Every Business Needs a Trademark

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Gershon Morgulis: Alright.

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Gershon Morgulis: Welcome, everyone. My name is Gershon Margolis. I am the founder of Imperial Advisory. We are a fractional CFO and consulting firm. We have a whole team of CFOs.

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Gershon Morgulis: and other senior financial exec… executives, and we go into businesses, and we work for CEOs and CFOs.

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Gershon Morgulis: When there is a CFO, We…

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Gershon Morgulis: We’re not looking to replace them, we’re actually helping them, usually with projects, things that come up that they don’t have the bandwidth, or missing

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Gershon Morgulis: Someone on their team, some kind of skill.

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Gershon Morgulis: Or just don’t have enough people. And then with, smaller companies, we function as the CFO, and we work for the CEO, and

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Gershon Morgulis: Help with… Strategy.

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Gershon Morgulis: Planning… Managing… Financial resources, internal and external, managing relationships.

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Gershon Morgulis: budget and forecasting, Acquisitions, all sorts of fun stuff.

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Gershon Morgulis: One of the things that we…

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Gershon Morgulis: get involved in is risk mitigation, because you can make lots of money, but you don’t necessarily

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Gershon Morgulis: Keep your money if you take on major risks, and so…

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Gershon Morgulis: Traditionally, part of the role of a CFO is managing

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Gershon Morgulis: To some degree, in some cases more than others, but being involved in and managing the assets of the company, not just

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Gershon Morgulis: assets on the balance sheet, but the real assets. Whether that’s real estate, intellectual property, Or… other…

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Gershon Morgulis: other types of assets, and making sure that the company’s assets stay safe. So, that’s kind of the segue to intellectual property.

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Gershon Morgulis: it’s something that’s very important, it’s not something that we necessarily directly do, but it’s something that, as a CFO, we would

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Gershon Morgulis: We would be responsible for at least bringing up, and, you know, again, every client’s different, but it’s certainly something that we should all be

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Gershon Morgulis: keeping our eyes on, and something that we want to make sure our clients, our network, is aware of. So, it is…

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Gershon Morgulis: My pleasure to welcome Mark Kofsky to our webinar series.

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Gershon Morgulis: Mark is a colleague of Dean. In a moment, I’ll welcome people from our team, but Mark is a colleague, has been a colleague of Dean from our team for many years, and

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Gershon Morgulis: We’re looking forward to learning a lot from him today.

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Gershon Morgulis: Before we get started, I want to thank

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Gershon Morgulis: our team. We’ll start with Tony for, for putting…

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Gershon Morgulis: this webinar together, working on the logistics and making sure we’re up and running. Welcome to anyone watching on the LinkedIn Live as well.

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Gershon Morgulis: And, then I’m going to also welcome Dean, who I mentioned, and Stephanie, and whoever else from our team that’s here that I can’t see their face. Welcome to you all, and welcome to

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Gershon Morgulis: Any guests we have listening now, or who end up listening on YouTube or on Zoom, thank you all for joining us.

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Gershon Morgulis: And without further ado… Take it away, Mark.

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Mark Koffsky: Thank you, Gershon. Thank you, Dean, and the team, Tony and everyone else. A pleasure to be here. Again, my name is Mark Hofsky. I’m an intellectual property attorney for 30 years now. Hard to believe. Graduated Columbia Law School in 1995, so,

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Mark Koffsky: 30 years of experience in various aspects of intellectual property, and I’m here today to talk about every business needs a trademark, which is really true. Maybe I should trademark this phrase, but we’ll talk about that.

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Mark Koffsky: First, I’m an attorney, so there’s a disclaimer. Always a disclaimer.

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Mark Koffsky: We’re not… I’m not giving legal advice.

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Mark Koffsky: you reading these slides, attending this webinar, viewing the recording does not make you my client, and does not make me your lawyer. It’s an educational program only. If you want legal advice, consult competent legal counsel who can give you the proper legal advice for your own situation.

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Mark Koffsky: My opinions are my own, they are not of my firm, nor of any of my clients. So with that said, let’s jump right in.

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Mark Koffsky: As Garrison mentioned, intellectual property, or, I believe, as accountants call it, intangibles.

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Mark Koffsky: is an important asset of any business. Why do we need intellectual property? What’s the point of it all? Well, let’s take a case study. McDonald’s spends lots of money deciding where to put a new store, and I’m sure they do. Traffic studies, demographics, competition analysis.

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Mark Koffsky: They do all the things, and they decide right there on 30th and Vine, we’re gonna put a new store. And they go ahead and they do that. And the next day, Burger King seeing that, they build a store right next door.

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Mark Koffsky: That’s the great American way. Take somebody else’s idea and steal it. And it’s perfectly legal.

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Mark Koffsky: Nothing can be done about it. Because that kind of action, that kind of public activity of putting a sign on a McDonald’s store as it’s being built, or after it’s built, is not protectable under any of the buckets of intellectual property that are available to

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Mark Koffsky: to U.S. commerce. IP in the U.S. includes trademarks, copyrights, patents, and trade secrets. Each of them have pluses and minuses, each of them have different expenses, different bundles of legal rights. They interface with each other in many ways.

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Mark Koffsky: Obviously, today here, we’re here to talk about trademarks, primarily, which is the branding side of intellectual property, but that’s why we need IP, otherwise

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Mark Koffsky: everybody could steal ideas, and, you know, we wouldn’t have a country. In fact, intellectual property was so important that it’s actually included in the Constitution itself, the right for Congress to regulate

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Mark Koffsky: the discoveries and author… and writings of authors in Adventures. It’s right there, Article 1, Clause 8, Section 8. So, so it’s… it’s… the founders recognized that intellectual property was an important enough

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Mark Koffsky: aspect that it had to be federal, right? Had to be across all states or colonies at the time, and then it had to be consistent.

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Mark Koffsky: So there’s your history lesson.

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Mark Koffsky: What is a trademark?

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Mark Koffsky: Trademark can be any word, phrase, symbol, design, or combination of those things that identify as the source of goods and services.

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Mark Koffsky: A trademark owner doesn’t have… this is a myth, a trademark owner doesn’t have the rights to the word or phrase in general, but only in how the word or phrase is used with specific goods or services.

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Mark Koffsky: So, you know, you’re not gonna own the name Disney, but you own the name Disney for, you know, the company Disney and all the businesses that it’s in.

