Corporate Thugs Knocking at Your Door?

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I am sure that we have all been victims or observed the playground bully at work.
And some of my readers may even have pulled wings off fly’s. I’m ashamed to admit that I did. Although I am pleased to announce that my magnifying glass torturing of ants and fly’s ceased when I was about 9.

As we grow up and obtain an education we learn of new ways to torment those less powerful than ourselves. Legal ways.

It is the honest perception of the writer, “moi”, that a good deal of Intellectual Property protection is actually not just used to protect unique IP. Quite often, it is designed to take out the competition in a series of strategic moves designed to bankrupt the other side from being able to defend itself.

Bankrupt?

Yes, legal proceedings are expensive and the large companies can afford to throw several million against a small family company or group of family companies that have made their living for decades doing something that someone has now registered as their Trademark.

Unfortunately I am not aware of any legal system that will allow a litigant to enter the court system unless he is backed by large amounts of dollars.

The most oft used methodology of dismissing a claim in courts today is to use the “security for costs” argument.

This is where the well heeled side convince the judge that the litigant is unable to meet the payment of their legal costs should he lose.

And this is where the poor family company, scared of the consequences either withdraw or have to provide all their financials to the courts to convince the judge that they can afford to pay not only their own legal costs but also those of the other side.

In Australia, this is laughingly called justice and due process.

Lets not worry about ascertaining the rights of the case, lets dismiss this “vexatious” litigation as being not something the court wants to be involved with because one of the parties legal representatives may not be paid.

In other words, in Australia at least, it would appear more important for the lawyers to get paid than justice to be done.

OK back to Trademarks.

We discussed in a previous article how the popular folk dance of Central America, Lambada is now copyrighted by corporate interests and who are claiming copyright from the people of Central America who previously owned the Dance and the music, copyright and royalty free.

A recent Trademark registration case that has hit home hard in Australia is the recent Registered Trademark of UGG Australia who came registered and then kicked arse, using Australia’s signatory to the WIPO agreements against the very Aussie battlers that were making a living making and selling UGG boots.

Most UGG boot manufacturers folded when hit with the cease and desist letters written by high priced lawyers.

Fortunately for the lawyers, I don’t manufacture ugg boots. I wouldn’t have folded. But then I have prior experience.

How to kick corporate arse:

Example 1 – AT&T ata Koltai

Several years ago, I acquired a company with the domain name world.net. We thought the Domain name was indicative of our global domination ambitions via the internet.

A few months later I received a phone call from an attorney (Bernie S.) from a Chicago law firm (who it turned out had 317 partners and specialized in trademark matters – and this was 1994).

Mr. Koltai, my client has authorized me to negotiate with you over the purchase of a Domain name that you have no legal entitlement too, World dot net.

That’s interesting Mr. S…….. that you should state that I have no right to it. So, who may I ask, is your client.

I’m sorry Mr. Koltai, I am unable to disclose that at this time. But I am authorised to offer you up to 250,000 dollars for the domain name. (This was 1994, before domain names became valuable real estate.)

I replied, “Please thank your client for his very generous offer; however also tell him that I am not inclined to deal with anonymous bidders, especially when they bring both a carrot and a stick to the table. I consider that there is only one company in the world that might consider that they have a priority claim over this domain name. That company would be AT&T. If that is your client, please ask your client to contact me directly and if that isn’t your client, I thank you for your call, but regret to inform you that I am not interested in continuing this one sided negotiation.

In due course, Paul…… a VP of AT&T rang me. We made an appointment to discuss the matter.

“Mr. Koltai, you realise of course that you have no legal rights to the name.
 
If there’s one thing I hate, it’s people attempting to bluff their way into my pocket-book.
So I asked for a brief adjournment during which I rang my San Francisco Attorney, Michael Levine. “Michael,  AT&T are about to threaten me over a trademark dispute for a domain name that I acquired before they thought about doing so. How long can I stall them in the ninth district court and how much will it cost?
Michael provided me the answers to my questions and I returned to the conference.

Gentlemen, your offer is unacceptable to my board. Would you care to revise your offer.

Mr. Koltai,  you don’t seem to realise that we are AT&T. Do you understand what resources we would be prepared to expend to recover our trademarked domain name?

(In other words – We’re going to kick your arse in court and no doubt bankrupt your little Australian company.)

Dear reader, there’s nothing I hate more than the school bully telling you how your face is going to look after he’s finished with you.

So I closed my eyes for a few seconds and mentally contemplated my navel.

Gentlemen, to start with your X.25 branded product AT&TWorldnet is clearly identified
As an X.25 product and not a TCP-IP product.
Secondly I note with interest that you have already successfully registered ATTWorldnet.net and ATTWorldnet.com

Thirdly, I agree that Ausnet is a small Australian Company with limited resources. However, you are aware that I just spoke to my attorney, and he tells me that it would cost less than 1.7 million dollars to spin this out over six to seven years during which time, I would ensure that PR-Newswire received hourly updates of Goliath attempting to steamroll David.

