Nestle’s Negative Publicity in Cyberspace – Social Media Failure

In 2010, Greenpeace® released a controversial video on YouTube regarding food giant Nestle®’s source for palm oil for their products.

The specific product targeted was the Kit Kat® bar, and the video made a play off the Kit Kat® slogan “Have a break… have a Kit Kat”. Greenpeace® claimed that Nestle®’s source for palm oil in Indonesia had dirty hands in destroying rainforests which were natural habitats for orangutans.

In addition to the slogan, the Greenpeace® video also mimics a Kit Kat® commercial, beginning with a bored office worker shredding paper for his boss for hours. He pulls out a Kit Kat® bar and bites into it, not noticing or caring that the bar is actually a bloody orangutan finger, and drips blood all over his face and keyboard.

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The video was posted on YouTube®, and went viral. Nestle®’s legal team took quick action, and had the video properly removed from YouTube. But in today’s day and age, a proper legal solution is not always a practical overall solution. Through social media channels on the internet, GreenPeace® supporters reacted strongly to Nestle®’s action, viewing it as an attempt to silence GreenPeace® and their movement. Once coupled with Nestle®’s takedown actions, the video transformed into its own beast overnight around the globe on social media networks.  Individual supporters began reposting the video all over the internet, and I assume Nestle® realized that for each video taken down, GreenPeace sympathizers would only become more emboldened, and only more videos would pop up; a publicity nightmare.

This is an example of how legal solutions are increasingly intersecting with public relations due to social media. While the legal solution did not fully achieve Nestle®’s objectives, the public relations department slightly better, releasing this letter from Nestle® to Greenpeace®.

Despite the letter, I would have recommended Nestle® to immediately deal with the video head on. A general strategy would be 1) acknowledgement of the video, 2) a response page offsite from the Nestle® main page (but include a link from the main page), 3) a social media campaign to educate individuals on Nestle®’s practices and what Nestle® was doing to ensure the safety of orangutans and rainforests, and 4) once a policy shift was made, to publicize it! During my research for this blog, it took me some time to even find the letter in the link above, only showing up 5th in Google® search results for a search on “nestle changes policy on palm oil”.

If you are going to put a good foot forward, put it all the way in front!

Chippendales and Playboy – Trade Dress in Adult Entertainment

Chippendales sought to register the “cuff & collar” look of their male dancers with the United States Patent and Trademark Office, and ultimately failed. The USPTO denied Chippendales’ attempt to register this trade dress because the “Cuff & Collar” look was not inherently distinctive, a requirement for trademark registration in the United States. 

The term “trade dress” refers generally to a business’ overall look and feel, and can be a registered as a trademark if it is inherently distinctive and serves to identify the source/origin of a product. This is a separate concept from rights in a trademark or logo, which typically covers just a logo or company name.

A federal court has stated that trade dress may include “features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques.” For example, in the famous (at least for trademark nerds!) Taco Cabana v. Two Pesos case, two Mexican themed restaurants were in litigation over restaurant decor, where Taco Cabana described its decor as “a festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals. The patio includes interior and exterior areas with the interior patio capable of being sealed off from the outside patio by overhead garage doors. The stepped exterior of the building is a festive and vivid color scheme using top border paint and neon stripes. Bright awnings and umbrellas continue the theme.”

Chippendales, a company providing live, male exotic dancing services, sought trademark registration in look of their male dancers, who wear only a bowtie collar and cuffs in place of a shirt. The company has been in existence since 1978, and adopted the “Cuff & Collar” look in 1979. They claimed that this unique uniform served to uniquely identify Chippendales as the provider of the exotic dancing service. However, the Federal Circuit doubted the distinctiveness of the uniform, and upheld the denial of registration by the USPTO.

Marks sought to be registered must be inherently distinctive. If a mark is generic or merely descriptive, U.S. trademark law will not allow a single company to have a monopoly on a generic mark, as these marks must be reserved for the general public use to effectively communicate.

In the Chippendales case, the court paid particular attention to the existence of a “Sexy Bunny Costume” for sale at a costume store, as well as  Chippendales’ own expert witness referenced an article stating “The collar and cuffs, like the bunny suit which inspired them, has become a trademark recognized, wherever women take their entertainment seriously, as a symbol of professional and sexy fun.” How embarrassing for the legal team!

Because of this ruling, the public can continue to freely and safely use the cuff and collar look without starting a ticking time-bomb for trademark infringement.

