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CRYPTO and NFTs under the Lens of Trademark and Copyright Law

Posted on by trademarkangel

Can you trademark your NFT? What about trademarking cryptocurrency? This article will discuss this in depth.

New forms of digital property, such as cryptocurrencies and non-fungible tokens (NFTs), are not yet fully addressed by existing intellectual property law. Let’s finally take a deep dive into these technologies, shall we?

Bitcoin, Matic, Dogecoin, and Ethereum. We all know them as cryptocurrency. A cryptocurrency, Merriam-Webster dictionary defines, is any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions.

But NFT is a newer technology. An NFT, or non-fungible token, is a digital asset based on blockchain technology used to power cryptocurrency. Investopedia describes NFTs as cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other.

The practical uses of cryptocurrency in the modern world are for transmitting value, i.e., payment, across a decentralized network of users without government intervention. NFTs, however, are used to verify ownership of digital goods.

Simply stated, NFTs represent digital goods while cryptocurrencies are for digital money. It is important to remember that the key characteristic of NFTs is exclusivity.

Authenticity and Brand Protection

Because NFTs offer exclusivity, it has become a means for rights owners to attach authenticity as an integral element to their digital properties. It is for this precise reason that NFTs have become a new and possibly better approach to protect brands from fraud, forgery, and infringement – crimes that hamper the e-commerce industry.

Is NFT an Intellectual Property?

This has become a subject of debate up to this date. Is it copyright or a trademark? To resolve these legal issues, let’s step back a bit.

Intellectual Property

Generally, according to the World Intellectual Property Office (WIPO), intellectual property refers to creations of the mind, such as inventions; literary and artistic works; designs; symbols, names, and images used in commerce.

Trademark

Specifically, the United States Patent and Trademark Office (USPTO) defines a trademark as any word, phrase, symbol, design, or a combination of these things that identifies your goods or services.

Copyright

The United States Copyright Office (USCO) describes copyright as a type of intellectual property that protects original works of authorship as soon as an author fixes the work in a tangible form of expression.

Distinction Between NFTs and IPs

So, from a legal perspective, an NFT is not akin to a trademark or copyright. Although an NFT is, at one point, a creation of the human mind, it is unlike a trademark that serves as a source indicator of goods and services. It is also not copyright that protects authorship of original works. However, we should be on the lookout for legal luminaries who may offer alternative schools of thought on this matter.

While the world is yet to reconcile NFT and IP, let’s talk about what we know so far – both share similarities and are complementary.

An NFT may not be a tool for consumers to identify one business from others, it offers a means for them to validate the authenticity of the goods and services.

An NFT may not protect the rights of the author of original work, it does offer a means for copyright owners to autograph their original creations.

Does this mean NFT can be trademarked?

Yes. If you designated a brand to your NFTs, then you have an NFT Trademark which can be registered at the USPTO.

A trademark registration gives you a bundle of rights, one of which is the exclusive right the use your brand in connection with goods and/or services identified in the registration. Simply put, by registering your NFT brand, you obtain the ability to prohibit others from registering and using marks that may be similar to yours.

The modern world has become more and more competitive and you don’t want to risk your NFT brand by putting it out there without a trademark registration.

At the USPTO, the first NFT trademark to register is SCULPTSY SCULPTURE FOR THE MODERNIST IN YOU (U.S. Registration No. 6590459) registered on December 14, 2021.

One of the latest registered as of the date of the writing is ANYONE GLOWS ((U.S. Registration No. 6731817) registered on May 24, 2022.

Another popular NFT trademark that obtained registration is KOLEX (U.S. Registration No. 6741210) which, according to its website, “has developed the most advanced and feature-complete platform for creating, distributing and trading NFTs at scale.”

Does this mean NFT can be copyrighted?

Not quite. It is the original work that is automatically protected as the copyright, not the NFT because an NFT is just a representation of the underlying work and not the work itself. Copyright owners have to initiate actions, i.e., converting original digital copyrights into NFT. However, when it comes to selling NFTs, having a copyright registration is an advantage.

NFTs free copyright infringement – Copyright registration tells your buyer you did not just transform someone’s original work as NFT. It gives your NFTs legal integrity, thus increasing their value.