By my calculations, that’s probably about two million words of publicity for less than a buck a word. An excellent investment indeed.
So gentlemen, see you in court.
 
Surprisingly, we never heard from Bernie, Paul or anyone at AT&T about the matter again and World.net is now a publicly traded company on the Australian Stock Exchange.

Example 2 Toy’s ‘R’ Us ata *********** ‘r’us

A friend of mine is in the business of supplying office supplies.
She had applied to IP Australia for the registration of her business name as a Trademark.

A leading toy manufacturer with nothing to do with office supplies took exception to her registration and sent letters suggesting that the high legal cost of defending a trademark dispute might be a deterrent to her continuing with her application.

I wont bore you with the long winded copies of letter backwards and forwards. I’ll cut to the chase, The letter I drafted for her to the other side.

Dear Madame/Sirs,

            Your Ref: MAG:OMG/20-5402764

We are in receipt of your letter dated 13th February, 2007.

Whilst we realise your client has a valuable trade mark closely aligned with the toys business, your letter is strong in inference that somehow, computers and computer equipment have something to do with our industry.

We sell XXXXXXXX for Printers, Facsimile machines and Photocopiers, not Computers, or Toys.

Your inference in our opinion is akin to Rolls Royce suing Good-Year for trading off by being in the same industry and both firms using the words “excellent road handling” in their advertising materials.

We note your client has registered in Classes 9, 16, 20, 35, 36, 37, 41 and 42. However our Trademark is registered in Class 2. Again, denoting a different type (class) of business.
We as office consumable suppliers, have no interest in filing any objections to any of the above filings by your client.

An internet search of “R us” on www.alltheweb.com turned up 329,000 hits with an advanced search filtering out all sites with the word “Toys”.
A search of the Australian Yellow Pages turned up 1131 hits for business with the names “R us” in the business name.



An internet search of “R us” on www.alltheweb.com turned up 329,000 hits
with an advanced search filtering out all sites with the word “Toys”.

A search of the Australian Yellow Pages
turned up 1131 hits for business with the names “R us” in the business name.

 

By adding in the double quotes; “R”us the number is
increased to 458,000,000
Advanced Search
Results for
Rus

With advanced
Filter search mode on specifically excluding all reference to Toys.

 

Word Filters –

 
 

 
 

 
 

 
 

 
 

 
 

 

Just like the trademark “Xerox” became
synonymous ( Xeroxing) with what we now call photocopying, “R US” has become
internationally known as “A Trading Business”.


Notwithstanding your clients claim on the original Trademark and due to the large volume of business that now utilises this generic terminology (some of whom have not had opposition to their trademark filings from your client); we are forced subsequently to consider the term  “R us” to be generic verbiage in common usage amongst the English speaking world.

In the spirit of attempting to match your client’s generosity in offering a commercial solution, we attach a financial summary calculated by an independent consultant as to the costs of changing our name.

We have traded the business since January 1996. In that time we have had occasion to give out our business cards, brochures, pamphlets, product stickers to well over 180,000 (estimated) Sydney residents and businesses. In January 2005, we upgraded our image by introducing a new name, XXXXXXXX R us with a different phone number and an alternative address. Even today, nearly twenty-five months later, we are still receiving calls from our old printed material. This indicates to us, that a change of name takes at least two years and costs several thousand dollars to implement.

Our consultant has also advised us on the value of the Domain name and has cited several similar Domain Name acquisitions that vary in price from a few thousand to several million.

The cost of sign-writing vehicles, reprinting flyers, brochures and office Stationary inclusive of several advertisements in local and state Newspapers would exceed $150,000.00.
Additionally the confusion that would arise should Toys R Us start Trading a business with the name XXXXXXXX R Us would cost our business potentially many hundreds of thousands dollars revenue.
Therefore, any agreement that we would consider to not use the name XXXXXXXX R Us would require a reciprocal non-use clause for a standard five year period.
We consider that the onerous nature of this self protection clause (that we would insist on) makes the name of little value to any third party in the short term.
.
Having read Professor Collins opinion on the usage of “R” us and reviewed the test responses from your clients previous solicitors (XXXXX) market research questionnaire, we are of the opinion that Toys “R” us (with a registered Trademark logo utilizing a reversed “R” ) have a valid claim to their registered Trademark with the Reversed and inverted comma surrounded Capital letter R.

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Our Trademark application on the other hand, does not have inverted commas or apostrophes denoting an abbreviation or “belonging to”; neither is our R reversed.