$10,000 Shoes as a Product of Strategic Branding

The future has become now, as the Nike Mag was released this past Friday, September 8th. The Nike Mag is a self-lacing shoe which made its first appearance in the 1989 film Back to the Future 2, and is all the hype here in 2011. It’s also a great opportunity to see some of the many uses of trademarks in action.

Trademark as an Indicator of Source and Quality. People around the world would agree that Nike makes a quality shoe, and having Nike back this promotional shoe lends a great deal to the selling power of this promotion. A master of brand collaboration as seen in their “Dunk” collection, amongst others , Nike also knows how to market cool, certainly helpful to this promotion of the self-lacing shoe.

Trademark as an Indicator of Sponsorship. Back to the Future 2  grossed $332 million in the box office, and another $72 million in rentals in the United States alone. The reach of this movie was widespread, and it is an iconic film series of the late 80’s and early 90’s conjuring fond memories in the minds of consumers who were children and young adults during that time. By associated the Back to the Future mark with the Nike Mag, scores of potential purchasers have been included in the reach of Nike Mag; consumers who may otherwise have no interest in purchasing a hip Nike limited release shoe.

Trademark as an Indicator of Positive Public Image. The Michael J. Fox Foundation for Parkinson’s Research is a key player in the release of the Nike Mag, with proceeds of Nike Mag sales contributed to the foundation. Michael J. Fox himself endorses the shoe on behalf of the foundation in a video, making a pitch for the foundation’s mission to cure Parkinson’s disease.

Trademark as an Indicator of Distribution. All 1500 pairs of Nike Mag are being exclusively sold on Ebay, with 100 pairs going up for auction every day for 15 days. Ebay is a strategic medium for distributing these shoes, with its auction-style purchasing serving to maximize profits for this limited release shoe in a relatively short amount of time.

The cumulative effect of the collaboration of 4 commercially significant identities is worth mentioning. As many of my peers expressed, I can’t say I’m overjoyed over the design of the shoe. However, I think there’s something to be said about the power of brand identity in driving consumer behaviour when people are paying $10,000.00 for a shoe that, isn’t necessarily the most aesthetic product out there.

Businesses can achieve the type of hype and consumer awareness exemplified here by the Nike Mag release through using their trademarks in multiple capacities, but only after consumers have a clear message of what the trademark and brand communicate.  Creating a solid company identity over time through strategic registration and enforcement of trademarks lets a company clearly communicate to the consumers it wishes to reach. If another business is using your mark, you may want to think twice about what the association between that other business and your mark will communicate to the market. Having your brand associated with too many ideas or third-party brands dilutes your trademark’s value and strength. It pays to be wary of the use of your mark.

It’s great to see the self-lacing shoes become a reality, but what I think we all really want is the hover board…

Brand Equity 101

If Apple wanted to sell just its branding (INCLUDES the Apple, Ipod, Iphone, Ipad trademarks, and the designs of Apple products. DOES NOT INCLUDE Apple’s computers, technology, vehicles, buildings), they would pull in a cozy $153 billion. Check out this list of the 29 highest valued brands in the world.

In the marketing world, “brand equity” stands for the value that marketing, public relations, and other publicity efforts adds to a product or service. Amongst business circles, this simply means more assets and an addition to a company’s overall portfolio.

Using a purely monetary example, let’s take a Sterling silver ring which costs $25 USD to make, considering the material, craftsmanship, and time. Now, this ring is quite a beautiful ring, a ring that resembles two interlaced silver bands. But you don’t know this silversmith, or his work, and at the time you make the order you don’t know how the ring will turn out. If you reluctantly agreed to make a purchase order for $25, then you have paid for the silver, the silversmith’s skill, and the silversmith’s time.

Now, let’s say this silversmith is hired by a certain well known jewelry company, and he makes the same exact ring using the same materials and craftsmanship. However, now the ring is sold for $325, and consumers are willing to pay for it. What happened? Brand equity happened.

There are many parts of brand equity, and it can inculcate many perceptions in the minds of consumers. While difficult to quantify, it is also difficult to argue that brand equity is fictitious when love-struck men are lining up to pay hundreds of dollars for silver jewelry, just because it says “Tiffany” on it. Perception of quality and brand awareness, association, and loyalty are all tied to how much money consumers are willing to pay for a brand, and thus, an indicator of brand value.

A failure to properly guard your intellectual property can lead a court to find that your rights are weak or nonexistent, and allow others to benefit from your efforts in building your brand. Registering trademarks, company names, package design, and unique store layouts are examples of methods you can use to protect your brand equity from other companies who will try to pass off their goods as yours.

