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Guest Blog: Why You Need (or Should Update) Terms of Service & Privacy Policies

Guest author Alexandra Harmer of Ascenda Law Group discusses the importance of having terms of service and privacy policies for businesses operating in the digital world.  If you receive email, you have likely received many of the seemingly endless notices notifying you that [insert Vendor name here] has updated its website terms of service and privacy policy in the wake of the enactment of the General Data Protection Regulation (GDPR). You may even have had a good laugh at one of the many memes inspired by this phenomenon. But aside from perhaps having a good laugh and deleting more emails than normal, you might also be wondering if your website terms of service and/or privacy policy need an update, or if you need these documents at all. Facebook and Twitter have them, but does that mean every website needs them? Below are three reasons why you may need website terms of service and a privacy policy or should be updating the ones you currently have. Users Want Them At the heart of it, terms of service and privacy policies are contracts, which act as guides, explaining the relationship you have with another party. A contract tells each party what it can expect from the association, and, if well drafted, can even help resolve disputes without litigation. In the case of website terms of service and privacy policies, these documents tell the visitor what their rights are, and may include information about how to use the website, what the relevant policies are (like, return policies and, yes, privacy policies). Making your terms readily available means customers don’t have to spend time contacting...

How to Deal with a Cease & Desist Letter

Receiving a cease and desist letter can evoke a flurry of emotions. Fear of litigation, defensiveness of your brand, concern for the future of your business, etc. But, taking a step back, it is important to understand what a cease and desist letter is, how it is used as a strategic enforcement tool, and what you should do if you are the recipient. What is a Cease and Desist Letter?  A cease and desist (C&D) letter, or a “demand” letter, is correspondence, typically written by a lawyer on behalf of another business or person, who wants you to stop doing something that allegedly violates their rights. In the trademark context, the letter typically demands that you cease using a trademark that is identical or similar to a mark owned by the other party. When these letters are written by lawyers, they can often be several pages long and contain confusing legal references, making it seem that you are clearly in violation of the law and must accede to their demands . . . or else. Conversely, when the letter is written by a non-lawyer using a template letter from the Internet, the letter may not provide enough substance for you to adequately assess your legal position. Regardless of who sent the letter, it is important to remember that the statements are merely allegations. That said, a C&D letter should be treated with the utmost concern until you are able to determine whether the alleged claims have any merit. What to Do (and Not to Do) If you Receive a Cease and Desist Letter? DO’s (1) Take a deep breath...

Is an IP Holding Company Right for Your Business?

A “holding company” is a business organizational structure that is set up as a corporation or limited liability company for the sole purpose of owning and maintaining particular assets. It is common to set up holding companies to manage and license intellectual property (IP) assets, i.e., patents, trademarks, copyrights, and trade secrets. IP holding companies may be attractive due to tax advantages. Additionally, an IP holding company may function as a structural shield to protect valuable assets. Legally, a holding company is considered a wholly separate entity from its parent corporation (or other affiliated companies). In the event the parent company is sued, the IP assets owned by the holding company are protected from creditors and such creditor would only be able to recover from the assets wholly owned by the parent company. Consider the following hypothetical: Company ABC Inc. is a cannabis dispensary and owns valuable intellectual property rights in the trademark “ABC” including a federal registration for ancillary services, a California state registration for ancillary services, and common law (unregistered) rights for the ABC mark in connection with the dispensary and its own line of cannabis products. (The trademark registrations are for ancillary services because the federal and California state trademark offices will not issue registrations for marks in connection with goods/services that “touch the plant.”) ABC Inc. elects to form an IP holding company called ABC Holdings LLC to own and license its trademarks. ABC Inc. then assigns all its trademark rights, both statutory and common law, to ABC Holdings LLC. Subsequently, the IRS challenges ABC Inc. for failing to properly report income and the court...
On borrowing a “devilishly close” famous name

On borrowing a “devilishly close” famous name

Among the “best ofs” for 2013 was Forbes’ list of The World’s Most Valuable Brands. Technology companies dominate, with Apple®, Microsoft®, IBM®, Google®, Intel®, and Samsung® holding 6 of the top 10 positions on the list. The others were Coca-Cola®, McDonald’s®, General Electric® and Louis Vuitton®. These are some examples of famous marks for brands that represent many years of high-value products and intensive marketing, advertising and promotion to attain such prominence. Some marketers may be tempted to use a name devilishly close to a famous brand, such as “Mocha Cola” for a chocolaty drink or “Goggle” for a dual-window online search. But there’s a name for this kind of marketing cleverness—riding on a powerful brand—expecting that some of the luster of that famous brand could rub off. Smart marketing pros tend to stay away from doing this type of twist on the familiar, knowing that a product recall and re-launch tends to interfere with a brand’s ultimate success.Famous brands are not just heavily promoted. Famous brands aggressively enforce their trademarks. They go after the too-close-for-comfort knockoffs, because failure to do so damages their brand, both in the eyes of the marketplace and, ultimately, in the courts. Legally, proving a mark is “famous” requires much more than showing a brand is well known. But once fame is established, a famous markis entitled to a broader scope of protection. For example, the mark THE OTHER WHITE MEAT, used by the National Pork Board, was enforced against the mark THE OTHER RED MEAT for salmon products. One defense against infringing on a mark is parody—the idea that one might “borrow” a...
The Distinguished Mark: Stronger in Court

The Distinguished Mark: Stronger in Court

When choosing brand names, because all marks are not created equal, my advice is almost always to choose a strong mark. But there are pros and cons. Legally, a strong mark is more protectable. When considering whether there is an actionable infringement, we consider the marks’ similarity, whether the products are related, channels of trade, sophistication of the relevant consumer, whether there has been any actual consumer confusion, and, yes, the strength of the allegedly infringed mark. In trademark parlance, the strength of the mark is related to distinctiveness. A mark can be inherently distinctive or it may become distinctive through extensive and continuous use in the market. Inherently Distinctive: There are three types of inherently distinctive marks: 1. Fanciful marks are not actual words, but made-up terms, like ACCENTURE for consulting, EXXON for energy products, GOOGLE for Internet services, STARBUCKS for coffee, REDDIT for social news, PINTEREST for social networking, EXPENSIFY for online expense reports. 2. Arbitrary marks are real words, but words that have no literal or suggestive meaning connected to the product. Examples include LEAPFROG for educational games, APPLE for computer products, AXE for men’s toiletries, DROPBOX for document management software, JACK IN THE BOX for fast food, and DAWN for cleaning products. 3. Suggestive.marks evoke and indirectly, extrinsically relate to the product. Examples of suggestive marks are AMAZON for online retail services, CHICKEN OF THE SEA for tuna, DREAM HOTEL for hotels, PEDIGREE for pet food, PRUDENTIAL for insurance services, GREEN BRANCH for banking services, and COPPERTONE for sunblock. Acquired Distinctiveness: A merely descriptive mark communicates something immediate about a feature or attribute of a...