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Mark Koffsky: Generally, the legal name, and this is important in terms of you may have many, many companies, actually, the vast majority have a legal name. You know, it might be, Apple Inc, for example, but Apple is the trademark, right? Because they don’t… they don’t brand themselves as Apple Incorporated.

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Mark Koffsky: They had branded themselves as Apple and with an Apple logo. So the trademark… I’m sorry, yes?

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Gershon Morgulis: Can you trademark a word like Apple?

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Gershon Morgulis: Or only if it’s with a logo or something.

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Mark Koffsky: So, meaning now, or in, like, if Apple didn’t exist, or if it did exist?

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Gershon Morgulis: Can Apple trademark the word Apple? Like, am I in violation of their trademark when I talk about it, and Apple?

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Mark Koffsky: No, you’re not, because you’re buying an Apple from a store, right? You’re not buying an Apple… you could not very likely sell a computer or anything related to electronics with an Apple name, because

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Mark Koffsky: dominates that space, and we’ll talk about that a little bit later in terms of what rights you get when you register a trademark. And famous marks, like Apple, get more rights than non… non-famous marks.

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Mark Koffsky: But you can definitely still buy apples in the store and talk about buying apples in the store. So that’s really the distinction there, right? In terms of.

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Gershon Morgulis: Got it.

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Mark Koffsky: of what the rights are. And, to circle back here in terms of the legal name, sometimes, like here, the Coca-Cola Company, that’s the actual official name of the company, it’s on the 10K,

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Mark Koffsky: They use that as a trademark too, but not always, and often not always, right? Usually the ink, or the company, or the… it is not part of a trademark, so again, it’s the branding. It’s how the goods and services are presented to the public. That’s what matters in trademark law.

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Mark Koffsky: Okay.

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Mark Koffsky: Lots of different kinds of trademarks. We have our… we have a number of them, word marks, like Home Depot. You’ll see, by the way, in trademark nomenclature, it’s just the way we talk as trademark attorneys, trademarks are usually all caps.

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Mark Koffsky: To distinguish them from other uses, and it looks cool. So that’s, that’s the way it’s usually done. So the Home Depot is a wordmark,

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Mark Koffsky: Home Depot has a logo, right, with the orange and the white. And then we have some of the, more, exotic trademarks, colors, under certain circumstances, colors can be trademarked for good, certain goods and services. So Tiffany’s has a trademark on Robin’s Egg Blue for its packaging for jewelry and other things.

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Mark Koffsky: And there’s a little picture of the Tiffany Blue. I didn’t put this one in, but there are sounds as well, you know, like, here’s one everybody knows. That’s the NBC sound logo, as it were. That’s trademarked.

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Mark Koffsky: For broadcast television.

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Mark Koffsky: And then my favorite is Scents. Yes, you can get a trademark for a smell.

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Mark Koffsky: And Hasbro was successful in getting that a few years ago. And they described the cell as a unique scent formed through the combination of a sweet, slightly musky, vanilla-like fragrance with slight overtones of cherry and the natural smell of a salted, wheat-based dough.

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Mark Koffsky: And that’s how they described the scent. Somebody got paid to do that, and and there we are. So,

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Mark Koffsky: All the sentences, can be used to establish trademark rights.

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Mark Koffsky: So that’s kind of fun.

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Mark Koffsky: But obviously, the vast, vast, vast majority are word marks and logos.

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Mark Koffsky: Okay, to understand trademarks from a… as a business asset, we have to understand the trademark strength continuum, as it were.

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Mark Koffsky: And the main principle is for a mark to be registered and enforceable, it has to be distinctive.

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Mark Koffsky: And that’s a legal term, and basically the law has divided the world of marks into four categories, each with… starting with the weakest to the most… to the strongest. The weakest are generic marks. They are never distinctive, and are never protectable. So those are straight.

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Mark Koffsky: straight descriptions of what you’re doing without any… any other, twist.

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Mark Koffsky: My example, which happened to me, one of my clients, the PDF compressor for software that compresses PDFs. That was rejected as generic. You just can’t monopolize the market of saying PDF compressor when your software does PDF compression. That’s not allowed, and it’s not allowed no matter what.

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Mark Koffsky: The next band of protection is a descriptive mark, and that is protectable if it has acquired distinctiveness, otherwise called a secondary meaning. Example of that is Bank of America. So…

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Mark Koffsky: because Bank of America spent a lot of money promoting itself as a bank that does business, you know, all over the country, certainly, but it is a kind of a descriptive market, it’s a bank in America, but because they’ve done the work in advertising and brand management to

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Mark Koffsky: put in people’s minds that the words Bank of America don’t mean a bank in America, it means THE Bank of America, right, that we all… that we all make bank at, then they will obtain protection. But they have to do the work, right, to establish, market penetration.

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Gershon Morgulis: Question.

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Mark Koffsky: Jack? Yes.

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Gershon Morgulis: So, if Bank of America was starting out, they would not be able to do that. It’s only because they’ve been working on this for 100 years that they now.

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Mark Koffsky: That’s correct, that’s correct.

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Gershon Morgulis: Gabbit.

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Mark Koffsky: That’s correct. I would not advise anybody today, if Bank of America didn’t exist, I would not advise anybody to brand their new bank, Bank of America. That’s… it’s not going to fly. But because they’re, you know, they have a history, they’re able to protect the trademark.

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Mark Koffsky: But if it was just bank, right, it would be generic, and then they couldn’t protect it no matter how much money they spent. That’s kind of the difference between the first law and generic marks, never protectable, and descriptive marks, protectable with work, with brand work.

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Mark Koffsky: The next two are better or easier legally, in that they don’t require… usually don’t require to establish

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Mark Koffsky: recognition in the marketplace before you get your trademark rights. The suggestive marks, they have a suggestion of what it’s about, but not a full description, so Netflix is a good suggestive mark.

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Mark Koffsky: you know, you’re watching clicks over the net. Interestingly, and this is, by the way, this is, again, this is all very broad brush

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Mark Koffsky: Descriptions of what’s going on, and this is not only a continuum of trademark strength, you have to also understand that it’s a continuum over time.

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Mark Koffsky: These things change over time.

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Mark Koffsky: So, Netflix, when it started, was shipping DVDs through the mail.

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Mark Koffsky: It wasn’t, you know, so there was no net, right? It was the mail. It was, like, mail flicks. So it actually… Netflix, when it started, probably was an arbitrary mark, the next and last category, and it just kind of moved into the suggested mark, because their business changed.