We note that several precedent filings, notably, Balloons R Us; Universe Bikes R Us and Events R US received no opposition from your client and were successfully journaled and Registered.
We also note some cases where your client has withdrawn opposition to the Registration e.g.:  Comics R Us and Caps R Us.
We further note the decision in Parties R Us –v- Toys R Us wherein Parties R Us with a Reversed R were approved their application by IP Australia by T. Williams in 1992 with costs awarded against your client. Opposition was again not established in the Glass R Us-v- Toys R Us case which was also approved by IP Australia by Ian Thompson in 2004.

On this basis, we can ignore Professor Collins opinion as your client is obviously not enforcing the Professors summary findings on all Trademark applications and your client has thereby created a precedent that we would rely upon and quote.

A footnote comment to Professor Collins findings.
Roget's Thesaurus was first published in 1852 and has come to be one of the most famous and widely-used reference works in the world.
Dr.  Peter Roget was a keen student of Latin as any wordsmith needed to be circa 1800.
We can then literarily examine his naming of his compilation in his favourite root Language;

THESAU in Latin means “treasure, horde, store-room, storeroom, treasury”
and RUS in Latin literally translated means “of the country, to the countryside, rural area”.  

Most Academics and learned persons would agree that Rogets’ Thesaurus is an interpretation of linguistic semantics. Surely, that interpretation also refers to the name he chose for his book.

Unless Toy’s “R” Us can demonstrate that Professor Collins  has examined Rogets’ works and found them or the resulting Global semantic development and revision that arose from the use of the Thesau”RUS” to be lacking in substance, then we consider his claim on the utilisation of RUS to ignore an important language altering precedent that predates the Toys R us claims by at least 130 years.

Therefore our name is XXXXXXXX RUS  of the Country with no relevance to Toys.

We can only surmise that if your client wishes to prosecute his objection to our Trademark filing to the fullest extent, then your client quite obviously wishes to enter into the XXXXXXXXX supply business and is possibly desirous of making us a commercially realistic offer for the purchase of our entire business.

Yours faithfully,

XXXXXXXX R Us

Enc:  Consultants Costings with Sample advertising and Domain name costs.



Addendum 1 – Consultants Costings



Breakdown of Costs associated with new name.

 

Business Name Registration

135

Trademark Filing

130

Letter to clients (3 of to each client over six months)

900

Letterbox Drops

128,000

0.14

17920

New Logo Design

15,000

New Stationary – Letterheads and Cards

350

New Magnets (inc. Artwork)

375

2 Col x 10 cm weekly
in Champion

104 wks

224.73

23371.92

2 Col x 10 cm weekly
in SMH

104 wks

1700

176800

Billboards

(5,000 per month)

6 mths

30,000

Domain Name

2250

Redesign of Web site

2500

Signwriting Vehicles

1600

Legals, Accountancy and Statutory costs

(Estimated)

10,000

Personal and staff salaries to handle name change

12,000

Estimated Total cost of Name Change

      $ 301,431.92

(The Adendums included Advertising rates a mixed bag of available similar domain names with prices.)



The Result?

Well, without admitting any of the foregoing, the corporate solicitors withdrew their clients objection to my friends Trademark registration application.

The lesson?

Think outside of the square. Research the name on the internet.
Ensure you that visit the WAYBACK machine to check on references that may have been subsequently deleted.
List all the dates of all the references.
Are there any references predating your claim to the name?

And above all else. Don’t sit there thinking that the end is nigh. It isn’t.

Research Research Research. Eventually you will find a way to thwart the Corporate Bully.

And when you win, publish your results so that others can learn how to fight corporate thuggery.

Trademarks, Intellectual Property and Copyright are not always intended to protect the small guys. In fact, I think I have successfully shown a couple of examples where they were used as tools to shaft the little guy.

P.S.: Lawyers of course will use precedent law and not necessarily historical records to fight copyright/trademark attacks on your livelihood.

Whilst in the above two examples, I didn’t actually use lawyers to fight the actions for me, I depended on them in the first instance to tell me my options for a specific scenario that I devised.

PPS: Australian legislators aware of this national icon being stolen from our shores are still promoting WIPO and ACTA as the cure-all to fix our financial woes.

Methinks the score in Canberra is:

Lobbyists = 99    Non Lobbyist Citizens of Australia = 1

References:


Ibid
on Wed 22 Jul 2009 04:47 PM EST
Lambada may have
disappeared altogether. [Editor: Cough BULLSHIT Cough] Seeing a lucrative business opportunity, these


Ibid
on Thu 23 Jul 2009 03:00 PM EST
Lambada! flow in – protected by a suite of
intellectual property laws, which in turn

Where to buy Ugg Boots (Forum)
http://forums.vogue.com.au/archive/index.php/t-189437.html

Hat-tip to Kim Holburn for drawing my attention to the Ugg Boots Tradmark dispute.

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