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U.S. Trademark Law & The Hashtag: #canthisviolatetrademarklaw?

In the past decade, with the advent of social media, companies have found a multitude of new avenues for reaching potential consumers. Instead of solely relying on traditional marketing avenues, companies have been able to take advantage of the connective world of social media to reach consumer consciousness at an unprecedented rate. The implementation of the “hashtag,” a metadata tag that allows social media users to group their posts with others who have used the same hashtag phrase, has greatly increased visibility among social media users. By using a particular hashtag, companies are able to connect directly to consumer posts, while also encouraging consumers to spread company branding through their own social media use. In addition, the hashtag has in some ways served as the great equalizer in online advertising. Even companies with limited capital have been able to engage in this grassroots marketing, since the cost of using a social media account and a hashtag is often completely free.

As companies increase their presence on these social media platforms and continue to engage in hashtag marketing, legitimate questions about trademark protection have arisen. Namely, individuals in the legal and business community have begun to wonder if there are potentially damaging trademark violations lurking in this newfangled hashtag regime. Many startup companies are reliant on their ability to gain traction through these highly cost-efficient marketing streams, and therefore, founders must ensure that they understand the rules governing the use of “hashtags” in the social media marketplace.

While there are a number of different angles to approach this topic, this post will focus on the legal community’s current (but ever evolving) understanding of the role trademark law plays in policing hashtag marketing in two instances: (1) the use of certain word marks (i.e. words or slogans that are used as source identifiers for a company which are protected trademarks) in a hashtag and (2) the acquisition of protection for hashtag phrases (so, a word mark that includes the actual hashtag symbol at the beginning).

 

(1) Can the use of trademarks in a “hashtag” on social media ever violate federal trademark law?

 In short, the answer appears to be (potentially) yes – in the very limited case law discussing this question, courts appear to indicate that the unauthorized use of a trademarked word or phrase can constitute trademark infringement. To briefly outline what federal trademark infringement entails, a plaintiff (the company attempting to prove that the defendant infringed on their trademark rights) must demonstrate that: (1) the mark in question merits protection under federal trademark law; and (2) that the allegedly infringing use is likely to result in consumer confusion, causing damage to the plaintiff. For example, if a relatively unknown cell phone company began placing the Apple and iPhone words and logos on their products (in other words, trying to pass their phones off as genuine Apple iPhones) this clearly has the potential to cause significant consumer confusion in the marketplace. The question with “hashtags,” therefore, is whether one company’s use of another company’s (or individual’s) trademarked word or phrase could result in a similar type of consumer confusion.

In a recent case in Massachusetts, Public Impact v. Boston Consulting Group, the court determined that the defendant’s use of the hashtag “#publicimact” (as well as the use of a twitter handle “@4PublicImpact”) was an infringement of plaintiff’s protected word mark, “Public Impact.” Specifically, the court stated that the defendant’s use of the same two words that constitute plaintiff’s mark as a source-identifier would be concerning in any context where the words are used without other distinguishing features. The logical conclusion, therefore, is that the court believes that “hashtags” are capable of being used as source identifying mechanisms in social media, and not just merely categorization tools. In other words, the court here seems to recognize the role social media advertising plays in generating revenue for companies, and the potential need for adequate trademark protection for companies in this sphere. As a result of this finding, the court actually ordered a preliminary injunction against the defendant’s continued use of both the twitter handle and infringing hashtag — a result that clearly demonstrates the impact these rulings could have on a company’s ability to continue conducting business as usual.

While no other cases answer this question quite as directly, courts have at least demonstrated an openness to evaluating claims of infringement via “hashtags” on the merits (meaning, that there is at least a colorable claim of infringement). For example, in Fraternity Collection v. Fargnoli, the Southern District of Mississippi stated a willingness to accept, at least theoretically, that “hashtagging a competitor’s name or product in social media posts could, in certain circumstances, deceive consumers.” While there is no judgment on the merits in this case, it at least further shows the general understanding that “hashtags” are capable of doing more than just acting as convenient grouping labels, but instead serve a valid role in company marketing.

Additionally, trademark holders have increasingly threatened litigation over what they perceive to be improper use of their trademarks in hashtags. For example, the U.S. Olympics Committee made various statements during the lead up to the 2016 Rio Summer Olympic games that they would vigilantly seek to prevent the use of their marks (e.g., “usolympics,” “teamusa”) from being used by non-sponsors of the U.S. Olympic team, including in hashtag format. Differentiating individual non-commercial use of these marks from the alleged infringing use, a representative from the USOC stated: ““athletes can certainly generically say, ‘Thank you for your support’ during the Games, but a company that sells a sports drink certainly can’t post something from the Games on their social media page or website. They’re doing nothing but using the Olympics to sell their drink.”