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Mark Koffsky: And it is possible for names to move all the way into the generic mark, where they lose protection, forever. Kleenex, Cellophane, Escalator, those are all marks that were trademarks at one time, but became so descriptive of what the product was that ultimately the trademark was canceled.

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Mark Koffsky: canceled their trademark. So it’s, brand management is an ongoing, task. So, and so, you know, things change, and that’s kind of what makes Trademark law kind of fun, because you still always have to be in touch with where the culture is in terms of branding.

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Mark Koffsky: And as I mentioned before, the best kind, or I’m about to get to the arbitrary mark, that’s the strongest kind of mark, where the name has nothing to do with the services that it provides. Amazon, the web, you know, the everything store at this point started, of course, with books. Google, which…

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Mark Koffsky: before, you know, I don’t remember, 20 years ago was, and still is, a number, you know, one with 100 zeros, although it’s spelled differently than Google spells it. Those are the best of the best, the strongest kind of marks, because they are totally arbitrary, have nothing to do with the service that you provide, and therefore, the rights you build in are really, you know, to the name itself.

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Mark Koffsky: So that’s kind of the… that’s the continuum of trademark strength.

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Mark Koffsky: Okay.

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Mark Koffsky: Filing for trademark registration. So, first thing to understand is that there is never an obligation to file to use a trademark.

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Mark Koffsky: It’s not a license from the government to… or permission to use a branding strategy. It’s not like, for example, drugs, right? If you want to sell… legally sell a drug in the United States, you can’t do that until the FDA says okay, right? So,

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Mark Koffsky: But the trademarks are not like that. Trademarks are, you do your branding, you do whatever you want to do, and then you go and ask for enhanced protection from the U.S. Trademark Office in almost all cases, because it provides

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Mark Koffsky: You know, 50-state protection, it provides a federal right to sue, it provides a lot of benefits for a relatively low legal spend, to… to… to trademark, to register your important trademarks on your brands.

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Mark Koffsky: So if you want to…

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Mark Koffsky: prepare an application, you’ll meet with an attorney, and the attorney will identify the owner of the trademark. Now, in small businesses, this is usually pretty easy. It’s, you know, the LLC or the corporation that has the business, and in more complex structures, identifying the owner is more complex. IP sometimes is held offshore.

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Mark Koffsky: Or there could be an operating entity and a marketing entity, or whatever, but, you know, the attorney needs to understand the business and where the IP is going to be housed, and which box in the corporate structure.

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Mark Koffsky: And then you define the mark, you know, in terms of what it is, a name, a logo, both.

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Mark Koffsky: Usually, if there’s a logo involved, I will advise to do the name and the logo, meaning if there’s a logo with text in it, because that provides the broadest protection. And if their budgets are tight, then I would… and there’s a name and a logo.

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Mark Koffsky: assuming the logo has words, I would just file from the name, because a name… a name, like I mentioned, Home Depot covers

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Mark Koffsky: Let me go back

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Mark Koffsky: like, for example, we talked about a Home Depot. So the wordmark Home Depot, if you get that, that covers all fonts, all colors, all sizes, any kind of text. Whereas the logo, that orange and white, will really only protect the orange and white

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Mark Koffsky: directly, we’ll get to… you’ll get a zone of protection beyond that, but… but it’s a weaker form of protection. So, best case, you do both. If budgets are tight, you just do the wordmark and do the logo mark later.

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Mark Koffsky: And then, the last part is defining the goods and services of the registration. So, I don’t know how it happened, but

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Mark Koffsky: at some point, some time in the past, the world got together and did a trademark treaty, I think it was in France, and they divided the world of commerce into 45 classes of goods and services.

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Mark Koffsky: And this is updated every decade or so to keep up with… with ongoing, you know, AI wasn’t part of the, you know, I’m sure the 1970s list of goods and services, right? But now it will be. And…

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Mark Koffsky: So, commerce is divided into 45 categories. The categories are…

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Mark Koffsky: I would say arbitrary in the sense that

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Mark Koffsky: you know, for example, because I know some of them, I do them all the time, Class 9 is electronics, and I mean all of it, from

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Mark Koffsky: integrated circuits, to computers, to robots, to, you know, to GPS, to laptops, to anything you can think of in the electronic space, and also sunglasses, for some reason. I don’t know why sunglasses are in class 9, but they are. Whereas other classes are very narrow. Like, one is there’s a class for tobacco products, there’s a class for beer.

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Mark Koffsky: food is literally a mess. There’s, like, 4 classes that could cover food, so…

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Mark Koffsky: So, the point is, and the fees are tied to the class, that’s how much you pay in pilot fees.

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Mark Koffsky: But the point is not to get tied up in your thinking as a business person on, oh, we’re in Class 9, they’re in Class 9, they infringe our trademark. That’s not necessarily true.

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Mark Koffsky: Right? You know, you… they could be in sunglasses, class 9, and you’re in computers, those are different markets, there’s no infringement. And the reverse is true, right? We’re in,

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Mark Koffsky: were in metal goods, that’s Class 7, I think, and they’re in non-metal goods, that’s Class 6, but it’s the same kind of good. You can still infringe, right? It doesn’t… so the classes are good for classification, but they’re not the end-all, be-all of trademark rights. They’re just a way for the governments to figure out how to charge people fees.

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Mark Koffsky: Okay, so then we file a trademark application, and, I will say about costs, I mean, in terms of intellectual property, if anybody’s involved in patents, trademarks are far, far cheaper than patents. I mean, you know, a total trademark spend

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Mark Koffsky: Typically, with legal fees and official U.S. fees, all-in ranges $3,000 to $5,000 over a period of maybe a year and a half to two years. So, as legal expenses go, it’s not that much money.

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Mark Koffsky: And the benefits are, I think, you know, well, well worth it in many, many cases. And, in fact, my business tip, right, my tip is that, or for me, I don’t know if it affects anybody else, is when I started my firm 12 years ago, after I left,

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Mark Koffsky: Standard Microsystems as an in-house counsel, I had really, you know, I had no client base, and I just sort of stepped out into the… into midair and hoped for the best.

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Mark Koffsky: And I quickly found out every business needs a trademark, right? Every, you know, and this is a small amount of work you can get from a lot of different clients, establish relationships, and become, you know, get your name out there, and whereas patents are expensive, and not everybody needs patents, not everyone is in technology that needs to be patented, but everybody needs a trademark.