Protect Your Brand, #1

Beware of electronic and physical publications which use your logo in a way which suggests your sponsorship. Companies may be motivated to use logos of other brands which may be more well-known in the industry, for the purpose of trying to boost their own image.

For example, let’s take a hypothetical company, DesiKicks, which designs brilliant shoes but has no reputation for quality, long-lasting shoe construction. DesiKicks implements a marketing plan which includes creating a new page on their website, promoting the long-lasting features of their shoes. So far, so good. But DesiKicks would cross the line if, for example, they prominently placed a Nike logo on that page, because it implies that Nike is sponsoring DesiKicks. While the implied message may or may not be true, under U.S. trademark law, Nike reserves the full right to control what their brand is associated with.

Think twice about letting other companies use your logo on electronic or printed materials. Your logo is part of your brand identity, and giving someone else broad freedoms to use your logo can lead to consumers, including your existing customers, having misguided impressions about your company. If your logo is associated with unseemly brands, negative political affiliations, or opinions you and your company do not want to be aligned with, you stand to lose control of your public image in the marketplace.

THINK ABOUT: Having a “linking” license agreement with another company before allowing them to use your logo and/or branding on their own website. This agreement can help you structure exactly how, or how not to, use your logo.

Trademarks and Your Business

Trademarks are a very important, and often overlooked, part of a company which does business across state lines or over a large geographic area. The more successful a company gets, the more likely someone will attempt to copy that success, and frequently, this involves a new company imitating the identity of the successful company.

U.S. federal law defines “trademark” as any word, phrase, symbol, or device, or a combination of these, used by someone to “identify and distinguish his or her goods…from those manufactured or sold by others and to indicate the source of the goods.” This article will unpack this definition.

First, you should know the different types of protections that copyrights, trademarks, trade secrets, and patents provide.

A trademark signifies your company’s identity, whether the mark is a word or a logo or a slogan. It works much like your personal name; when someone mentions your name to your social circles, others will match you and your reputation to your name. A trademark operates the same way for a business. When you see the Yahoo! mark, or when you see the Google mark, what do you think/feel about those companies? Do you think/feel different when you see the Ferrari or Toyota mark? That’s the effectiveness of a strong trademark which has had millions of dollars invested into it. It’s identity, and it should be protected much like defamation laws protect your personal name.

When your trademark is successfully registered with the U.S. Patent and Trademark Office (USPTO), the federal government essentially guarantees you, the trademark owner, several rights. If someone else tries to imitate your trademark, you can use federal courts to stop the unauthorized use and sue them for profits gained from imitating your trademark. You can see the value in this if you can imagine how much money you could make if you could start a shoe company tomorrow and slap a Nike Swoosh on every pair.

In cyberspace, trademark owners have rights against those who register domain names similar to  a registered trademark, and then uses that registration to drive traffic away and profit from a trademark owner’s webpage. For example, if someone registered <cloroxx.com> and sold their own brand of bleach, or if someone registered <nykee.com> and sold footwear on the site.

When you register a trademark, you own it. Like other types of property, you can lease it to others to use, and for a price. This is licensing. When your trademark is very strong, others will want to use it to harness the selling power of it. This is very similar, and sometimes a part of, franchising: the trademark owner has a tried and true mark which sells products because of its good reputation, and the trademark owner can license that mark to others who want to use the mark to their advantage.

I hope this helps young entrepreneurs with conceptualizing what a trademark is and how registering a trademark can be a benefit. As always, The Law Office of Cliff Kuehn can always be contacted for further questions at ck@cliffkuehn.com.

–  ck

Think About That Domain Name Just a Little More.

Through Domains by Proxy, a domain privacy service, someone registered Children’s Laughter dot com. Problem is, someone forgot to see how that looks in url-form, and how it may be misconstrued: http://www.childrenslaughter.com.

Good thing it only took them three days to fix the problem, by purchasing http://www.childrens-laughter.com, and having http://www.ChildrenSlaughter.com redirect there.

Number 1 Mistake Made When Filing a Trademark Application Without a Lawyer

The number one problem I see the most with businesses filing their own
trademark applications is the failure to “disclose” parts of their
mark which are not protectable. Fortunately, this is an easy problem
to avoid, and even if the problem is not avoided, it only causes a
delay in the trademark application and time to fix the problem. But
let’s avoid that.

U.S. trademark law protects “inherently distinctive” marks. If you
have a distinctive mark with non-distinctive components, only the
distinctive part is protectable. The non-distinctive parts must be
“disclaimed”.

