Category: Law and Ethics

Consider the following quote from Friedrich II, King of Prussia, often referred to as Frederick the Great:

“He who defends everything, defends nothing.”

Consider also this quotation from Mark Twain’s Pudd’nhead Wilson:

Behold, the fool saith, “Put not all thine eggs in the one basket”—which is but a manner of saying, “Scatter your money and your attention”; but the wise man saith, “Put all your eggs in the one basket and — WATCH THAT BASKET.”

These were two pretty clever fellows, and when two clever fellows try to tell us the same thing*, it behooves us to listen. And I am certainly not averse to riding on their clever coattails to try to make a specific point along these lines. Specifically, regarding the registration of trademarks.

When one registers a trademark, one must specify both at least one class of goods and services – often referred to as the “IC,” for International Class, which is a series of 45  numbers that designate the truly bizarre divisions trademark offices like the United States Patent and Trademark Office use to categorize things – and the specific goods and/or services in association with which one is claiming exclusive rights to use the mark. Here’s an example:

From: https://tsdr.uspto.gov/#caseNumber=75894167&caseType=SERIAL_NO&searchType=statusSearch

This is what I would refer to as a “good example.” The registration has one class: IC 009, which is the class including computer software, hardware and accessories. It has two listed goods: computer game software, and mouse pads. Simple. Elegant, even. Well done, Blizzard Entertainment. (Tangent: IC 028 is for toys and games. It’s a common mistake for people to register computer games in IC 028 because they see “games,” and that’s just one extremely straightforward example of how confusing this gets.)

A little explanation is in order before we do a bad example. You pay for trademark registrations according to how many classes you want to protect. Each class is a flat fee – usually $225.00 in the US, but it varies. You can file for any number of classes in one application: you don’t get a discount for multiple classes, but if you’re paying an attorney (which, and I acknowledge I’m biased, you really, really should) you may save some in legal fees if you have them do all the classes at once.

However, what’s protected is not the class you register, but the goods or services you list in that class. For instance, this is for computer game software. If I wanted to make, say, a spreadsheet program, and use the mark “Blizzard Entertainment” in association with it, that would theoretically be okay (in this case it would be a very foolish thing to do but let’s not get into that) even though spreadsheets and games are both computer software and therefore both in IC 009. There is no theoretical limit to the number of particular goods and services you can list in a given class.

And now we get into defending egg baskets.

Here’s a bad example. At least, in my opinion. I apologize in advance for the wall of text: just scroll down to resume the article. If you are the impatient sort, click here to skip it.

From: https://tsdr.uspto.gov/#caseNumber=86968772&caseType=SERIAL_NO&searchType=statusSearch. By the way, this is the same trademark registration I wrote a post for Indie Gamer Team about. See: https://indiegamerteam.com/2017/03/27/stupid-legal-tricks-chapter-1/

Look at that listing of goods. Look at it. That is nonsensical. Now, I was young and inexperienced once too. Don’t ask me about my first interaction with the NFL’s trademark counsel: it still aches on rainy days. But whoever did this ought to be ashamed of themselves. (I know who did it. It’s in the TSDR listing. But let’s be gracious.) This is obviously a trademark attorney unfamiliar with Fred’s advice: they are trying to defend everything, and they are running a very real risk of defending nothing.

Never mind the ethics of running the meter while all that redundant nonsense was entered into the PTO’s online filing system. (Many firms charge flat fees for filing trademark registrations, which would avoid that issue altogether.) The first problem is that now they have an obligation to monitor the stream of commerce for all this stuff. There’s no point in registering a trademark for goods and services you don’t sell. Once you do, if you don’t watch out for people selling similar goods and services with a confusingly similar mark, you can lose your exclusive right to use it in various ways. That is a lot of eggs to watch. The costs, both monetary and opportunity costs, of doing so are not trivial. But more on that later.

Because the real problem is that when you enter your listing of goods and services, you are affirming to the PTO that you really do sell all the goods you are listing**. This is to prevent people from trying to stake out territory which they aren’t entitled to protect. The purpose of trademarks is to allow the public to associate goods and services with a particular source, and if you’re not a source of those goods and services you shouldn’t be allowed to prevent other people from offering them under the guise of trademark protection.

Now, King.com Limited is a successful company, a veritable mighty oak of industry whose branches spread far and wide, sheltering vast fields of commerce ‘neath their benevolent shade. But do they really make baby monitors with this mark on them? Is there really a “Super-With-Colorful-Fruits”-brand amusement park somewhere, perhaps adjacent to their sprawling corporate headquarters on Malta? I am willing to be proven wrong, but I hope you’ll forgive me if I’m somewhat dubious that this listing of goods and services is entirely accurate.

“But the Patent and Trademark Office gave them the registration,” you might say. “Isn’t it just smart lawyering to try to get what you can? If you cut a little bigger slice of cake than you should have, can’t you just put some back on the plate if need be?”

No.