Copyright as an independent property – If you sell an NFT, the copyright to the material is not automatically transferred because it is a property on its own. As such, it has to be subject to another agreement which is an avenue to earn more with NFTs.

OpenSea is a marketplace where one can create, sell and buy NFTs.

Any work in the platform is originally created by someone who from the moment of creation is the copyright owner by default. By putting work in the NFT marketplace, the creator can sell it as an NFT. If another person buys it, he will now become the owner of NFT, but not the copyright to the work. An express agreement has to be in place to transfer the copyright to the buyer.

If you have a copyrighted work that is being traded-in any NFT marketplace without your authorization, then you have a cause of action against the service provider. OpenSea has a copyright infringement report system in place.

Why is Copyright Registration Important for NFT?

Under the relevant copyright laws, the creation of an NFT constitutes a copy or a derivative of the original work. As such, only the copyright owner has the exclusive authority to upload or attach NFTs to the original work.

Hence, copyright registration confers copyright owners the right to prevent others from offering copyrighted works as NFTs without authorization.

Register your NFT trademark or copyright with Trademark Angel. If you been geeking out about NFTs and IPs recently and thought of incorporating these to scale up your business? You’ve come to the right place. Email or call us with your questions.

Product Designs: Trademarkable or Copyrightable

Posted on by trademarkangel

Developing and managing an intellectual property portfolio can provide your business a competitive advantage in today’s marketplace by increasing your business value and attracting investment and partnership opportunities, among others. But it can be complicated if you have a hard time determining whether a given intellectual property asset is a trademark, patent or copyright.

Among the different intellectual property types, two common but difficult-to-distinguish types are trademark and copyright. 

Do these legal concepts overlap? 

Generally, trademark and copyright are distinguishable by principle. Copyright protects original works while trademark protects distinctive marks. In other words, a trademark is for the business name or logo; while, copyright is for marketing materials, such as product photos.

But nuances in the law are inevitable. An intellectual property may be both copyrightable and trademarkable, such in the case of a product design.

Since a product design functions either or both as a source identifier and/or as an original creation intended for marketing purposes, it may qualify either or both as a trade dress and/or a copyright of a separable design feature on a useful article.

Product design as a trade dress

A product design is registrable as a trade dress. TMEP 1202.02. 

According to Wikipedia, trade dress is the characteristics of the visual appearance of a product or its packaging (or even the design of a building) that signify the source of the product to consumers. 

Some examples of a trade dress are:

  • the design of a product (i.e., the product shape or configuration);
  • the packaging in which a product is sold (i.e., the “dressing” of a product), 
  • the color of a product or of the packaging in which a product is sold, and the flavor of a product;

To illustrate further, the bag design below(Fig 1) is registered as a trademark or trade dress. 

Fig. 1

Note, that the bag design is not a business name or logo but a product design which is nevertheless registrable as trademark or trade dress. 

When not registrable as a trade dress

A product design cannot be registrable as a trade dress if is “essential to the use or purpose of the article or if it affects the cost or quality of the article.” TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 33, 58 USPQ2d 1001, 1006 (2001). TMEP 1202.02(a)(iii) (A)

For instance, the Board affirmed registration refusal of the motorcycle design (Fig 2) because the particular design is functional.

Fig 2

In the same vein, the Board refused registration of the “half-moon shaped pull-tab (Fig 3) of an inner container seal”.

Fig 3

The Board had this to say:

“…all of the elements of Applicant’s design affect the performance of Applicant’s pull-tab as a method for removing Applicant’s seals, and that the combination of these design elements results in a design that is, as a whole, functional.” 

 

Product design as a separable feature of a useful article  

Likewise, a product design is copyrightable as a separable feature of a useful article. Compendium of U.S. Copyright Office Practices, Third Edition, 924.3(F) (the copyright law only protects separable “pictorial, graphic, or sculptural features” that are “incorporate[d]” into the design of a useful article. 17 U.S.C. § 101)

In the case of Mazer v. Stein, the respondent registered a pair of statuettes, which were intended to be used as table lamps “with electric wiring, sockets and lamp shades attached.” 347 U.S. at 202. Pictures of one of these items are shown below. 

