Create, Consult, Control
News & commentary on intellectual property issues.
Dec282011 | Steve O'Donnell
Does a twitter follow have a value? What does this mean for RT contests?
If you’re on twitter, or if you’re an employment lawyer, you’ve probably seen the story about the case to decide ownership of a twitter account. Interesting story, and one that should be kept in mind when you mix business with twitter.The story is all over the internet, so I’m not going to hash the whole thing out here again. If you’ve been able to avoid it so far, you might want to take a look at this NYT article.
In a nutshell, Noah Kravitz worked for Phonedog and tweeted as Phonedog_Noah. When he left, he kept tweeting as NoahKravitz (you can change your twitter name without losing followers). Phonedog sued for possession of the account stating that it is a “customer list” and asking for damages of $2.50 per month, per follower (17k followers). There are a number of “facts“ I’m leaving out, because I’m sure they’re up for debate (i.e., who said what, why the account was opened, etc).
The usual headline to this story is that the case will decide if you or your employer owns your social media accounts. I don’t think it will do that. I doubt many people would think that they own an account if it was opened by their employer for the purpose of communicating with customers (which is, I hope, explicitly drafted into an employment contract, if it’s not, it should be or the business is just asking for trouble). On the other hand, I don’t think there is much of a question that if I work for a company and also run a personal twitter account, that the account isn’t the property of my employer. In those situations, there really isn’t a question to be resolved. Here, the question is closer to “whether a list of followers of an account that was associated with a business constitutes a customer list?” A contract could have settled this before it ever became an issue. Even if there was no traditional employment contract in place, the foresight to send an email and create a “paper” trail about ownership could have kept this from becoming an issue.
Enough about that, lets just say the main idea is that is should be clear from the start who owns what. What’s more interesting to me is that thought that there is some monetary value to a twitter user.
One of the things I like to roll around my head from time to time is the legality of twitter or Facebook contests. You know the ones, “everyone that Likes my page will be entered to win…” or “ReTweet this by Friday at Midnight for a chance to win…” I posted on it once before, you can read that if you’re bored.
In brief, there are contests, sweepstakes, and lotteries. Contests require skill, sweepstakes are open to everyone, and lotteries require something like a lottery ticket to enter (the legal term is consideration--some tit for tat). Those cereal box promotions, or McDonald’s Monopoly game look like lotteries because you’re supposed to buy something to get a game piece, but read the rules and you can also send away for a free entry--which is how they avoid being classified as a lottery.
Contests and sweepstakes are usually legal (there might always be some state-specific issue, so check that out before you get yourself in trouble), but lotteries are usually pretty tightly controlled by the state. I’ll let you decide for yourself if that’s so the government can run it’s own lottery as a monopoly or if it’s to protect the public from unscrupulous lotteries (the old, illegal, numbers games).
Usually people get confused about the terms, so just because someone calls something a contest, don’t assume they mean it’s a contest.
The interesting thing I see coming from the twitter-ownership case is a possible finding that twitter followers have some real value. That is a core presumption to Klout.com (and a few other “social influence” marketers) where you can get stuff based, in part, on your number of twitter followers.
If, the court states that there is some value to twitter followers, then the question of whether a “ReTweet to enter” promotion is a lottery or a sweepstakes suddenly becomes more of an issue. If there is value to a new followers, a like, a retweet, or any other social media metric, then is trading one for a chance to win something make that promotion a lottery or a sweepstakes? It sounds like a lottery to me, and running an illegal lottery is generally to be avoided, unless you’re in the illegal lottery business. On the other hand, there could be some value to a Like (or whatever), but not enough to transfer any benefit on the site being Liked. In other words, an individual Like or RT might be of such little value that it’s not worth the bother for a court to care about. Of course, if the court goes along with Phonedog and agrees that each follower is worth $2.50, that is probably enough consideration to turn these promotions into lotteries and possibly cause lots of problems for lots of people.
Now, of course, it’s probably going to require a bored Attorney General to look into a simple Facebook or Twitter promotion, but it could happen. There’s also the possibility that you’re violating the law of another country if someone in their borders “Likes” your page as an entry to your promotion. That could be a whole new circle of Hell. Even if you don’t have a legal issue because of your request for ReTweets being open to the world, you might incur more expense than you intended if someone half a world away wins your promotion and wants their prize mailed to them.
So, I haven’t really settled things here, like lawyers tend to do, so what is the takeaway? At the very least, I’d post rules for a promotion and limit it to people within the US. You might also want to limit it to people in your state or city--what is the point of having someone win your promotion if you’re a local business and they’re half the country away and likely to never actually purchase your services/products? Of course, the best idea is to hire an attorney to look at the issues and give you advice on how to structure things to minimize the chance of running into troubles.
Feb282011 | Steve O'Donnell
Zebra trademark backlash
About a week ago, The Lones Group in Washington state brought an action for trademark/tradedress infringement against Dan Rothamel and Strong Team Realtors (in Virginia) over the defendants’ use of some allegedly “confusingly similar” elements. As often happens, this didn’t sit well with a number of people (check out Twitter hashtag #savethezebra). Does the Lones Group have a case? If not, what could they have done differently to protect their marks? Could this have been resolved without a formal complaint and the resulting backlash?