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Mark Koffsky: And it’s relatively inexpensive, and it gives great benefits, so…

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Mark Koffsky: I, you know, put on my trademark hat, too, and that has… that has worked out. Alright, back.

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Dean Zambelli: Sorry, quick question. I think in addition to the, more cost-effectiveness, the ability to,

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Dean Zambelli: obtain a patent is a much bigger hurdle, right? Than trademark, so I think that’s pretty critical, too. Right.

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Mark Koffsky: Right.

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Dean Zambelli: You have to prove, right?

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Mark Koffsky: Right, most trademark applications, you know, with 75… I mean, I’ve done a bunch over, now, 15 years almost, you know, 75% to 80% are successful.

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Mark Koffsky: So, whereas patents, it’s much, much, you know, it’s probably 45 to 50%, and much more expensive.

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Mark Koffsky: So, true.

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Mark Koffsky: So yes, they’re absolutely right about that.

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Mark Koffsky: So we file the trademark application. After about 9 months or so, the trademark examiner will pick it up.

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Mark Koffsky: And review it, and the primary check that they do is they will search the trademark register

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Mark Koffsky: prior to your filing date, and say, is there anything in there that’s active that will cause a likelihood of confusion between what you propose to register and what is already registered? So that’s kind of the key likelihood of confusion. Not actual confusion.

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Mark Koffsky: But likelihood of confusion. We’ll get in more into that a little bit later, about what kind of rights that gets you. So, that’s, again, where we go to the fact that, you know, again, you can be in the same class as a similar mark, and there’d be no likelihood of confusion, or you can be in a different class.

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Mark Koffsky: as a similar mark, and there could be confusion. So, this is really the key test, not just the strict, classification of the trademark.

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Mark Koffsky: If there is an issue, the examiner will issue what’s called an office action. You have an opportunity to argue, to show the examiner evidence that he or she is incorrect, and they are willing to be persuaded. These are not edicts from examiners,

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Mark Koffsky: usually will work with applicants or to make suggestions about how to narrow an application to let things through if possible. It is… can be an iterative process, and

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Mark Koffsky: And in the U.S, the examiners for… on the trademark side are all attorneys themselves, which, is… usually is a good thing in terms of it’s a… it’s a level of sophistication on behalf of the examining Corps that… that can be helpful.

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Mark Koffsky: If the examiner says, looks good to me, then the application is then published. In the old days, it was actually published. Every Tuesday, the trademark office would send out a gazette of published trademarks for the week. Obviously, today it’s done online. But the publication date is, gives us… starts a 30-day clock

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Mark Koffsky: for anybody to object to the registration after publication. And this sometimes happens if the trademark examiner

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Mark Koffsky: misses things, or, you know, things that… that doesn’t really violate Fox News’ trademark, Fox News thinks, or it really does. This is their chance to make their case to the trademark office and to the owner, saying, you know, we really have a problem here. And then that either works out.

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Mark Koffsky: immediate, you know, works out, or it doesn’t, then you withdraw your application, or you come to an agreement, or, you know, a typical kind of mini-litigation, not typical, but a mini-litigation, depending on how strong each side digs in, can result, but…

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Mark Koffsky: That doesn’t happen that often, but it can happen.

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Mark Koffsky: If nothing is… if no objection is received, and then you have established you’re actually using the trademark in commerce.

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Mark Koffsky: That’s an important step, too. That can be done either when you apply for the trademark or later, meaning actually in order to actually get the registration, there has to be actual use, right? You don’t get it until you’re using it in the marketplace.

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Mark Koffsky: And once that’s demonstrated, then you get your registration. And what the point of that is, you can’t reserve trademarks and not use them. You can’t get rights

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Mark Koffsky: You can… you can… you know, you can… the law doesn’t want you to

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Mark Koffsky: you know, block a whole swath of commerce and not actually take advantage of it yourself. That’s not allowed. Not true, by the way, as much as in Europe and other places, where they don’t require a check of using a commerce before you get your trademark registration.

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Mark Koffsky: It’s a unique U.S. kind of rule.

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Mark Koffsky: And then, once you get your registration, it has to be renewed, renewals at year 5, and then every 10… at the year 10, and every 10 years thereafter, until, you don’t use it anymore. Theoretically, a trademark, protection can be perpetual.

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Mark Koffsky: Or until the sun burns out. You know, whichever comes first. So,

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Mark Koffsky: So that’s, and that’s… that’s a way for… I mean, it’s the cynical and reason that the government continues to get fees every 10 years, but the… but the other important thing is that trademarks are no longer in use.

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Mark Koffsky: fall off that register so that when the examiners of new trademark applications go back and look, those will be gone, right? It’s not fair to… to…

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Mark Koffsky: have a new trademark application be stopped by an older registration that’s no longer being used. You’ve got to continue to use it in order to keep your rights to stop other people from using it. Otherwise, the name kind of goes back into the pool, as it were, for somebody else to pick up.

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Gershon Morgulis: You only have to continue to pay for it, you don’t have to actually… Use it.

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Mark Koffsky: As part of the payment, you have to do an affidavit of use and show a specimen or two.

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Mark Koffsky: So, you have to show, okay, yes, I’m still using it, here’s a picture of my website with the mark, or here’s a picture of the product that I’ve sold this year.

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Mark Koffsky: with the.

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Gershon Morgulis: phone.

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Mark Koffsky: So, So, you have to do both.

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Gershon Morgulis: I’ve heard people talk about investing in an IP portfolio.

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Gershon Morgulis: Like, having stuff.

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Gershon Morgulis: It sounds like storing things won’t necessarily work.

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Mark Koffsky: Yeah, for trademarks, I mean, you can do that for patents, for ideas, and there definitely aren’t a number of…

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Mark Koffsky: I’ve seen a lot of, you know, in my… what did they say? The plural of anecdotes is not data, right? But I have seen in my patent practice in the past.

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Mark Koffsky: year, two years, there’s a lot of froth in the patent market now that there didn’t used to be, which is, you know, good for me, but and yes, there are definitely hedge funds getting into the patent collection business and assertion business, but patents are assets that can be kind of bought and sold without any

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Mark Koffsky: direct tie to the market. Trademarks are not like that. Trademarks are directly tied to the goods and services of which they are sold, under which they are sold. You can’t sell trademarks without the goodwill of the goods and services.