This should give young companies pause when thinking about how to interact in the social media marketplace. While this increased protection is potentially a boost for companies looking to protect fledgling brands, start-ups should also be wary of the potential for using other more prominent marks, especially when doing so could be interpreted as an attempt to palm off on the goodwill of the more established mark.

 

(2) Are “hashtags” trademarkable? Is this a desirable form of protection?

In addition to filing infringement claims for use of a mark within a hashtag, many companies, and other entities, have begun acquiring trademarks for actual hashtagged phrases (in their hashtag form) as a second way of increasing protection. For example, the USOC actually owns the mark: #rioready. Recently, National Football League super-star wide receiver Dez Bryant successfully filed the mark: #throwupthex, which had become his trademark slogan (to go along with his popular touchdown victory move where he crosses his arms in the air). Mr. Bryant noted at the time of the filing of the application his concern that companies would engage in misuse of the mark to generate marketing for their own brands.

While it is clear from these examples that hashtag phrases have been accepted as proper trademarks by the USPTO, there are a few observations that companies should keep in mind when evaluating the decision to register their hashtag marks.

First, the addition of a hashtag symbol (#) in front of an otherwise generic word or phrase does not elevate that word or phrase to a level of distinctiveness. In other words, if the mark is not protectable without the hashtag, it cannot gain protection simply from its inclusion. Second, it may not even be an expedient business decision to acquire this mark. For starters, if the company has not already obtained protection for the wordmark within the hashtag phrase itself, then there is no reason to believe that this mark would be enforceable. Further, companies should be careful to ensure that, if they do acquire a trademark in a hashtag phrase, that they are making sure to use it in a source-identifying way. It is perhaps not terribly difficult to see how (and make the argument that) another company is using an already established source-identifier to palm off the goodwill of that mark by using a hashtag containing that mark (the scenario discussed above). However, if a company obtains a trademark in a hashtag phrase, and then only uses that phrase in a hashtag context (to group their posts together) in a way that doesn’t seem to serve as a source identifier that company may have a tougher time demonstrating that the trademark in that hashtag phrase is valid. A better course of action would be to ensure that trademark protection is obtained first in the actual phrase (without the hashtag symbol).

In all, startup (and more established) companies should not rush to protectionist measures when it comes to trademarks. Much of the marketing benefit arises directly from the consumer’s ability to link directly through the use of trademarks, and owners of the contained marks should not necessarily assume that their usage by others, even other companies, is always an undesirable outcome. Further still, over-protectionist measures may generally be an objectionable decision from a business point of view. That being said, companies and their counsel should be advised to take full note of the rapidly changing landscape governing trademarks and their place in social media advertising.

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The Dangers of Copying Terms of Service and How to Avoid Them

It might be tempting to copy the Terms of Use from another website, but should you? Attribution: Cathy Olson.

It might be tempting to copy the Terms of Use from another website, but should you? Attribution: Cathy Olson.

Facebook has 1.55 billion users, and each of them has a contract with the company. At their scale, there are few documents more important than their Terms of Service (ToS). Understandably, many Internet entrepreneurs are and should be concerned about this critical part of their business, even if they don’t have the same reach as the Facebooks of the world. Unfortunately, many resort to simply reproducing an existing ToS from a comparable company, but such copying can be risky, in addition to painting companies as cheap knock-offs of their competitors.

Sometimes, another company’s ToS will be very attractive because it contains specific provisions that are relevant to your company as well. If you’ve built an application that tracks your users’ location, then it will be very tempting to copy Uber’s ToS, for example (or large parts of it). But would doing that be in the best interest of your company? Further, would it even be lawful?

Leaving You Vulnerable

The most significant downside of copying a ToS is that it will not contain the provisions tailored to your particular business. If a user or customer were to take legal action against your company, you would be missing the language that could make all the difference in settling or winning the dispute.

Competitors may be using a surprisingly different process to provide similar services. For example, if you’re providing a service based on wireless communication protocols, your competitor might be operating with a different technology, and the provisions of their ToS will very likely reflect that. There might be clauses arising specifically from the technology used, such as the reliability of connectivity, say over the RFID protocol (radio-frequency identification), that are irrelevant to your company, which might be using the NFC protocol (near-field communication). If for whatever reason a dispute arises that implicates the reliability clause, having a custom-tailored ToS is essential.

