assist your patent agent in the drafting process by providing him or her with easy to understand details regarding your invention.  Diagrams and other drawings are always helpful.  In order for your patent agent to draft a proper patent application, he/she must understand the invention as well as the inventor does.

3.     Filing your Patent Application

So, your patent application has been drafted.  Now it’s time to file it with a patent office and secure a filing date.

The patent system works on a “first to file” basis.  In other words, the first party to file a patent application for an invention gets first rights to prevent others from using that invention.

While many applicants will often submit the first filing of their patent application in their home jurisdiction, this may not always be the case for various commercial reasons.  In addition, there may be other regulatory issues which impact where the first filing may occur, such as: (i) the nature of the invention; (ii) who the inventors are; (iii) where the invention was conceived; or (iv) who the applicant is.  For example, in applications where there are multiple inventors with different citizenships, where the invention itself was conceived in a foreign jurisdiction or one or more jurisdictions, or where the subject matter is of a sensitive nature, care must be taken to ensure that the first filing is executed in the right jurisdiction.  An incorrectly filed patent application may result in loss of patent rights in some jurisdictions or other penalties.  Indeed, nothing in the patent system is as straightforward as it seems.

4.     Protecting your Invention in more than one Jurisdiction

Each jurisdiction has its own patent regime, and patent protection in one jurisdiction does not extend into another jurisdiction.  In other words, you must submit a patent application to the patent office of each jurisdiction that you want protection in.

Typically, you will have one (1) year from the date of your first filing to decide where else in the world you’d like to seek patent protection for your invention.  To seek patent protection in those other jurisdictions, you would simply submit a patent application for your invention to those jurisdictions and inform them of the details of your first filing.  If, at the one year mark, you are still undecided as to where you’d like to seek protection for your invention (e.g. you require more time to do market research or to investigate the commercialization potential of your invention), you may push off that decision by an additional 18 months by filing an “international” application with the appropriate receiving office.  However unlike the patent applications discussed above, the “international” application is just a time holder and never becomes a granted patent.  At the end of the lifetime of the “international” application (i.e. typically 30 or 31 months from the date of first filing), you must select the jurisdictions that you want to pursue patent protection in and file a patent application in those jurisdictions accordingly.

Choosing the jurisdictions to seek protection for your invention in is very much a business decision.  For example, it may not be business savvy to seek patent protection for your invention in a jurisdiction that you won’t ever do business in.  On the flip side, it may make sense to seek patent protection for your invention in a jurisdiction that you intend to do the most business in down the road, even if you have no immediate plans.  Discuss with your business partners and patent agent as to what may be right for your business.  Like any business asset, your patent applications should be pursued in line with your business strategies and goals.

5.     Prosecuting your Patent Application

After a patent application has been submitted to a patent office of a particular jurisdiction, that patent office will review the patent application to ensure that it complies with the applicable laws.

If the patent office discovers one or more defects in your patent application, the patent office will issue an official letter called an Office Action which summarizes those defects.  The Office Action will also provide you with a deadline to address those defects (either by argument or by amending the application).  You must respond in good faith to all issued Office Actions in order to keep your patent application alive in the jurisdiction.

Assuming that you are able to overcome any and all defects identified by the patent office, your patent application for your invention will be allowed in that jurisdiction.

6.     Bringing your Patent Application to Registration and Subsequent Maintenance

A patent application is brought to registration by paying a government fee by a set deadline.  In order to keep your registered patent in good standing, you will typically have to pay a fee by certain prescribed dates (e.g. an annual fee, a fee every 3.5 years post-grant, depending on the jurisdiction).  If such fees are not paid on time, then your registered patent may lapse, and your invention may become unprotected in that jurisdiction.  If you maintain your registered patent in good standing, then you will enjoy the fruits of your labour and investment for the duration of the patent protection period (i.e. typically 20 years from the deemed filing date of the patent application in that jurisdiction).

If you have any questions regarding the patent process, or think you may have a patentable invention, please do not hesitate to contact us.  We would be delighted to assist you in realizing your business goals.  Please note that this article is intended to be an overview of the patent process, and is not a detailed description of the patent process or a how-to DIY guide.

 

Trademarks: Mis-use it and (potentially) lose it

We recently came across a news article about the meteoric rise and current success of a young, home-grown online bartering service business. Like many other successful businesses, this business also happens to own a rather catchy trademark – the monosyllabic kind that sticks out and resonates well with consumers.  Reading about the success of a Canadian business always invokes a sense of pride.  After all, Canadians are an innovative bunch, and such business success stories affirm that already known fact!

However, the sentence that appeared directly below the title of the article was the one that caught our eyes. That sentence noted that users of the business’s services have turned to “verbifying” that business’s trademark.   For example, instead of saying “I’m going to exchange object X for object Y on the [business’s trademark] online bartering platform”, users apparently say “I’m going to [business’s trademark] object X for object Y”.  Seems like consumers have really taken a shine to the business!

At first blush, use of a trademark by the public as a verb to describe a service, or as a synonym for a good, may sound like a great thing: your company is so successful that the public equates your trademark with the very goods and services that your company offers.  Your trademark is at the tip of everyone’s tongue!  You are getting free marketing!  Your competitors appear to have some catching up to do.  However, the purpose of a trademark is to distinguish a business’s goods/services from the goods/services of others. So, in the eyes of trademark law, extensive and prolonged common mis-use of a trademark in the above manners decreases the value and strength of the trademark: it loses distinctiveness over time; industry eventually swallows up the mis-used trademark and may even adopt it as a standard industry term.  The trademark becomes generic.  What once may have been registrable may now be unregistrable or subject to invalidation if already registered.  At that point, the trademark owner unfortunately forfeits to the industry (and to its competitors) a once valuable asset.