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Mark Koffsky: underlying them. There’s no… it’s called a naked transfer of trademark, and it’s not allowed. So… So,

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Mark Koffsky: So it’s probably in the patent, and perhaps on the copyright side, you’ve heard that, but trademarkability doesn’t work.

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Mark Koffsky: Thank you. Yep, sure. Okay.

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Mark Koffsky: Special circumstances. These are some of my favorites, right? Because of the law, because of lobbyists, because of… well, it’s the same thing, really. You know, the trademark law has a number of exceptions and special

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Mark Koffsky: special rules for special kinds of trademarks that we’ll get into. One of the biggest fights over the years has been marks that are disparaging of particular people or groups.

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Mark Koffsky: An example is the former name of the Washington Commanders football team, which many consider a slur, so I’m not going to say it, but I think everybody knows what it was.

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Mark Koffsky: The Washington football team fought for years, years to keep its name. They fought in the Trademark Office a number of times. They fought in court a number of times. Various Indian tribes tried to get the name canceled.

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Mark Koffsky: they were not successful, they were not successful. Finally, I think in 2014, they were successful at one level, and then I think the Snyders just decided to sell the team, and… and…

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Mark Koffsky: I don’t know, the NFL stepped in and said, you gotta get rid of the name, and the name was gotten rid of. So,

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Mark Koffsky: But it was considered by many in the Indian Native American community to be a disparaging word, and therefore, ultimately, they had to drop it. So that’s just… and again, ongoing, right? You could have the rights today and tomorrow.

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Mark Koffsky: Culture changes, and what was acceptable today is no longer acceptable tomorrow. So, brand management… again, this is a corner case, obviously, it doesn’t happen every day, but but it’s it’s good to be reminded about, right? Again, trademarks are not static by any means. They change over time as culture changes, as the market changes.

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Mark Koffsky: And, anybody who works in this area has to be aware of that.

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Mark Koffsky: Another special area is geographical marks, and this comes from the idea that it’s not fair to corner the market over a piece of land, right? Because then you’re the only one who can sell XYZ in a particular area, or mention… that’s not… that’s not right.

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Mark Koffsky: Geographical marks have a lot of nuances, they’re complicated. It’s beyond the scope of this talk, but our favorite American royal, Meghan Markle, had the idea to

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Mark Koffsky: And she actually came out with the announcement before she found out about the trademark, right? But, yes, American Riviera Orchard was gonna be her lifestyle brand, and it turns out American Riviera is a name for Santa Barbara.

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Mark Koffsky: And a well-known name for that, and the Trademark Office said, no can do, you can’t get that name, because it’s a geographical name, and

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Mark Koffsky: And, so that was rejected, and therefore she changed her brand to As Ever. Okay, so,

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Mark Koffsky: So that’s kind of fun. Living individuals without their permission, you can’t get trademarks on their names. Go back to Meghan Markle, you cannot file a Meghan Markle trademark if you’re not Meghan Markle.

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Mark Koffsky: The law here, yes, it’s living individuals, what about deceased individuals? So there is no specific law for that, but I can tell you that, as a practical matter, any estate of a famous person

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Mark Koffsky: that collects money on royalties, or what have you, already believe they’ve trademarked everything, including the name of the deceased individual. So, if you’re not… they don’t get you on this, they’ll get you on infringement of their existing trademark, but

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Mark Koffsky: Estates, many estates, Michael Jackson and many others make many, many millions of dollars, well beyond the life of the person

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Mark Koffsky: Who lived, so, so that’s a whole business, too, so you gotta watch out for that.

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Mark Koffsky: And then in cannabis. So…

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Mark Koffsky: I know it may, despite the fact that you walk from the cities of, you know, New York City and others where, you know, the smell of pot is everywhere, and it’s sort of been allowed much more than it used to be, but cannabis, in most cases… I mean, in most cases, marijuana is still illegal under federal law, in all cases.

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Mark Koffsky: It’s a Schedule 1, like, not allowed for anything whatsoever. And therefore, the federal, the same federal government that, again, you know, has made a marijuana a Schedule 1 drug, and therefore illegal, will not give you trademarks on marijuana products.

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Mark Koffsky: And this has become a… and therefore, there’s a whole…

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Mark Koffsky: sub-industry and legal… in legal world, in the law world, of dealing with… with cannabis-based businesses, because there are not only trademark issues, there are banking issues, right? They have to… many of them operate on cash alone, because they won’t get bank accounts, et cetera, et cetera. So, there are special challenges, in…

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Mark Koffsky: in the marijuana business, that don’t occur elsewhere. And these are… there are a number of other ones, there are fun ones, like, you know, if you want to make a trademark the word champagne in your trademark, and it has to come from that region in France, then, you know, you can’t come from elsewhere, and sort of little eddies, and…

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Mark Koffsky: That are… that you’ll find in the trademark statutes, that come up from time to time in special circumstances.

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Mark Koffsky: Okay. All right, you got a trademark. Now, what are you going to do with it? Well, you might want to enforce it.

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Mark Koffsky: You have a registration. So trademarks can be enforced for that likelihood of confusion based on the registration, so…

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Mark Koffsky: You’re the Home Depot?

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Mark Koffsky: and you, you have your trademark for stores and selling home goods and that kind of thing, somebody comes out with a House Depot store. No, that’s not good. That’s likely to confuse, right? It’s not exactly the same.

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Mark Koffsky: Right? Home and house, but it’s close enough that consumers might get confused, and therefore, Home Depot will be allowed to stop House Depot. The confusion can be kind of any confusion. It can be, the way you hear it.

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Mark Koffsky: Oral, A-R-L-A-U-R-A-L, the way you speak it, oral, O-R-A-L, right? It might be the way you read it.

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Mark Koffsky: Right? The confusion can be different kinds of things. Again, how the word sounds, how the word reads, colors, all sorts of different things.

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Mark Koffsky: can be this likelihood of confusion. So the important thing to understand is, although your trademark registration is tied directly to the use of the trademark in the United States.

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Mark Koffsky: Right? That has to be tied one-to-one. The enforcement that you get is well beyond the letters on the registration, well beyond the words. The fact that you can shut down or go after people who are confusing

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Mark Koffsky: Do confusing things give you a much broader protection than the actual words on the page of the registration.

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Mark Koffsky: And it also depends on market by market.