A lamp is a useful article, because it provides illumination. The lamp base would also be considered a useful article, because it is normally a part of a lamp, and it has an intrinsically useful purpose: It supports the bulb, socket, and lamp shade. 

Applying the separability test to this element is straightforward. The base is a statuette, and if it was imagined apart from the lamp, it would be considered a sculptural work. The statuette would not be intrinsically useful if it was conceptually removed from the lamp and considered on its own. Id

When not registrable as a copyright

A product design cannot be copyrightable if the product design is inseparable, and if separable, the artistic feature does not qualify as a non-useful pictorial, graphic, or sculptural work on its own. Compendium of U.S. Copyright Office Practices, Third Edition, 924.3(E).

As an example, the Copyright Board refused registration of the oval-shaped design (Fig 4 below) because “no matter how pleasing or attractive a work may be, “copyright law does not protect the overall form, shape, or configuration of the useful article itself.”

Fig 4

COMPENDIUM (THIRD) § 924.3(F); see Star Athletica, 137 S. Ct. at 1010 (recognizing that a design feature cannot “be a useful article” in and of itself 

or “[a]n article that is normally part of a useful article”)

Product design as both trade dress and copyright

A product design which is not useful and separable from an article may qualify for a dual or hybrid IP protection, that is both trademark and copyright protection.

To be clear, there is no registration system for hybrid IP protection. As such, you must file separate applications for the trademark and copyright registration.  

Ask TRADEMARK ANGEL

As rights owner, it is vital that you protect your intellectual properties in this era wherein information are easily accessed online. 

At TRADEMARK ANGEL, we make it our life mission to provide rights owners their intellectual property needs in a strategic, efficient, practical and cost-effective means.

If you are rights owner seeking protection but are intimidated by the complexity of intellectual property or discouraged by the hefty attorney’s fees, you only need to ask, and an Angel from our team will be ready to assist you. 

Contact us to take advantage of some of our free services, such as, a free 20-minute consultation, free preliminary trademark clearance search, and free copyrightability test.

Dividing a trademark – what does it mean and when should you consider it?

Posted on by trademarkangel

Why and how are trademark applications divided in Canada and the U.S.?

If you have reached this article about dividing a trademark, then chances are, you already know that a trademark application is a step-by-step procedure and heavily involves classification of goods/services that a trademark is being used on or is intended to. Two of the most important stages of an application are the examination stage and the opposition period where applicants may face obstacles to the successful registration of their trademarks. At the examination stage the obstacles come from the Trademarks Office examiner and at the opposition stage they may come from 3rd parties.

A procedural maneuver that allows a trademark to be allowed when its application would have otherwise been barred entirely is the requesting for the division of an application.

 

During Examination

A trademark application in US and Canada becomes problematic during examination when any of the following occurs:

  • If a confusion objection is raised with respect to particular goods or services of an application; or

 

  • If a clearly descriptive objection has been raised or maintained in relation to some of the goods or services of the application.

An applicant will usually first try to argue against these objections. If the examiner maintains or insists on the objections, the applicant may decide to divide the application.

When an application is divided, a child application will be created for the classes, goods and/or services that the examiner did not find any issue with. The child application will proceed to publication in the US or to advertisement in Canada.

The problematic classes, goods and/or services will remain in the parent application and will remain pending in the examination stage until the objections are overcome by the applicant.

Dividing a trademark in Canada:

 

During Opposition

In both the US and Canada, an application may successfully pass the examination but face an impediment if a third party filed an opposition against the application. Any third party who believes that they will be damaged by the registration of a trademark may file an opposition. Third parties will usually point out the classes, goods and/or services that they have a problem with.

An applicant may divide the application to carve out some of the classes, goods and/or services that are not being opposed by the third party or are unrelated to the opposition issues.

Similar to dividing a trademark during examination, a child application will be created for the classes, goods and/or services that the opposing third party does not have any issue with. The child application will pass the opposition stage and proceed closer to registration.

The opposed classes, goods and/or services will remain in the parent application and will remain pending in the opposition stage until the opposition proceedings are terminated.

During Allowance for US Applications with Classes Based on Intent to Use

In the US, a trademark must first be in use in commerce. If an application with multiple classes based on intent to use is allowed, a Statement of Use must be filed and accepted before the application is issued registration.

