The 2012 Jumpstart Our Business Startups Act (JOBS Act) opened the door to widespread use of crowdfunding for financing new projects and ideas. As a result of the JOBS Act, the use of crowdfunding platforms has increased exponentially. If you are considering a crowdfunding platform for your new venture, or if you are contemplating investing in a crowd-funded project, attention to intellectual property protection is critical. Here are a few simple ideas to keep in mind:
Perhaps prompted by the release of Oreo’s most recent new flavors, Nabisco has sent a letter to J.P. Licks, one of Boston’s most beloved ice cream companies, asking its owner Vincent Petryk to stop using the word "Oreo" in its Oreo Cookie Dough ice cream and frozen yogurt, according to the Boston Globe. Nabisco’s only proposed alternative, said Petryk, was for J.P. Licks “to become a long-form license-agreement third-party manufacturer.”
If you are a trademark licensor, your agreements with licensees undoubtedly contain quality control provisions, including the right to review how your licensee uses your mark. Quality control protects consumers against misleading uses of trademarks and ensures that licensees offer products and services that live up to the quality associated with the brand. Additionally, a license without quality control is considered a “naked license,” which has been held to be inherently deceptive and can result in the trademark being deemed abandoned. But does exercising quality control expose a licensor to liability for infringement of third party trademarks by its licensee? In the case of Gibson Guitar Corp v. Viacom International Inc. and John Hornby Skewes & Co., Ltd., Gibson Guitars made that argument, but ultimately failed.
Trademarks are a unique form of property right. Trademark rights give the trademark owner exclusive rights to use, for example, a word, phrase, logo, design or packaging in connection with designated goods and services. Unlike other forms of intellectual property rights, such as copyright and patent, which grant exclusive rights for a fixed time period, trademark rights can vanish at any point if the trademark ceases to be used, or the trademark owner is not vigilant in protecting its rights against others who are either infringing the mark, diluting the trademark’s commercial value, or genericizing the mark to the point that the mark is used to describe a category of goods or services, not just a brand (for example, Aspirin).
The unique nature of trademark rights means that purchasing trademarks is not like purchasing a car. There are special considerations that a purchaser should be aware of.
Below are five easy tips for such purchasers.