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Mark Koffsky: In the consumer space, consumers, by and large, are unsophisticated, right? And therefore, they get confused more easily. And therefore, your zone of protection is greater.

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Mark Koffsky: Right? The law recognizes that. Whereas on the B2B side.

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Mark Koffsky: I mean, you can’t do knock-offs, but your zone of protection is less, because, I mean, Dean and I, we’re in the semiconductor business. People generally don’t buy semiconductors by mistake, right? They know if they’re gonna order a million parts, they know the company that they’re ordering from. They’re not making a mistake in buying it from

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Mark Koffsky: a perhaps similarly sounding company and getting something that they didn’t intend to pay for. So, on the business side, your zone of protection is less.

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Mark Koffsky: Than, on the consumer side, for example.

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Mark Koffsky: Okay, so that’s the… that’s the… everybody, every registrant gets that likelihood of confusion. Famous marks, which is a subset of marks, but probably the ones that we’ve heard of, because they’re famous, they get even more protection. They get protection in what’s called against dilution. When there’s no confusion.

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Mark Koffsky: Right? That you’re not in that market at all, but you’re trying to palm off, or you’re trying to dilute or tarnish

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Mark Koffsky: the entire brand within the economic sphere. So, Home Depot, I don’t think, would ever get into the tobacco business. I just don’t see that happening. I don’t think anybody would say, oh yeah, Home Depot, I buy my cigars from Home Depot.

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Mark Koffsky: Right? So… but you wouldn’t be able to do Home Depot cigars, because that dilutes the entire Home Depot brand. It’s a famous name, and anything that you,

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Mark Koffsky: that you try to do. This is probably what’s called,

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Mark Koffsky: blurring. There’s two kinds of dilution. Blurring, Home Depot cigars is blurring. You’re trying to take the good name of Home Depot and apply it to a business that they’re not in, and you’re trying to benefit from that. Other one, the more fun one, is tarnishment.

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Mark Koffsky: My favorite example is Coca-Cola toilet paper, right? Coca-Cola’s not going to be in the toilet paper business. They’re never going to do it. But if you put a Coca-Cola on toilet paper, you’re tarnishing the Coca-Cola name, right?

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Mark Koffsky: And, therefore, they have the right to stop you, even though there’s no confusion.

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Mark Koffsky: Presumably, right? Even the con… you know, they’re not going to get into that business. So, you know, and again, these are all things that are…

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Mark Koffsky: there’s no direct answers, you know, it’s part of it is evidence, what does the evidence show, what do people say? Often, if you fight about this, you’re going to have to do surveys and get a, you know, a real sense of what the market is in a formal way, if it goes to court.

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Mark Koffsky: These are obviously just the major, the major, issues that come up.

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Mark Koffsky: In most cases, litigation is resolved early in trademark law.

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Mark Koffsky: You’ll get a lawsuit. The issue will be whether the trademark owner can stop the infringement of the accused infringer, and that usually happens very quickly, early on in the case.

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Mark Koffsky: And damages… trademark damages are really not an issue in most cases. I’m not talking counterfeiting, that’s a different, right, that’s a different line of inquiry, but in terms of

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Mark Koffsky: a big trademark owner, if they bring a lawsuit, they just want you to stop, right? I mean, if they get some money out of you, that’s great, but that’s not why they’re doing it. They want infringing

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Mark Koffsky: marketing out, and they want to keep their brand pristine. And often,

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Mark Koffsky: They’ll be resolved with the cease and desist letter, and then a resolution, you know, via the attorneys, and not even have to go to litigation.

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Mark Koffsky: So…

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Mark Koffsky: Again, this is not… trademarks, or if you’re looking to get a lot of money out of your trademark portfolio, that’s usually not going to happen.

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Mark Koffsky: The exception, there are some trademarks that can be and are often licensed, right? If you were licensing a brand to other people.

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Mark Koffsky: that can produce royalties, and a significant amount of royalties in certain circumstances, but when you license, this is the last point on the slide, you have to have quality control. You have to make sure that the things that others are selling under your branding are the quality that they need to be. Otherwise.

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Mark Koffsky: the courts can say, you’re not really policing your brand, right? You’re not really doing the things necessary to make sure that your brand means what you say it means. So you’ve got to build in

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Mark Koffsky: in your licensing agreements, requirements for… usually it’s samples, I have the right to see what you’re doing, I have the right to, you know, if I’m the trademark owner, I have the right to propose certain quality control on what you’re doing, you have to do this, you have to use this factory, that factory. When you use my trademark.

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Mark Koffsky: You may have seen brand guidelines. Often, the big brands who do allow use of their marks for other things will have a, you know, 15- or 20-page document. You know, you have to use this color, not that color, this much on the bleed, this much on the, you know, this much around the trademark, that kind of thing. Yes?

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Gershon Morgulis: So I’ve seen this kind of… what you’re talking about, and I always thought it was…

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Gershon Morgulis: The brands not wanting to tarnish their good name.

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Gershon Morgulis: why… how does it tie into trademark? Like, if it’s my mark, and I don’t… I’m flexible with how you use it, why does that make it…

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Gershon Morgulis: Why does that make it a trademark problem? And…

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Gershon Morgulis: And what happens if you don’t? Like, what is the problem?

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Mark Koffsky: Right. So the problem is… the problem is, if you are not,

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Mark Koffsky: strict with the way your trademark is with Licensee A.

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Mark Koffsky: then Infringer B will come along and say, he’s not stripped of this trademark. I can do what I want with it.

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Mark Koffsky: Right? And look, look, look, here’s how the owner treats Licensee A. Licensee A can put his trademark on garbage, right? On things that don’t have quality. And therefore, it weakens the actual equity, in a sense, of your original trademark.

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Gershon Morgulis: But is that a legal issue, or is that a business issue? I get that it makes it that my brand is worthless if I put my brand on garbage. I understand that from a business, but what’s the legal problem?

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Mark Koffsky: That legal problem is you could lose, ultimately lose the rights to your trademark. I mean, it could be canceled.

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Mark Koffsky: In essence, if you… I mean, in the extreme case.

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Mark Koffsky: that you’re no longer treating it, that the owner… essentially abandonment, right? The owner’s abandoned, the rights to its… to enforce its right… to its trademarks, and therefore it should be open to all.

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Mark Koffsky: And that can be brought… you can go back to the Trademark Office and make a cancellation proceeding based on that.

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Mark Koffsky: So…

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Gershon Morgulis: What?