Governing Law

A ToS can in fact be protected by copyright, and entrepreneurs and their lawyers should take heed. At least one court has found a company liable for copyright infringement when they have copied important sections of public-facing contracts used by competitors.  In AFLAC of Columbus v. Assurant, Inc. et al (2006), a federal district court in Atlanta found that the non-boilerplate sections of AFLAC’s insurance policies were protected by copyright, and that competitors in the insurance market would be liable for infringement if a court found substantial copying. Since an insurance policy is a contract like any other, the same logic would hold for a ToS.

It may come as a surprise, since any practicing lawyer knows that the building blocks of most contracts are copied from others, but contracts that are sufficiently original and creative may be entitled to copyright protection. Accordingly, a contract containing many commonly used provisions can still be protected by copyright because the particular arrangement of provisions could constitute an “original” (and thus copyrighted) compilation.

Practical Risks

The risk of being sued for copyright infringement is small. However, there is a non-legal risk of others viewing the product or service as derivative and unoriginal, making competitors look like the first-mover and innovator in the relevant market. This is especially true for more sophisticated readers of the agreement, such as strategic customers or investors, who may look at the ToS more closely. This obviously doesn’t apply to the standard boilerplate provisions that can be found in almost all contracts, such as a force majeure clause, but in the areas of the Terms that are unique to that particular business, it will look bad.

Open Source Contracts

On the other hand, some companies have generously made their ToS available for the public to use, so long as they provide attribution. Automattic, the company behind the popular WordPress.com, recently open sourced their ToS (in the spirit of their own open source software). They’ve made it available under a Creative Commons Sharealike license, which enables others to copy and repurpose the document so long as internal references are relabeled and attribution is given to WordPress.com.

In conclusion, if you’re tempted to copy another company’s ToS, you may be infringing on their copyright if you take provisions that are unique or distinct from industry custom. If instead you copy just boilerplate or commonly accepted industry provisions, you should be in the clear.

The question then is, if you’re a lawyer, or even an entrepreneur who’s not afraid to draft a ToS, how should you draft solid language that is not a direct rip-off of your competitor’s? See Part 2 of our ToS series to find out!

Part 2: Drafting a Unique and Effective Terms of Service

Lawyers have an ethical obligation to provide fundamentally sound legal advice to their clients. This advice often includes work product that is memorialized, and in the case of a ToS, publicly displayed. This presents an interesting issue: How can the new ToS be distinguished from the original without sacrificing the client’s objective of superior work product? The original document  might be legally sound, comprehensive, well-organized, and narrowly tailored to your market. Yet, completely plagiarizing an existing document has ethical implications, as well as the issue of outside perception mentioned above.

To that end, it’s advisable to start with a series of strong sample documents from sources like CooleyGo, UpCounsel, or Docracy. These are released into the public domain and thus present no copyright concerns.

One process used at our Clinic allows practitioners to create effective ToS documents without plagiarizing. You begin by finding several samples. We found it helpful to begin with documents from the most successful technology companies. By comparing the ToS’s of Apple, Facebook, Google, Uber, and others, we were able to more readily identify boilerplate language common to software and Internet companies. We were able to identify how these companies dealt with specific risks, like server failure, data breach, and personal injury.

Armed with the knowledge of how the biggest and best tech companies minimize risk, we then looked for smaller companies that were in the same field as our clients and had more relevant language to reference. We identified the sections of these ToS’s that were not boilerplate and we stripped them of their legalese. Once we had a version in entirely laymen’s terms, we then translated back to legalese using our own verbiage and adding our own relevant language. This created an authentic ToS that was tailored perfectly to our client’s business.

Other Information

For other information on this topic:

http://newsroom.fb.com/company-info/

http://pub.bna.com/ptcj/1051462Jan11.pdf

https://www.quora.com/Does-copyright-apply-to-contracts

http://scholarship.law.umassd.edu/cgi/viewcontent.cgi?article=1083&context=fac_pubs

http://www.law360.com/articles/5247/insurance-policies-can-be-copyrighted-judge-rules

http://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/model_rules_of_professional_conduct_preamble_scope.html

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Tips For Using Social Media To Build Your Personal Brand

You can use social media to help establish the characteristics that make your offering unique.

You can use social media to help establish the characteristics that make your offering unique.