It is possible for an applicant to be already using the mark in some of the classes covered by the application but not in all. In which case, the application can be divided.

A child application will be created for those classes that are already in use or for classes for which a statement of use will be filed. The child application will thereafter proceed to registration.

The classes that are still not in use will remain in the parent application. The parent application will remain pending and will need extension/s of time until the Statement of Use is filed.

Dividing a trademark in Canada:

In Canada Statement of Use is not required, so dividing at this stage will not be applicable.

Should you divide your application?

In many cases, dividing your application is advantageous. It allows you to create a 2nd independent application that will proceed to registration sooner. However, sometimes, it makes sense not to divide. Please consult with us if you are considering division of your application to see if it should be considered in your case.

Division of Application Fees

Division of an application is not part of our regular packages. In both the US and Canada, we charge $200 to divide an application and in the US the USPTO charges $100.

In addition, if you are dividing one class into two parts, you will be required to pay another filing fee of $350 because from the USPTO’s point of view, you are creating another class/application.

For example, let’s say you decided to divide your trademark application in class 25 that was filed for “swimwear; t-shirts; sweat shirts; pants; jackets”. You already sold swimwear but have not sold any other items of clothing, so “swimwear” will be put in a new child application and given a new serial upon filing of the Statement of use and upon payment of the extra government fees (US$100 to divide+$350t for the new class+$100 for the Statement of use, if filing it at the same time as the division rquest), while “t-shirts; sweat shirts; pants; jackets” will be kept in the parent application.

When you file another Statement of Use for your “parent” application (in our example for the remaining clothing items), it will require the payment of an additional government filing fee of $100 per class.

Our professional fee to file a Statement of Use is US$200 plus $50 for every additional class if you have filed for more than two classes and selected our SAIL THROUGH package. We don’t charge anything extra if you selected the ALL IN or BELLS AND WHISTLES package.

If you need to file for an extension, you will be required to pay a $125 government filing fee per class. Up to 5 extensions of 6 months each can be obtained from the USPTO. Our professional fee will be US$100 (for the SAIL THROUGH package). If you selected the ALL IN or BELLS AND WHISTLES package, there will be no additional professional fees.

In Canada, if the government filing fees were paid in the original application they would be considered as paid in any divisional application so there would be no extra fees for the request to divide.

If you have any questions about the division of your trademark, please don’t hesitate to contact us.

Dividing a trademark:

Article co-authored with David Bellen.

 

 

 

What should tech startups do to legally protect their business?

Posted on by trademarkangel

Many new and aspiring business owners are reluctant to share their new business idea. The is of course a risk that by sharing an idea with others that the idea could be copied and produced as a competitor. While this fear may be founded, you should understand how you can legally protect your startup, as there are a few options.

Over the last 5 years, the rate of business creation within the tech industry has continued to increase so it’s important for all new ventures to protect their identity.

Can a business startup protect an idea?

You cannot protect a business idea. This comes as a surprise to many new business owners. While a business idea cannot be protected, creative expressions of an idea can be protected. Examples of artistic expressions can be a painting, an article, a song, music or a poem. All of these are protected by copyright. A business idea itself is not considered an artistic work and cannot be protected.

The name, however, under which a startup proposes to trade could be registrable as a trademark.

Similarly, if the business idea is to produce or make a new and innovative product then, this creation/invention may be protected through a patent. Every case is individual and should be referred to an expert before a decision is made.

How can you protect a startup?

Use a non-disclosure agreement (NDA) – As in most cases, you cannot protect a business idea, an NDA is a great option and can be used to prevent other people and companies from sharing the idea. Developers, employees and others with whom you share your idea with can be bound by an NDA.

An NDA is a legal contract between two people or entities that states what information will be shared between them and what information cannot be shared with other people or companies.

Some cautious tech startups have a policy of getting everyone to sign an NDA including investors. Some consider this to be an unnecessary step so it is advisable that you remain flexible when dealing with investors, especially when they have a large stake in your business.

Some cautious tech startups have a policy of getting everyone to sign an NDA including investors. Some consider this to be an unnecessary step so it is advisable that you remain flexible when dealing with investors, especially when they have a large stake in your business.