First, I have no particular insight into the facts of this case beyond those I’m assuming to be true from the complaint. So, if you have a problem with what the Lones Group says in their complaint, don’t complain to me. Second, I’m not going to take sides; if you want to read something that cuts down the Plaintiff (Π) or the Defendant (Δ), I’m sure you can find plenty of material online. What I am going to do is point out some difficulties that Π will likely encounter in a lawsuit, offer some suggestions and what they could have done differently, and hopefully add a little something to the discussion.
Trademarks are something, a name, a symbol, a slogan, etc, that identify the source of goods or services. You can rely on the assumption that if you buy a can of Coke, that it was made by Coca-Cola. Trademarks can be a company’s most valuable asset if managed properly. Trademarks can also be separated into registered and unregistered. Registered trademarks go through an examination procedure at the trademark office, unregistered trademarks can gain “common law” rights through their use. There isn’t a particular need to register a trademark, but registration offers some huge benefits such as the right to bring an action in federal court, public notice of the mark, possibly greater damages, a presumption of ownership, and the exclusive right to use the mark nationwide in connection with the goods/services listed in the registration. If you’re using a trademark, you should contact a trademark attorney to discuss registration--there’s really no reason not to register a mark.
Π starting using the word “Zebra” and employing a zebra-theme at least as early as 2005 to identify their real estate business, but did not register the mark(s) as far as I can tell (a quick search of the trademark office records did not find it, and if there were registrations, the complaint would almost certainly have noted the registration numbers). Later, Δ started using the domain “realestatezebra.com” for a real estate blog. Had Π registered the trademark, their position to have Δ’s registration canceled or to get the domain turned over to them would have been much stronger through ICANN’s dispute system.
Π discovered that Δ was using a mark they considered their own, didn't care for it, and filed a trademark infringement lawsuit.
Since the marks were not registered, Π will have to demonstrate that their Zebra marks have acquired secondary meaning (meaning that people in the market for real estate marketing services identify “Zebra” as meaning the Lones Group, and that either their mark is known where Δ does business or that Δ is doing business where the mark is known. So, either the mark is known in VA (assuming Δ only does business in VA, for example) or, if the mark isn’t known in VA, that Δ is doing business in WA (or wherever Π is known)). It’s certainly possible, but it is an extra layer of work to do in the lawsuit which could have been avoided had Π registered the mark.
Π will also have to show that Δ is using the disputed mark in the same market. Trademarks, both registered and unregistered, can peacefully co-exist if their markets are different enough. Zebra (as used for real estate services) could, and does, happily exist along side Zebra Technologies (specialty printing company) and Zebra Tattoo and Body Piercing. It’s extremely unlikely that anyone is going to go for a tattoo and ask the artist about their bar code label printers or their real estate services.
In this case, after a minute on each party’s website, Π appears to be a marketing consultant for real estate agents, while Δ seems to primarily be a realtor, although it looks like he does do some educational work in the field. Is that the same market? I’m not sure of the answer. If it’s not the same market, is it close? If the markets have enough connection, even though they’re not exactly the same, it could be close enough to infringe. The whole thing comes down to likelihood of confusion. How likely is it that a consumer would confuse Π and Δ based on their use of “Zebra?”
Is the case a slam-dunk, no. Is it frivolous, no. If the Lones Group asked me about it, I wouldn’t have suggested ignoring it. Trademark owners have a duty to police their mark or they risk losing it. Based on what little I know about the case, it sounds perfectly reasonable to bring the action, but was that the best route to take?
There seems to have been an explosion of late of trademark owners being overly aggressive about protecting their marks, or maybe it’s just that the internet has picked up on it and these things are being publicized more. I don’t think this is a case of a trademark bully, but it still could have been handled differently.
I hate second guessing Π because I have the advantage of seeing the fallout the lawsuit has caused, but this is an era of social networking and the fallout could have been foreseen. For one thing, it’s rarely a great idea to sue a potential client, that just doesn’t sit well with other potential clients. If this same exact controversy came up a couple years ago, a few bloggers would have picked it up, but it probably wouldn’t have caused anywhere near the backlash that it has. If it came up a decade ago, it’s doubtful many outside of the parties would even have found out about it. Today though, one has to assume that any action will draw the attention of every person that might be interested in it.
If I was handling the matter for Π (and admittedly, this is with the benefit of hindsight), I would have attempted to open communication with Δ and tried to convince them to abandon “Zebra.” If that failed, since the market overlap (both geographic and by type of service) isn’t exactly in unity, I would have suggested that the matter be settled with a disclaimer on Δ’s materials that any use of “Zebra” or of “Zebra themes” does not imply a connection with Π. If that failed, I’d have to take an even closer look at market overlap before suggesting further action. Since it’s not a slam dunk case, and since the marks were never registered, I might have drafted an opinion letter discussing how Δ’s use of “Zebra” and related were not actionable trademark infringements or at least that it was questionable. Such an opinion letter could be used later to defend against a claim of trademark abandonment if an action was initiated against a more clear infringer.
Bottom line, if you have a trademark--register it to put yourself in a better position if someone starts using the same, or confusingly similar, mark; and before taking action to protect your trademark, consider social networking backlash. One thing you don’t want to do is cause damage to your brand by trying to protect it.
I’m interested in seeing some comments and questions. I hope this post is of some value, but if nothing else, you’ve learned that lawyers use Π and Δ as shorthand for Plaintiff and Defendant--that alone is worth the price of admission.
Photo by Nevit Dilmen and licensed under the GNU Free Documentation License
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