These days everyone is trying to develop their personal brand.  That is to say, everyone is looking for a way to help them stand out in their profession.  Your personal brand explains the characteristics that make your offering unique- your product, reliability, attitude, promise, customer service, etc. Personal branding is especially important for entrepreneurs and those that work with them.  For entrepreneurs, personal branding is important because at the early stages, people are investing in the people associated with the start-up as much as they are investing in the product or idea.   Personal branding is also important for those who work with entrepreneurs (e.g., startup attorneys, venture capitalists, etc.), as their future business is often driven by their reputation.  For examples of startup companies and the people who work with them that are very active on the social media website TWITTER, see venture capitalist Jason Mendelson (@jasonmendelson), Wilson Sonsini Goodrich & Rosati, (@wilsonsonsini ), a law firm serving entrepreneurs and venture capitalists, or the payment startup Square, Inc. (@square).

Social media websites, such as TWITTER, LINKEDIN, MYSPACE, and FACEBOOK, can be powerful tools in helping you to establish and promote your personal brand.  However, these same tools can also tarnish your brand if used incorrectly.  Here are some helpful tips on how to successfully and responsibly use social media to develop your personal brand.

1. Select your brand

What do you want to be known for?  The goal of personal branding is to establish a positive correlation between you and your services in the mind of others.  As this is highly valuable retail space, you may need to start with a narrow focus.  Are you promoting yourself as a news source, or do you want to be known for your expertise in a particular area?  Decide what is most important to you, and focus your efforts on building up that relationship with consumers first.  Once you have chosen a brand be consistent. Brands only have power because the consumers rely upon them as indicators of predictable, reliable, or valuable products.  Changing your brand will undermine initial efforts in building a brand.

2.  Envision your audience

Next you should consider who you want for your audience.  Are you looking to interact with the general public?  If so, you will want to focus your efforts on social media sites which can be accessed by the general public, such as TWITTER or publicly accessible blogs.  If however, you are looking to target a more focused group of people, for example colleagues in your profession, you may want to focus your efforts on websites such as LINKEDIN, a social networking website for professionals.  Clearly identifying your target audience and choosing the appropriate medium to send your message will allow you to specifically reach those individuals you would like to know your brand.  Also, it is important to realize that it is now possible to link the TWITTER, FACEBOOK, and LINKEDIN feeds together so that a message sent out on one channel is automatically sent to all feeds.  With this convenience users should be even more aware of their respective audiences on each social media site, so that, for example, a personal tweet doesn’t get sent to business contacts on LINKEDIN.

3.  Know what you are getting yourself into and know any limitations you might encounter

The next thing to do before embarking on your social media quest to build up your personal brand is to check with your employer regarding their social media policy.  Does your company have regulations prohibiting employees’ use of social media on certain subjects, or do they support your personal branding efforts?   Are there any regulations about using social media sites during work hours?  Be aware of and follow any limitations these regulations may have on your postings, as misuse of social media can lead to trouble in the employment law context (for examples of recent cases see The Social Media Employment Law Blog).  Early-stage startups should consider formulating a strategy and philosophy concerning social media that all founders and employees adopt.

Assuming your company permits your use of social media to promote your brand, you should familiarize yourself with the Terms of Use regulations imposed by social media sites.  While you may retain intellectual property rights pertaining to anything you post on some sites, this is not necessarily the case for all websites. Know what intellectual property rights you may be giving up before interacting with social media sites.

4.  Gain followers

So you’ve chosen a brand, identified your audience and cleared it with your employer.- so how do you gain followers?  This may be more difficult than you initially think because social media is saturated with information. How do you stand out?  One way is to provide something of value to your readers.  For example, you could serve as a filter for your readers. If you are able to filter out the valuable information from extraneous information- the wheat from the chaff- you will gain people’s attention.

There are also proactive ways to seek out an audience. One tried and true way of gaining the attention of others online is to give attention and assistance to them first.   People are more likely to be interested in what you have to say, or to follow your brand if you express an interest in them first.  There are several ways to do this.  For example, LINKEDIN has an online tool that allows you to endorse the skills of others. Most blogs allow you to “tweet” or “like” their page, thus drawing attention to the posting.  Alternatively, you could post substantive and meaningful comments to others’ blog posts as a way of establishing credibility for your personal brand.  Engaging online in support of others’ work will inevitably draw their attention to you and your brand.

5.  Manage the brand

The most important, fundamental thing to do over time is to ensure that the experience your audiences gets from you is consistent with the brand. This is called managing the brand. Given that social media is dynamic and constantly changing, energy you put into establishing your brand can be quickly wiped away if you fail to maintain the quality of your brand.  Good practices involved in managing your brand include routinely posting reliable information, monitoring the quality of your service, and cleaning up old posts or information that remains online.