Start building your business beyond the idea stage – As a tech startup, you will have to create an initial base code, which could be eligible for copyright protection. If you hire developers to work for you, then you should ensure to assign the copyright to yourself as the business owner. Copyright protection relies on clear ownership and you should keep all records that prove creation and/or authorship so that the copyright can be verified.

One area for consideration is that open source frameworks and platforms (WordPress, Drupal and others) are copyright of their creators and are available under specific creative licenses. You should know that if you are to build any part of your startup using these or other open source tools, you will not be protected under copyright laws.

Consider filing a patent application if possible – A patent protects new inventions or improvements to these inventions that have unique features or elements. However, in the UK and the EU, computer software programs usually cannot be protected by filing a patent. There are exceptions to this rule, but you have to create a new method or coding process to obtain a patent.

A software app or part of it may fulfill the necessary requirements to obtain patent protection. It is best to get advice from an intellectual property professional who can advise you on whether your tech startup is protectable through a patent.

If you are in the process of creating a totally innovative product that didn’t exist before, then a patent may be necessary so that you can aim to prevent others from making unauthorized use of your innovation.

Patents are usually quite expensive so you should allocate a budget for a patent application.

Protect your brand by a trademark – Unfortunately, many successful startup ventures don’t bother with filing a trademark and allow others to use their brands. By filing a trademark, a startup may prevent others from using and registering identical or similar names and this will avoid trademark confusion among potential customers.

A trademark will make it easier to enforce your rights and to stop copycats in the markets you plan to trade within. You can trademark your name, logo, slogan and even a specific design. By registering a trademark in all jurisdictions where you trade and make business, you will protect yourself from being copied by others.

Having a tech startup can be hard work. Knowing how you can protect it is important. If you are in the position to file for a trademark, use our free trademark search service to the first check if a similar or existing trademark has already been filed. Our expert team offer cheap trademark registration in the USA, Canada, EU, UK and now Australia too, to support your business, whatever stage it may be in.

Launch before you file or file before you launch?

Posted on by trademarkangel

When is the best time to file a trademark?

–Does the chicken come before egg or the egg before the chicken?–

We are often asked this question: When is the best time to file trademark?

This question is especially important for Amazon sellers as they have the additional pressure of getting into the Amazon Brand Registry. When can you get into the Brand Registry? When you have a registered trademark. So, that means the sooner you file, the sooner you will get a registered trademark, right?

Not so fast.

We’ve seen this a lot: Business owners and Amazon sellers feel this itch and unstoppable desire to file their trademark as soon as possible without really doing a proper analysis. They want to file for everything, i.e., keep their application as broad as possible because they don’t know what they will be selling in a year.

But, we don’t recommend jumping right in.

Yes, it is important to file as soon as possible. But, before a trademark can be filed, there are two important things that you must consider.

  1. It is essential to determine what products you will sell and what services you will offer. You see, in the US and Canada, your trademark will not register until use of the mark commences on all of the products and services listed in your trademark application. However, for Australian, EU and UK trademarks, use of the mark before registration is not required. So, if you file in Australia, the EU, or the UK, you can file trademark and achieve registration without having to use the mark before it registers.

In Canada or the US, before a trademark is filed, a business owner must come up with a business plan and determine what goods and/or services will be included in the trademark application.

Tip: Make a list of products that you want to include in your trademark application. The list must be fairly detailed: instead of “food products,” you must specify which kind of foods you want to sell, such as “chocolate” or “canned meat.” Don’t worry about determining which classes these products belong to – that’s our job – but focus on making a complete and detailed list of goods you’re currently selling, or plan on selling in the near future. You can also read our article that helps you understand how to list products and services.

  1. The business owner must also decide who will be the owner of the trademark. We discuss this at length in a separate article, but it’s best to file a trademark in the right entity name. You may already be aware of this, but: a US trademark application based on “intent to use” can only be transferred to another entity once use of the trademark begins. What does that mean?