Very recently, a large multinational company that offers internet search engine services (among other things) managed to escape the unfortunate fate of losing its trademark in the United States to genericism. But as can be seen from below, not all trademark owners are as fortunate.  And even then, the loss of trademark rights may be jurisdiction-dependent:

Term Associated Good Status in the U.S. Status in Canada
Thermos Vacuum bottles Generic Registered trademark
Aspirin Acetylsalicylic acid tablets Generic Registered trademark
Cellophane Transparent cellulose sheets Generic Registered trademark
Kerosene Lamp oil Generic Generic
Escalator Moving stair case Generic Generic
Linoleum Floor-cloth Generic Generic

Indeed, mismanagement of assets may lead to the unintended and unrecoverable loss of those assets.  A trademark is no different: it too is an asset and should be managed appropriately.  Through thoughtful business practices, you too may be able to build and protect that next successful brand.  Below are some suggestions as to how that may be achieved.

  1. Choose a trademark that is inherently distinctive

The ultimate value of a trademark is part nature and part nurture. Weak trademarks (e.g. those that are descriptive of the goods/services with which they are associated) often take time and good nurturing (i.e. good business practices) before becoming valuable.  Strong trademarks (e.g. terms that are coined or totally unrelated with the goods/services yet still associated therewith) are inherently distinctive as trademarks, yet may still fall victim to genericism if not properly managed or if used improperly.

While there is no one path to success, nascent start-up companies are urged to consider: (i) avoiding weak trademarks that could be taken as describing your goods and/or services; and (ii) choosing a strong trademark that is “made up” (e.g. Xerox®), a portmanteau (e.g. Microsoft®), or clearly not related to your offered goods/services (e.g. Blackberry®).

Takeaway: Strong trademarks inherently stand out. Weak trademarks don’t.

  1. Identify your trademark as a TRADEMARKTM

How you portray your trademark to the world does matter. In the digital age, consumers often first encounter your trademark on your website – perhaps in the description section of your business.  To bolster protection for your trademark, and to confirm in the eyes of the consumer that your trademark is a trademark, consider the following:

  • identify your trademark as a trademark by giving proper notice (e.g. through the use of “TM” for unregistered trademarks, or “®” for registered trademarks);
  • use your trademark in conjunction with the generic name of the good or service (e.g. “Welcome to the [business’s trademark]TM online bartering platform”; “[business’s trademark]TM facial tissues are soft and do not chafe your cheeks);
  • if your trademark is a “word mark” (i.e. no design or stylistic element, and just letters or words strung together), further distinguish it from the rest of the sentence by using, for example, uppercase lettering (e.g. “Welcome to the [BUSINESS’S TRADEMARK]TM internet search engine”; “[BUSINESS’S TRADEMARK]TM insulated bottles keep your tea hot, and your water cold”).

Takeaway: First impressions do matter. It is important to clearly show the world what your trademark is and how to properly use it .

  1. Be proactive in protecting your assets

One example of being proactive is to apply to register your trademark.  For unregistered (common law) trademarks, the scope of protection may be limited to its geographic scope of use; in addition, should a dispute arise, the initial onus may be on you to demonstrate the validity of your trademark.  Sometimes, a third-party may apply to register a trademark that is the same as or confusingly similar with your unregistered trademark; the cost of opposing such a third-party application would far exceed the cost that you would have otherwise spent had you applied to register your trademark in the first place.  A trademark registration, on the other hand, affords you (among other benefits) national protection for a trademark in association with an approved list of goods and services.

Preparing a trademark application is deceptively simple, and an inadvertent error in the initial trademark application may prove costly in, or even fatal to, securing a trademark registration.  While engaging a trademark professional to assist in the proper preparation of a trademark application has its cost, the cost of correcting (if possible) and/or defending a mis-prepared application may be even greater.

Also, if other people are mis-using your trademark, object to that mis-use and make that objection known. Depending on the magnitude and kind of mis-use, various legal remedies may be available.

Takeaway: Your trademark is an asset; it is up to you to protect it.

  1. Educate personnel and partners on how to use your trademark

As your business grows, you may engage employees, contractors, distributors, dealers, or other entities to help make your business operations proceed more smoothly. Each of those entities is a player in the success of your business.  As such, each of them should be on‑boarded as to how your trademark is to be portrayed or depicted in association with your goods/services.  They will be interacting with your customers and the public at large, and should know how to use and reinforce the proper usage of your trademark.  Often, the strength of a trademark is not eroded away by malicious intent, but rather by mis-use of the trademark by the public or its very owner (and associated entities).

Takeaway: Education is important. Take time to talk to your employees and associates about protecting your business’s assets.  Don’t forget to educate yourself too!

  1. Other means of protection

The above points are by no means an exhaustive list of the ways in which you can better protect the strength and value of your trademark. But they hopefully start the conversation about thoughtful business practices.

In any event, be proactive in understanding how to best protect your trademark and business brand. The concept of trademarks is deceptively simple, and it is this deceptive simplicity that unfortunately trips up businesses at inopportune times.  In the trademarks world, an ounce of prevention is truly worth a pound of cure.