Trademark is my favorite component of intellectual property law. Both the conceptual framework and practical implementation have been successful. I am satisfied given the knowledge that when I walk into McDonald’s® I will get quality burgers at bargain price through the dollar-menu and when I go into Starbucks® I expect decent overpriced coffee supplemented by world-class service. Both companies have spent enormous amount of time and effort into developing the company image that they have today. Exclusive trademark protect both the businesses and the customers. Businesses can protect and enjoy the image that they have developed and customers can ensure that the products they are purchasing are ensured by a reliable trademark.

Apple is a perfect example of a company that has heavily invested in the image of its brand and all of its trademark products. For example, with the introduction of the Macintosh computer in 1984, the company spent about a million dollars to develop one of the most famous and influential Super Bowl advertisements in history to promote the Macintosh trademark:

It is clear that Apple’s marketing campaigns have created the company as it is today. The value of that bitten Macintosh apple logo is worth more than the market cap of many mid-size firms. I would argue that without such heavy investment into brand image, Apple cannot possibly sell its products at the prices they offer today.

Currently, Apple holds 185 trademarks covering anything from the Apple logo to iPod family, to Chicago font. The full list of trademarks can be found here: http://www.apple.com/legal/trademark/appletmlist.html

The most notable feature of the Apple product line are that Apple ‘i’ products. Adding the ‘i’ before product name is one of the most phenomenal marketing endeavors. Apple currently holds 23 trademarks that follow this feature. The ‘i’ product line serves two important roles. The ‘i’ automatically signifies that the product is guaranteed to be of good value under the Apple name. In addition, Apple tends to add a generic name after the ‘i’, such as iTunes, iPhone, and iPhoto. This method helps consumers to easily identify the product functionality. In comparison, the Zune and the Android do not have names that indicate the products’ function. (The Zune is Microsoft MP3 player and the Android is a Google phone platform).

Now, the problem arises when Apple wants to introduce a new product line under the ‘i’ series when the name has already been taken! In fact, that has happened to two of Apple’s most important products: the iPhone and the iPad.

Steve Jobs announced release of the iPhone in January of 2007, however, the iPhone trademark was already owned by Cisco. Cisco bought a company called Infogear Technology, which had developed a product that combined web access and telephone called the iPhone in 2000. Shortly after Apple’s iPhone was announced, Cisco filed a trademark infringement lawsuit against Apple. Cisco claimed that the trademark lawsuit was a “minor skirmish that was not about money, but about interoperability.” The two companies soon reached an agreement in February that allowed both companies to use the iPhone name in exchange for interoperability between their security, consumer, and business communication products.

A similar case of trademark overlap occurred to Apple’s recent announcement of the iPad. Despite the controversial name that resembles a product used by majority of the female population, the name was already registered by Fujitsu in 2003. Fujitsu’s iPad is a handheld scanner for retailers that has Wi-Fi, Bluetooth, and VoIP support. In this case, Fujitsu agreed to cede the trademark to Apple after an undisclosed agreement has been reached in March.

The cases of iPhone and iPad shade light upon an interesting topic of dispute in trademark law. Strict interpretation of trademark law would have prevented Apple from taking on the trademark names iPhone and iPad, which would have damaged the company’s branding effort for past decades. Some would argue that Cisco and Fujitsu were more or less lucky to have owned the trademarks and have benefited handsomely from it. On one hand, the names iPhone and iPad were not very valuable before Apple decided to use those names. Neither Cisco nor Fujitsu made visible attempts to glorify their trademark. Cisco’s lawsuit and bid for interoperability and Fujitsu’s disclosed settlement (which I assume meant some form of benefit offered to Fujitsu) were used as leverage to use an asset that they did not create. Yet, according to trademark law, as long as the products still exist and that the companies pay periodic fees, the trademarks should remain with the first registrar. And it sounds fair that trademarks should be given on a first-come-first-served basis instead of who-can-get-most-famous rubric.

My personal take on these two cases is that Cisco and Fujitsu have all the right to grab whatever Apple is willing to offer to sell their trademarks. They should be compensated for sharing or ceding the trademarks they legally own. And if Apple cannot offer what they expect, then they should have the right to retain their exclusive trademarks. Indeed, they are lucky that they are receiving benefits that they obtained through pure luck. But the rightful owner of a property should have the right to enjoy unexpected value increase. However, I can see convincing arguments from both sides. Legally, the opposing view has no potential to achieve substantial success. It would need to come down to a moral argument for the trademark holders.