If you list goods and services you don’t sell and/or have no specific intent to sell on a registration, you may have committed a “fraud on the Office,” as the legal term of art goes. And one potential sanction for committing a fraud on the Office is having your registration cancelled. Not just the part that was in error. Not just the class which was in error. The whole registration. Which makes it much harder to protect your trademark. Not impossible: we’re not going to punish the public for your mistake. But much harder. Also, it makes the lawyer who filed it look extremely bad. But that’s their problem. We’re worried about King.com, who theoretically do have a valid interest to protect here.

By trying to defend everything, they have put themselves at risk of defending nothing. Imagine the fun opposing counsel would have putting somebody from King.com on the stand at a hearing and listing out all the alleged goods. “Do you really make baby monitors? Is there a Super-with-colorful-fruits brand roller coaster in your parking lot?” Assuming they may have been a little overbroad in their listings, their credibility would be destroyed. Now, either they make a particular thing with the mark on it or they don’t, and that wouldn’t be hard to prove. But whoever’s conducting the hearing is only human, and that kind of thing leaves an impression. Plus of course there’s the whole “Did you commit perjury or are you just ignorant?” thing to contend with. Again, makes people look extremely bad. Don’t do that.

Now that Fred has had his due, let’s talk about Mark’s egg basket.

Aren’t I being contradictory? Wasn’t King.com, through its attorneys, trying to put all its eggs in one basket? In a sense, the sense that they put everything they could think of in the registration listing, they were. But in the broader sense, they were not. The eggs in question here are not the marks, nor the individual goods,***  but the valuable associations between the mark and any individual good offered by the registrant. A solid association is the essence of a trademark. And by scattering what one assumes are the actual associations (i.e., the real goods which are important products to King.com’s business and which are sold in association with the mark) in that giant morass of stuff, they have taken them out of the basket and chucked them all over the field. They are scattered far and wide, and instead of a tidy basket of business-critical marks to protect you have a giant field covered with a few important marks and dozens of trivial ones which you must guard ceaselessly. Not the best approach, in my humble opinion.

And, in the not-so-distant future, a much more hazardous one as well.

Here’s why: Under the current procedures, an applicant is only required to submit one specimen (proof that they are using the mark in association with the goods, h/t @proofofuse) per class. That means that for the registration I cited above, King.com may have only had to submit two specimens, because all the marks are either for IC 009 or 041. So they could, theoretically, find things they really do make, like a computer game, submit proof of use for that, and they’re covered for, say, online newspapers. Now, again, I’m not saying that King.com has done anything wrong. For all I know they have Super baby monitors installed on each and every Super roller coaster marketed in Malta’s finest Super online newspaper. The fact that they’re using an international registration as the basis for their US registration also complicates things and again, let’s not get into that. But as an example of the potential for abuse of the system by submitting cherry-picked specimens for each class, it does the job.

The PTO is well aware that people (not pointing any fingers) can do this, and it’s getting worse as the number of registration applications increase and people, pardon my old, get stupider. They have initiated a new rule which allows them to audit registrations. Under the new rule:

...the USPTO may require the submission of information, exhibits, 
affidavits or declarations, and such additional specimens of use as may 
be reasonably necessary for the USPTO to ensure that the register 
accurately reflects marks that are in use in commerce in the United 
States for all the goods/services identified in the registrations, 
unless excusable nonuse is claimed in whole or in part.

From: https://www.gpo.gov/fdsys/pkg/FR-2017-01-19/html/2017-00317.htm

This is right now still sort of a limited test program, but the final rule has been adopted. They can do this to any registration at any time, and they could require it for all registrations at any point. I for one could not be more pleased at this prospect. But attorneys who prefer what I call the “shotgun” approach to trademark registration listings are going to be in a world of hurt when this kicks in. They need to stop, and they need to stop now. They need to find the important eggs, put them in a nice strong basket, and watch that basket. Not only because it’s the right and legal thing to do, but because it will endanger their clients’ interests not to do it.

Finally, yes I am aware that often clients drive a lot of this nonsense. They get hold of the link to the Manual of Goods and Services, or some first-year associate trying to be thorough sends them a ginormous list of potential goods and services listings, and they get all excited. “Yes!” they cry. “Yes, we want all of that! Of course we are going to make roller coasters with baby monitors and advertise them in our online newspapers! Mike, send that list over to Product Development, stat! And in the meantime, put us down for one of each!”

Well, it’s your job as a trademark attorney to stop them. You must make clear to them that that isn’t a good idea, for all the reasons I’ve set forth. (Feel free to crib off me.) Explain to them that overreaching will give them so much to defend that they will divide their attention to the point where they can defend nothing. Don’t give them what they think they want: give them what they need, and tell them why. In the end, they will thank you for it.

Thanks for reading. If you have questions or further thoughts, please feel free to make a comment on this post. Engaged readers are the best!

*Well, okay, according to this article the Mark Twain part originated with Andrew Carnegie, but be that as it may.

**You can file “Intent to Use” registrations which do stake out territory you’re not actively using yet, but among other limitations you’re still affirming that you have a bona fide intent to use the mark with the particular goods and services you’re listing. “Roller coasters are fun, I might build a couple, who knows?” is not a bona fide intent to build an amusement park.

***Fun Fact: There are seventy-six individual goods and services listed in the registration.