For example, Zynga is a very distinctive name, derived from one of the
founding partner’s dog’s name. If they were to apply for trademark
protection for “Zynga Online Games,” the application must disclaim
“Online Games” because it is a generic term. The USPTO will not grant
trademark protection to generic or descriptive terms because those
terms are reserved for other companies in the business of online
gaming. Thus, the end result is that while the mark is “Zynga Online
Games”, only the “Zynga” part of the mark is granted protection.

The Fix: After the initial part of the online trademark application asking for all your contact information, you will be asked to enter the words of the mark you are seeking trademark protection. You will then have a chance to “Preview USPTO-Generate Image” (Slide 1). Immediately after this section, check the small box next to “Check here to display the full listing of additional statements from which you may make your selection.” This will display a whole list of options, but the only one relevant to this article is the first item “Disclaimer” (Slide 2). There is a box you can enter the words you wish to disclaim, and here is where you enter the generic and descriptive terms of your mark. It will ultimately read “No claim is made to the exclusive right to use [ONLINE GAMES] apart from the mark as shown”.

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– ck

3 Advantages of UDRP Over Litigation in Cybersquatting Situations

Using the UDRP process to resolve domain name disputes has many advantages, and can be summarized into three main reasons. Domain name disputes bring particularly interesting issues to the table because of the way domain names are regulated and managed, and the UDRP process is a simple and quick process to deal with issues that could be much more complex and resource-consuming. To briefly illustrate, ICANN is a nonprofit, non-governmental organization which, for all practical purposes, is the lead regulator of all the world’s domain names. However, individual countries also have their own sets of rules and regulations for trademarks, which are greatly related to domain name disputes. Many problems arise at this intersection of domestic law, and international law rooted in treaties and other multilateral agreements.

1) The UDRP is quick & easy

The typical timeline for a UDRP case, from filing of a complaint to completion of the process, is 60 days, which is relatively short compared to the uncertain timelines with federal litigation. Also, only one document needs to be submitted by the Complainant, and one Response filed by the Respondent. Once a complaint has been filed, a Respondent has 20 days to respond, and WIPO will assign a Panelist within 5 days after a response has been made. Panelists are required to issue a decision to the relevant domain name registrar within 14 days of being assigned, and then the registrar is required to carry out the decision within 10 days.

2) The UDRP uses Panelists who are experts in trademark and domain name issues. 

Have the confidence that your domain name rights are being assessed by experts in the field, as opposed to federal judges with caseloads containing a small fraction of trademark cases, and even fewer domain name cases. Expert Panelists minimize the risk of faulty decisions which may lead to more expensive appeals made by a party who is wronged by a decision. Additionally, Panelists are drawn from all over the world, and may likely have more expertise on the subtle international issues present in cybersquatting cases.

3) The UDRP is an inexpensive process. 

The majority of UDRP cases are administered by WIPO in Geneva, Switzerland (“OMPI” locally), where cases involving 1-5 domain names and heard by a single Panelist costs $1500.oo USD, and a panel of 3 costs $4000.00 USD in fees. Fees are payable by the Complainant. Lawyer’s fees typically range from $3500.00 to 6000.00 USD in addition to the WIPO fees. Thus, Complainants could have a decision for under $10,000.00 USD, where federal litigators will easily ask for a $10,000.00 up front retainer just to begin federal litigation; litigation which tends to have an uncertain path and future costs.

– ck

Even Motorcycle Gangs Get Trademarks

Mongols Trademark Registration Certificate

After about two years of prosecution, a federal judge ruled that the motorcycle gang “Mongols” get to keep their trademark registration. The Mongols Nation Motorcycle Club, Inc., the gang’s legal name, began using their named trademark in 1969 soon after the group of Latino Vietnam veterans formed the gang after being denied entry into the Hell’s Angel motorcycle club. The design mark shown to the right was registered in 2006. When federal prosecutors filed an indictment against the Mongols in 2008 for charges ranging from racketeering to money laundering, one of the things they sought was forfeiture of the gang’s trademark, meaning ownership would pass to the U.S. government. I personally have not heard of the government pursuing a route like this before; essentially an attempt to usurp a defendant’s identity!

One of the rights that comes with owning a trademark is the ability to stop and/or sue for damages for unauthorized use of the mark. I am curious as to how the feds would have used this right. It would be very interesting to see FBI pulling over Mongol members on the highway and ordering them to remove patches or face trademark infringement claims!

-ck