Monday, September 1, 2008

A New Battle Is Beginning in Branding for the Web


For the empirical proof, look at the filings with the government for new trademarks that, put simply, are brand names.

Applications surged in the dot-com years, peaking in 2000 and then falling sharply for two years, before rising to a record last year of more than 394,000.

Recently, a new front has opened in the Internet branding wars.

It lies beyond putting trademarks on new businesses, Web site addresses and online logos. Now, companies want to slap a brand on still vaguely defined products and services in the uncharted ephemera of cyberspace — the computing cloud, as it has come to be known.

Cloud computing usually refers to Internet services or software that the user accesses through a Web browser on a personal computer, cellphone or other device. The digital service is delivered remotely, from somewhere off in the computing cloud, in the fashion of Google’s Internet search service.

Dell has tried to trademark the term cloud computing itself. But in August, the United States Patent and Trademark Office sent a strong signal that cloud computing cannot be trademarked.

It issued an initial refusal to Dell, which filed its application 18 months ago, when the term was less widely used in industry conversations and marketing.

Dell had passed early steps toward approval, but the office turned it down, after protests from industry experts that cloud computing had become a broadly descriptive term, and not one linked to a single company. Dell can appeal, but that seems unlikely.

In recent years, patents — not trademarks — have been the main focus of intellectual property experts and the courts, especially around the issue of whether patents on software and business methods have become counterproductive, inhibiting innovation.

But some legal experts say trademark issues may take on a higher profile, fueled by the escalating value of brands in general and trademark holders increasingly trying to assert their rights, especially on the Internet.

“Trademark is the sleeping giant of intellectual property,” said Paul Goldstein, a professor at the Stanford law school.

Microsoft, for example, is developing a technology that is intended to synchronize the data on all of a person’s computing devices, even synchronizing it with family members and work colleagues as well, automatically reaching across the cloud.

When Microsoft announced the concept this year, it said the technology would be called Live Mesh. Just what it is and how it may work remains unclear, but Microsoft filed for a trademark on Live Mesh in June, an application that awaits judgment from the Patent and Trademark Office.

Mesh and mesh networking are widely used terms for technology that connects devices.

“This is the challenge for our examiners,” said Lynne G. Beresford, commissioner for trademarks in the Patent and Trademark Office. “With emerging marks in a field that is changing quickly, you have to make a determination about what the common understanding is.”

That challenge, legal experts say, is one of several for trademark policy and practice in the Internet age. Instant communication, aggressive business tactics and an unsettled legal environment, they say, mean that trademark disputes on the Internet will increase in number and intensity.

The first round of trademark conflict on the Internet, focused on cybersquatting, has subsided. Cybersquatters were early profiteers who bought up the Web addresses, or domain names, of well-known trademarked brands, and then tried to charge the companies huge amounts of money to buy them.

In 1999, Congress passed a bill against cybersquatting that allowed companies to sue anyone who, with “a bad faith intent to profit,” buys the domain name of a well-known brand. The same year, the Internet Corporation for Assigned Names and Numbers, a nonprofit oversight agency, established a system for resolving domain name disputes.

The new areas of conflict, according to legal experts, include trademark owners trying to assert their rights to stifle online criticism of their products, and to stop trademarked brands from being purchased as keywords in Internet search advertising.

Early court rulings in keyword cases point to the uncertain legal setting and the international differences in trademark law. In the United States, lawyers say, the initial rulings have tended to allow companies to buy the trademarked brand names of rivals as keywords in search. Ford, for example, can bid on and buy “Toyota,” so that a person typing Toyota as a search term would see a link to Ford’s Web site in the paid-for links on the right hand side of Google’s Web page.

In the United States, that practice has not been interpreted as causing any fundamental consumer confusion. Google also argues that because any bidder can make an offer for any word — Google supplies no list — it is not a user of trademarks. “We are not using keywords, we are not selling keywords, we are selling ad space,” said Terri Chen, Google’s senior trademark counsel.

But in a French court ruling in 2005, Google was enjoined from allowing others to buy as a keyword the trademark brand of a French luxury goods maker, Louis Vuitton. For countries other than the United States, Canada, the United Kingdom and Ireland, Google has a trademark complaint system, so holders can generally prevent their brands from being purchased as keywords by others.

The speed of Internet communication and heightened competition to claim and establish brands have drastically changed trademark tactics over the years. Compare the positioning and pre-emptive moves around cloud computing with the gradual pace of building one of the most valued brands in the world, Microsoft’s Windows.

The use of personal computer windows and graphical user windowing systems were around long before Microsoft announced its plans for a Windows operating system in 1983. The first version was introduced in 1985, and Microsoft did not file for a trademark until 1990. Its application was initially rejected as “merely descriptive.”

But, as so often, Microsoft persevered. It kept investing in advertising, branding and product development. It presented the Patent and Trademark Office with surveys showing people had come to associate the term Windows with Microsoft, and in 1995 the trademark examiners finally agreed.

With its cloud computing project Live Mesh, Microsoft is taking a far faster, more focused approach. It is employing Live, which it uses in other Internet offerings, like Windows Live and Xbox Live, as half of a two-word trademark — or composite mark, in legal terms. “Mesh networking is the generic category, but Live Mesh is Microsoft’s implementation and acts as a source identifier,” said Russell Pangborn, Microsoft’s director for trademarks.

One thing that has been undeniably transformed by computing and the Internet is the trademark office itself. Ms. Beresford, a professed “trademark nerd,” recalled that when she joined the office in 1979, searches for the same or “confusingly similar” trademarks began in the “search room.” The applications and registration documents were kept in wooden cabinets, filed alphabetically.

Trademarked images were kept in separate drawers and grouped into visual categories, she recalled, like “grotesque humans” (the Pillsbury doughboy) and “human body parts” (the Yellow Pages’ walking fingers).

Examining attorneys, Ms. Beresford noted, were issued rubber covers for their index fingers for going through files faster and with fewer paper cuts. The technology tools have been upgraded considerably since then. The work is now done mainly on computers, searching the Web and specialized trademark databases. Eighty-five percent of the office’s 390 examining attorneys work primarily from home.

The search room, Ms. Beresford observed, has “gone the way of the buggy whip.”

Copyright 2008 The New York Times Company
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