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Gershon Morgulis: Yeah, go ahead.

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Mark Koffsky: No, that’s… that… that’s the reason.

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Gershon Morgulis: Now, what if you’re a… you own trademark and you produce low-quality goods?

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Mark Koffsky: That’s fine.

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Gershon Morgulis: That’s fine. That’s.

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Mark Koffsky: No, then that would be okay. I mean, if you’re, you know… but, let’s say Tiffany, right? Tiffany’s brand is not low-quality goods, it’s expensive, high-quality goods, right? So…

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Gershon Morgulis: Okay.

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Mark Koffsky: You have to be careful to the extent… and this definitely happens, contract manufacturing, right? Where you’re, you know, having people manufacture goods, right, on your behalf, and white labeling, or putting on your name.

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Mark Koffsky: Either way, whether it’s your name or their name, but if it’s your name, the product has to be the quality that people would expect.

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Gershon Morgulis: That is…

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Gershon Morgulis: I didn’t mean to interrupt, but let’s say Disney. Disney, you go to Walmart, or…

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Gershon Morgulis: You go to a shoe store, you can find all sorts of Disney brand, and 99-cent stores, too. You’ll find Disney characters on all sorts of things, so they…

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Gershon Morgulis: Are they policing that?

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Mark Koffsky: Disney is… if they’re not licensed, they’re very likely policing it, yes.

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Gershon Morgulis: But are they looking at all this? Like, let’s say they have…

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Gershon Morgulis: I always thought, like, you just pay Disney a fee, but, like, does Disney have to go look at every manufacturing…

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Mark Koffsky: Yes, I mean, it’s presumably a never-ending whack-a-mole game for a company like that, but

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Mark Koffsky: It’s not… it’s not… part of the reason, you know, trademark, there’s no compulsive… what I’ll call compulsory licensing. It’s not like

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Mark Koffsky: you know, you pay Disney a fee, you can use their trademarks. They have the right to say no.

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Mark Koffsky: Right? They, they only… they have the right to… to,

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Mark Koffsky: To give their license to the trademarks to the people they want to, and say no to the people that they don’t.

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Mark Koffsky: And,

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Mark Koffsky: And they’re known as, you know, very aggressive in terms of enforcing that, both on the trademark side and the copyright side.

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Gershon Morgulis: Got it. Shout out to Tony, who used to work at Disney.

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Mark Koffsky: Oh, okay, excellent.

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Toni Clair: Yeah, I was always wondering that, actually, that was a great question.

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Mark Koffsky: Yep, they, that’s why. They, they,

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Mark Koffsky: And they make examples of people so that, you know, that’s the deterrence, right? So they…

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Mark Koffsky: They go after a small… a small fry, because hopefully they hope that 10 small fries will see that, and.

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Toni Clair: You know.

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Mark Koffsky: I’ll copy somebody else.

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Mark Koffsky: So, all right, avoiding trademark infringement. This is the flip side of enforcement, avoiding other people’s trademarks.

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Mark Koffsky: Before launching a brand, you should really put, you know, you have your marketing team, make sure an attorney’s on the team, doesn’t have to be a huge investment, but

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Mark Koffsky: generally, before there are finalists, an attorney will run, you know, you’ll come up with 2 or 3 candidates, an attorney will run some searches. I usually do a Google search and a trademark office search.

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Mark Koffsky: And then, if it’s warranted, order a professional search, which is usually, like, $1,000, comes back in 2 days. It’s done by the business that Thomson Reuters used to have, and it’s been sold off, but then you get a nice, big, thick packet of professional searchers who

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Mark Koffsky: go through the old trademark dockets and, and make sure that you’re going to be clean and not have any, not have any surprises when you launch your brand.

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Mark Koffsky: So that’s part of it. Here’s another tip, don’t get cute. Trademarks are not a area… other people’s trademarks is not an area to get cute. There are definitely legal areas where you can, you know, observe the letter of the law, not the spirit of the law, and you’ll be fine with a good attorney. This is not one of those areas. The deck is stacked.

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Mark Koffsky: in favor of big trademark owners, just the way it is. So, stay away from famous marks in all cases, right? Don’t… don’t put I in front of your electronic goods, you know, Apple’s not gonna like that. And stay away from your competitors’ marks and your business, you know, your,

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Mark Koffsky: It’s just not worth it. And don’t ignore cease and desist letters. When you get a letter, that’s a serious thing. Consult an attorney, as I… if you’re willing to…

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Mark Koffsky: essentially capitulate to the demand. Hopefully, you know, in those cases, there isn’t much investment, or it’s, you know, but if you’re willing, that usually can be worked out pretty easily.

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Mark Koffsky: If you’re, without litigation. If you’re not, then there can be a fight. But,

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Mark Koffsky: You know, don’t ignore them.

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Mark Koffsky: Related to trademarks is what I’ll call unfair trade practices.

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Mark Koffsky: sometimes… and basically, truth in advertising, there are certain laws about that, federal and state. Advertising statements should be defensible, right?

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Mark Koffsky: Meaning they’re okay if they’re true, right? We did this survey, and 9 out of the 10 people, you know, 4 out of 5 dentists like this gum for patients who chew gum, or whatever that was. I never understood who that… who was that fifth dentist, but okay.

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Mark Koffsky: I’m showing my age, right? But, you know, so… so we had, when I was in-house, we had a final check. An attorney would check collateral or other advertisements before it went out the door, just to make sure that we wouldn’t get into trouble. You generally try to avoid what we call S words, best, fastest, greatest.

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Mark Koffsky: Right? Slimits. Those are not defensible, right? There’s no… there’s no, if they’re wrong, it’s harder to defend against. You know, that’s why you’ll say, you know, J.D. Power made us the best

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Mark Koffsky: you know, the best business in Long Island, or whatever, whatever the survey. That’s good, because that’s true, right? Some other company said, you’re the best, you know, bar in Long Island.

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Mark Koffsky: And you put up the thing. So that’s okay, because that’s true. But to say, I am the best bar in Long Island, well, maybe you are, maybe you’re not, right? With that said, a certain amount of puffery

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Mark Koffsky: I love that word. Puffery is allowed in advertisements.