Just to end on an interesting note, somewhat related to the topic of Apple trademarks: Perhaps Apple needs to be more aware of market potential of ‘i’ series.

The trademark is a powerful tool that although has drawn some ire, continues to be a legitimate way to hold the right to an image or theme through an extended period of time. Before we can even evaluate trademarks however, we must first realize what their original intention was for.

Trademarks have existed as a way to prevent confusion between brands. So that companies have control of what their own image is, trademarks work as a means of preventing others from infringing on their brand.  It makes logical sense that people will want to protect the products of their time and energy. The idea pretty much makes the same amount of sense as it did when the idea first came up… back in the 14th century.

Flash forward nearly 700 years. What do we make of trademarks today? Well, in the modern and digital age, now more than ever, trademarks play an important role in brand management. With the ever growing spread of information and pictures throughout the world, it becomes imperative that companies protect their own image when necessary. Now although not all of what these companies do may seem right, the protection of an image and its brand are a necessity for companies (existing and future ones) to have peace of mind in spreading the brand.

Those who disagree will point out the loss of one of Facebook’s most popular games of all time. The now defunct Scrabulous.

For many, Scrabulous was trademark rearing its ugly head. However, all will admit that scrabulous was a clear ripoff of Scrabble.

Was the style of the block the same? Yup. How about the board positioning? Definitely. The value of the letters? Of course. The color of the double up and triple value squares? All of the same.

Now, don’t get me wrong. When Scrabulous was around, it was an amazingly fun game to play while procrastinating homework. However, few if any will disagree that individuals, not of the Scrabble name (said: Hasbro) profited heavily from a product that was not theirs. With all of the blatant use of what Scrabble was, it was only a matter of time Scrabulous was shut down. Many argue that Scrabulous renewed interest in Scrabble, that it sold more product than had been sold in the many decades since it was first released. Just because a product increases the popularity, doesn’t mean that the unauthorized use of the brand is any better. Although Scrabulous looked, felt, and seemed the same as Scrabble, it wasn’t Scrabble. Hasbro had a problem with that and with good reason. Left to its own vices, Scrabulous could have changed Scrabble in ways Hasbro didn’t want to deal with. A brand is an image that gains value from what it represents. When the item for which it represents fragments, there arises problems.

Don’t believe me? Let’s check out the real world to see a similar phenomenon of trademark violations.

These are Nike Hyperdunks. A shoe head’s dream kicks (Translated: An enthusiastic shoe collector’s valuable pair of shoes). These retail for about $100 USD, but further on in its lifecycle, they will retail for a lot more than one Benjamin. As you can tell in the picture, they look awesome, fit very well, are extremely light for their design, and if Kobe Bryant is to be believed, allow you to jump over a speeding Aston Martin.

Oh, the best part of the shoes you just saw in that picture are that they are fake. 100% authentic made in china ripoffs. These are the real Hyperdunks:

Can you tell the difference? Not many, if any can. They look the same, feel the same, smell the same, and seem to function the same, but they’re not the same. The weighting is different, the support technology different, and apparently they “feel different” (my brother’s words, not mine). However, to the unsuspecting buyer who’ll probably buy this pair of shoes at a “great” deal for $40 dollars on eBay, they might as well be the same Nike hyperdunks they saw advertised. This shoe represents what Nike trademarked: it’s brand, it’s image, and its product. The nearly identical ripoff represents degradation to all three of those aspects. And so, the discounted shoes not only discount the quality of the merchandise, but then charge the discount to Nike’s reputation tab.

Now, I’m not saying that all copies are as blatantly terrible. Scrabulous functioned well and for all intents and purposes, was Scrabble. Hasbro, however, had every right to get rid of Scrabulous as it could have very well misrepresented its brand (as it did when it was buggy in the beginning). To draw from the loss of Scrabulous that trademarks are a cancer in this society is ridiculous. Trademarks are one of the few things that actually seem to work in the digital age. Why fix a relatively working thing when there are other terribly broken things to fix (*cough* copyright, DMCA, net neutrality, patents…)?

-Sebastian