Let’s say you rush and file your new trademark in your personal name, before incorporating. You plan to launch it in 6 months. Then in 2 months you incorporate or form an LLC and decide to put your trademark under your corporation or LLC. You open your Amazon seller account under your corporation or LLC name. Now, you are ready to sell, but you have a problem: your trademark was filed by you personally and you can only transfer the mark once you start selling products under your personal name. If your Amazon account has been opened under your LLC or company name, it may be difficult to make that first sale under your personal name, and without any sales, you cannot transfer your “intent to use” application to your LLC. You are caught in a Catch 22.

Tip: Stop and think carefully, who will be the owner of your new trademark?

Many people ask: Trademarks are expensive, shouldn’t I wait until I make money and then file an application? After all, I have common law rights.

Yes, it  is true you have common law rights even if you don’t file a trademark. So why bother? The truth is: it is much more difficult and expensive to prove common law rights if you don’t have a registered trademark. In addition, you can’t get into the Amazon Brand Registry with an unregistered trademark.

The real danger in waiting to file lies in the fact that another individual or company can easily file for a trademark that is almost identical to yours while you wait to make sales. This means that you should file a trademark as soon as you come up with a trademark, decide what products you will sell and who the owner of the trademark will be. Do not delay. Do it yourself if you know how, go to your trademark lawyer, or use an online filing service but don’t delay.

We caution against delays given the risks involved. Take the example of a real client (whose name and suggested trademark we have changed): This past May, John came to us needing our assistance with registering a trademark. He wanted to trademark GYLA PRO STORE for notepads and writing paper. He decided to wait a little until he made his first sale as it’s a little cheaper to file a trademark if it is based on actual use. We told him that waiting is dangerous and that we should file right away. A month later, John made his first sale and we filed an application based on actual use on June 10. A few months later we learnt that another company, Company A, filed for an almost identical trademark GYLO PRO for identical products on June 7.

Instead of an easy trademark registration, this will now turn into a complicated and expensive process. Our client’s mark will be refused by the Trademarks Office based on that earlier June 7 filing. Luckily, as our client’s date of first use precedes Company A’s date of first use, we will be able to oppose the registration of this other trademark.

However, oppositions are very expensive and our client does not have the funds for an opposition. What are his options?  We could write a cease and desist letter and threaten Company A with a lawsuit if Company A does not abandon the trademark and re-brand. We could also threaten to oppose. What if the other side ignores us? Our client could still use the trademark but won’t be able to register it. Therefore, he will not be able to get into the Amazon Brand Registry. In practical terms, this means that he will have to re-brand, as he needs a registered trademark to get into the Amazon Brand Registry. Had he filed in May when we recommended, this problem would not have come up.

The takeaway?  These are the steps we advise that you follow:

– Pick your trademark and make sure it is solid from a marketing perspective, that it has a good vibe, that there are no negative connotations or hidden negative meanings associated with your mark which you are not aware of. Use Google and translate your mark to make sure you are not missing some hidden meaning.

– Use namechk.com to make sure your trademark is available on social media sites and that the domain name is available.

– Decide on the products that you will sell or on the services that you will offer or both.

– Do a proper trademark search to make sure the name can be used and can be trademarked in the country where you are interested in operating. It’s a good idea to do a broader search (in other words, search for your mark in more than one country) in case you decide to expand your business later. We offer free trademark searches but of course there are other companies who offer these services, and, while it’s not recommended, you can also conduct a search yourself.

– Determine who the applicant will be: an individual or a business entity?

– Decide where you are going to file. Will you only file in the US? Or perhaps you expect to do business in Australia?

– Decide on your trademark budget. This is very important as the cost of trademarking can vary (from $500 to $5000).

– Decide how you are going to file: by yourself, using an online filing service, or through an agency.

– File your trademark.

Don’t wait to make the first sale, don’t wait until your business takes off. It is much cheaper to file early than to file later and then chase those who beat you to the Trademarks Office by a few days. 

Remember that trademarking is a long process so the sooner you file, the sooner you will proceed to registration.

Another consideration: for service businesses, coaches, consultants, advisors, and accountants, your trademark is your business, so waiting to file is not a good idea. Your brand identity is your most important asset, so protecting this is crucial. If your brand is stolen by somebody else because you chose to wait to file your trademark, it can turn into a big headache.

Register your trademark sooner rather than later if you’re serious about your business. Consider trademarking your brand as a valuable investment that will pay off as your business grows.