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Mark Koffsky: you know, this is all kind of gut, right? You do this for enough time, and you figure out what’s one’s… hopefully what’s on one side of the line, what’s on the other side. Using trademarks of others can be done. It’s not… you’re not…

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Mark Koffsky: You’re not, forbidden from saying the word Apple Computer, not at all, but you have to do it carefully. You have to give… generally give credit to the trademark owners and follow their branding guidelines.

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Mark Koffsky: State facts don’t imply endorsement, right? Just because your product works on an Apple computer doesn’t mean that Apple endorses it.

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Mark Koffsky: And, we do have a First Amendment, so parody, political speech, there’s more leeway given for using people’s marks on that. I, you know, doubt that comes up in the business context, but sometimes it might.

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Mark Koffsky: So that’s, those are principles there.

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Mark Koffsky: I will do, very quickly, my funny, my fun copyright and patent stories, and then we can take questions. So, trademarks and copyrights. Copyrights, cover the, actual text or story or music of a product, not the branding of the product.

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Mark Koffsky: And very famously, January 1 of last year, the copyright for Steamboat Willie expired, Disney’s first Mickey Mouse cartoon.

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Mark Koffsky: On the left, there’s Steamboat Willie, you can now use that. To your heart’s content, you can use that

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Mark Koffsky: in a content context, you can show it on a screen, you can derive goods, you can make things from it, you can make Steamboat Willie

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Mark Koffsky: you know, whatever, whatever you can think of, and I’m sure it’s been done, but it’s still trademarked. Mickey Mouse is still a trademark. There’s the word Wickey Mouse, and it’s, you know, it’s been a trademark since 1934, and

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Mark Koffsky: you know, as long as there are people breathing on the earth, it will continue to be a trademark. So, you can’t use Mickey Mouse as your own brand, or to imply that Disney endorses what you’re doing. So, you gotta be careful. You gotta, you know, but it’s a sort of a little fun story about how Disney

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Mark Koffsky: finally, had to, you know, that their copyrights are expiring, and they’ll continue to expire. Snow White, the original.

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Mark Koffsky: We’ll be out of copyrights, I don’t know, about 10 years, probably. I think it came out in 37, 38, so…

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Mark Koffsky: I may have the date wrong, but it, it’s, it’s coming up.

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Mark Koffsky: part of the reason why they like to redo things. They continue to keep their copyrights going in their new works, but doesn’t mean you can use it for all purposes.

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Gershon Morgulis: Can they renew that? Or it’s… Which one?

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Mark Koffsky: Copyrights? No. They last a long time. It’s usually 95 years, so it depends on… it depends on a number of things, whether it was a corporation or an individual author, but once it’s gone, it’s gone. They actually did, in the 80s… in the 90s, Disney got legislation passed that extended all copyrights for 20 years.

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Mark Koffsky: Because Steamboat Willie and other things were coming out of copyright. So, they were able to exercise their influence over Congress, and everybody got a 20-year extension.

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Mark Koffsky: culture changes, right? I don’t think they even bothered this time around, because now Disney is viewed, let’s say, primarily on the right, as a company that

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Mark Koffsky: many don’t like on the right. I don’t… they were not going to get anywhere with Congress, you know, a couple years ago to get another extension, so…

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Mark Koffsky: expired, and now they’ll, you know, they’ll have Plan B.

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Mark Koffsky: Which is to do remakes and changes and, you know, it’s a long-term strategy.

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Mark Koffsky: The final one, trademark versus patents. Patents cover ideas. Trademarks cover branding.

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Mark Koffsky: In the 1980s, when I started my law firm, I started a blog, and this was my first blog post, about this. In the 1980s, a group of writers and academics met at the La Rotisserie Franchise… I can’t read that. It’s a rotisserie restaurant in New York City. They made a fantasy baseball league called the Rotisserie League.

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Mark Koffsky: The original owners never shared in the… in the vast amount of business that fantasy sports became, and then later, gambling fantasy sports, which was an additional, right, cherry on the Sunday. The focus at the time was the name Rotisserie League.

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Mark Koffsky: And not the idea behind it. They sent many cease and desist letters to others.

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Mark Koffsky: copycats, rotisserie this, rotisserie that, but the copycats realized in the end it wasn’t the name that was valuable, it was the idea. The idea of fantasy sports. And a patent in that case would have been much more valuable to stop others from, getting into the fantasy sports business, but

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Mark Koffsky: for whatever reason, the patent wasn’t filed, they only had the trademark on the name, and the name ultimately was pretty worthless. It was the idea that mattered. So…

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Mark Koffsky: That’s the end of the presentation. I’m happy to take any questions or any comments.

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Dean Zambelli: Mark, quick question for you. One of the things we get into is M&A, obviously. Have you been involved a lot in determining valuation for trademarks, and what’s the usual methodology for that?

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Mark Koffsky: So, I’ve seen it, but I haven’t participated in it.

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Mark Koffsky: that much. I mean, usually the legal side of diligence is… is finding flaws, right? It’s going through applications and saying.

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Mark Koffsky: Were they done properly? Did they name the owner, you know, were the goods and services correct? Did they… this looks like, you know, were there any issues? Can the trademark be challenged legally? The valuation side, I haven’t personally been involved in very much.

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Mark Koffsky: And generally, the nuts and bolts are done more on the, you know, by economists or financial people.

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Dean Zambelli: You know, although…

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Mark Koffsky: The legal diligence can only drop a valuation, right? It can only say, oh, there’s a problem, right? It usually doesn’t enhance. That’s not, you know, that’s not my job. My job is just to poke holes.

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Mark Koffsky: In an M&A situation.

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Gershon Morgulis: Got it.

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Gershon Morgulis: Thank you very much, Mark. It was very interesting. My pleasure.

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Dean Zambelli: Appreciate it, Mark.

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Mark Koffsky: Okay, and there’s my contact information, so now or in the future, you know how to reach me. I’m happy to discuss, anything further.

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Gershon Morgulis: All right, and if anyone listening, either on LinkedIn, where we had some people, or on the YouTube, needs a copy of this presentation, we have that.

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Gershon Morgulis: As well, can we share that?

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Mark Koffsky: You may, I’m gonna… I’m gonna send you the PDF, so you can check it.

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Gershon Morgulis: Perfect.

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Gershon Morgulis: Thank you very much.

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Mark Koffsky: Thank you all. Thank you, Mark. Everyone have a happy Thanksgiving.

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Gershon Morgulis: Happy Thanksgiving.

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Mark Koffsky: Mark, have a great holiday. Okay. Bye-bye. Bye-bye.